Retirement is the tradeoff between labor and leisure. If you are not working, you are in leisure. The question of when to retire (or how to retire) is really about leisure time over work and how you want that to look.
During the early 20th century, age 65 was chosen because it represented the age at which men appeared to lose their productive capacities. When arguing for railroad pensions that started at age 65, it was noted in Supreme Court arguments that “physical ability, mental alertness, and cooperativeness tend to fail after a man is 65.” I know many, many men that would be insulted by these remarks if they happened today, my husband included!
Now that we have some foundation on how age 65 came into effect, let us look at the practical implications in the 21st century. Think of the retirement decision as a scale. On one side you have a year spent traveling, spending time with friends, catching up on home projects and playing golf. On the other side you have a year spent hanging out with colleagues, solving work problems, dealing with your boss and making an additional year’s worth of salary. Which would make you happier? Would you spend another year at the job earning an extra year of salary? Would you give up a year of leisure now to perhaps have more leisure later? When is it worth it to keep working?
The first question is, “Do you like your job?” If so, you are more likely to continue working. The second question is, “Do you have enough money to retire?” A big reason we consider retiring is because it sounds like fun. Retirement seems like a reward for a lifetime of hard work. Having enough wealth means that we have the luxury to decide when we have had enough work. But if the purpose of retirement is leisure, consider what kind of leisure you want and what you can afford. This is critical when choosing a retirement age.
Instead of an “all or nothing” scenario, could you build more leisure into your current employment? With advancements in technology, more and more people are able to combine additional leisure with their employment. Those who work from home may be able to connect to their employment while looking at the beach as easily as they do looking at the walls inside their office. An example of working away from the office is that Frank and I are fully connected and engaged with the office when we are in Florida in January. You may be able to negotiate additional time off or take a sabbatical to enjoy additional leisure while maintaining your employment, especially if you enjoy your job.
Begin by assessing your financial and physical health. What can you be doing today to make your future shine brighter? If you have not reviewed your financial plan lately, please call and make an appointment with your financial advisor. Your leisure is waiting.
(Some information taken from Think Advisor, March 2015, The Evolving Idea of Retirement by Michael Finke.)
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