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What Do We Mean by “Retirement”?

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The idea of retirement is an invention of the last 75 years. Before then, people had no expectation of “retirement” in the modern sense.

It’s worth analyzing this concept a little closer, before we arrive there, to make sure it’s a place we want to go. What is the purpose and meaning of “retirement” to you? For me it isn’t necessarily about playing golf or lying on the beach all day. Rather, retirement is an opportunity to be creative and productive on your own terms, to live life at your own speed. Specifically it means you have enough financial independence that you don’t need to be tied to a full-time job.

Virtually every piece of the mainstream financial infrastructure — media, brokers, advisors, retirement plans, tax laws and regulations — is oriented towards seeing you work and work, until a conventional retirement age in your 60’s. If you love your job and it makes the world a better place, why not? But if your job isn’t meaningful to you, or if it’s only a means to consumption of more stuff, then maybe early “semi-retirement” is an answer.

The true objective of “retirement,” for me, is an ideal work-life balance. I talk and write about “early retirement” because it’s a popular and easily grasped term. But, when you look at the numbers, and the futility of predicting future economic cycles, I think it’s very difficult, and not all that beneficial, to design a life with no work at all. For me it’s more about financial independence and choosing my own work.

Retirement of any flavor, especially complete financial independence, is a long-term process. Some short-cuts are available, but there is no magic. Enjoy every day of the journey. Don’t arrive at retirement realizing you’ve sacrificed living to get there.