Think about that question for a minute. It's kind of eerie to think about. So many people talk about getting to retirement as if it's an end goal. But is it?
The current phase for many of us is our career phase. Our income producing phase of life. Our opportunity to save money and build wealth.
Some people squander that opportunity and wait to really start saving until they are in there 40s and 50s. They see retirement on the horizon, and that motivates them to "kick it in gear" and finally be proactive. I have clients who have waited to start planning and actually saving until that time. It's still possible to be successful, however there's not much room for error.
When people start planning early in the career phase of life, they can take some calculated risks. Some will pay off and others won't, but time is to your advantage and you can make up from many of the set backs. I have friends and clients who have left great jobs to go work at a start up company. They've taken less in salary so that they can (hopefully) grow with the company and receive options or stock. If you're 50 years old with a mortgage, family, and feeling behind financially, there's very few people who would feel like they could take that "risk" of joining a young company. If you're 30 years old and recently married, you may decide to take that risk of jumping to a start up, tighten up on the extra expenses a bit, and now you may be getting some equity in a (hopefully) growing company. If that company fails and you're 30, it's not the end of the world. But if that company fails and you're 50, those stock options may have been a big part of your retirement plan and you may have lost just about everything.
During this career phase, many of the common financial set backs people have can be hidden because of income. If you don't save what you should this month? There's always next months pay check. If you get into credit card debt? There's always next months pay check. If you buy a stock because you heard about it on Reddit and it drops by 50%? There's always next months pay check.
Point being - because you have the promise of another pay check, you can make small mistakes and recover relatively unscathed. And because we feel like we have the promise of income today, people tend to take more, unnecessary risks than they should. If our career phase is riddled with risk for the sake of taking risk, or under-saving because we want to give the perception of a certain lifestyle, then all of a sudden as we inch closer to the retirement phase we start to feel like we're falling behind.
In retirement, your savings is called upon. Everything you've built over your career phase is called to the front lines to provide cover for the lifestyle you now want in retirement. There are no more missteps you can afford to take and potentially very little, if any, savings you get to add. You don't want to look back on your career phase with major financial regret.
My grandfather is in his 70s and he still works almost every day. Does he have to? No. But he does it to stay busy, stay sharp, and because he enjoys it (most days). He runs multiple small businesses with my dad, who would probably tell you he wish my grandfather would retire already, but that's how it goes with family businesses.
So what is your objective for this phase of life called retirement?
Are you down in Florida living out your days on the beach or in The Villages riding your golf cart to bingo night?
Are you traveling the world, taking cruises, and enjoying the beauty that is all around us?
Maybe you're like my great-aunt and uncle who spend part of the year back home in the Northeast, part in Arizona, and part at the beach?
But there are a few items that are known:
1) You need purpose. What keeps you getting up in the morning and excited for the day?
2) You need income. Whether this is income from the government, a retirement account, real estate investment properties, business interests, or from work you do, you'll need income to fund your lifestyle in retirement.
It's up to you to find your purpose. No one else can define that for you. It comes from within.
As for income, there are a number of different strategies, but we need to get things going today. Use time to your advantage and start taking smart, well-calculated risks that may result in big rewards down the road. I'd be happy to share some ideas around I can help and what options are out there for you.
Like other phases in life, this should be rewarding and exciting. It should be something that we strive for and keep us going. Maybe we're not going 100 MPH in the fast lane like so many of us during our career phase, but we still need to be on the road heading somewhere, it just may be at the speed limit for once in our life.
Retirement isn't the end; it's just the next beginning. It's something we should all strive for, but it's up to you to determine what you want it to look like and how you want to live it.