What Kind of Retirement Is Right For You?

I had a great lunch today with an old friend of mine. We used to work together and he was a couple of decades older than I was, so today he’s actually starting to see retirement on the short term horizon.

He was interested in what my life was like as a self-employed person who made a living on a mix of side gigs and contracts, and I shared some of my thoughts on that, but when we got down to the real meat of the conversation, it seemed like he was mostly trying to figure out what the next stage of his life is going to look like.

He’s between five and ten years away from a traditional retirement. He seems to love his job. His primary interest away from work is to go to live sporting events, particularly high school and college sporting events near him (there aren’t exactly a ton of professional sports options in Iowa).

I asked him what his typical day was like and most days seemed to either be a cycle of going to work and coming home to do household chores, going to work and then going to sporting events, or else filling weekend days with household chores and sporting events.

“But… what else do you do?” I asked him. I wasn’t intending to be rude. Rather, I was being frank with an old friend. I was trying to help him figure out what he might do with a lot of additional hours that he’ll have in retirement.

The thing is, he drew a blank on that question. He talked about reading websites and maybe reading a book every once in a while and watching television… and that was about it.

My response? I told him that if he’s actually happy with his life routine right now, with a mix of work responsibilities and workplace respect that he’s earned over the years and those workplace relationships, and his main hobby of watching live sports fits right alongside that, there’s no reason whatsoever for him to retire until he has to.

The funny thing? He thought about it for about a minute or so and then slowly brightened up.

For him, retirement did not seem like a blessing at all. It seemed like this empty hole of time and space where he’d basically sit around for the last two or three decades of his life doing nothing interesting and then eventually dying. He saw his workplace relationships, which he values a lot, withering away and dying. He saw himself walking away from a place where he was valued and had a lot of respect into a life where that respect didn’t exist.

I couldn’t help but be reminded of the movie About Schmidt starring Jack Nicholson, a recent retiree who is struggling with retirement. He spends the first portion of the movie walking through the paces of his life but feeling very empty; the film captures that sense really well.

It was really obvious that much of what Warren Schmidt cared about was the respect and value he had in the workplace, the relationships he had there, and the work he did. It was a very key part of who he was and what he enjoyed about life. Sure, like anyone else, he didn’t love every aspect of his job, but it gave him a lot more than he realized.

That’s not a bad thing at all. Every single person needs to find the place and the things that makes them feel whole, that makes them feel valued, that makes them feel engaged. Many people find that in the workplace.

On the other hand, there’s me. I have more things I’d like to do in my life than I’ll ever have time to do in my entire lifetime. Writing books. Reading books. Hiking trips. Charitable work. Tabletop game design. Gardening. Fishing. Political involvement. Travel. Trying new things. So many, many things.

For me, as much as I enjoy my work, I also very much look forward to a point in my life where I can wake up and know that my day will consist of all of those things and that I’ll have adequate time to actually do those things with any degree of regularity.

My friend and I derive our personal joy and happiness from different places. Much of his joy comes from his job and his one main hobby/interest. If you take away one of those things, then there’s a void in his life that is left unfilled. Yes, he could seek out ways to fill it, but why should he if he already has a life that he finds fulfilling? He has relationships that he values, people that value him, and things to do that bring joy and fulfillment to him, and what else does one want in life?

My joy comes from having a huge variety of interests and passions, far more than I currently have time for. I am happy with what I do now with my time, but if an element goes away, I will quickly fill that void with other things.

To put it simply, there is much stronger motivation for me to save for retirement and retire early if possible than there is for my friend to do the same. There is no strong reason for my friend to retire early or even to retire “on time.” It makes more sense for him to work as long as possible and retain all of the aspects of his life that he values.

The goal of retirement savings and retirement planning isn’t necessarily to retire. It’s to have lots of options available to you when you reach retirement age. Sticking with your current career should be just one option among many. When it’s the best option, as it seems to be with my friend, then your retirement savings is simply a backup plan. When it’s only one option among many and some of the others sound mighty nice, as it is with me, then your retirement savings is very, very important.

Where are you on that scale?

Are you the type of person who has built up a great career with a ton of great relationships? Have you found a place in your career where you have respect, personal fulfillment, and lots of good people around you? Do you wonder what you’d actually do to fill your days after your career is over? If that’s you, it’s still worth saving for retirement, but you may want to expect to work a little longer than the typical retirement age and you should view it as more of a backup plan. You won’t be saving for quite as many years in retirement and you have more years to save for it. Retirement savings isn’t as aggressively important for you.

Or maybe you’re the type of person who’s bursting at the seams to try new things and new ideas in retirement. You have a long, long list of things you want to achieve once you reach a point where you no longer have to work for income. Your days in retirement seem absolutely exciting because of all of the things you’re going to do. You don’t necessarily hate your job, but you definitely work to live, not live to work. You, my friend, are the kind of person who should be saving as aggressively as possible for retirement so that you can retire as early as humanly possible with the resources you need to enjoy retirement to the fullest. Retiring early doesn’t mean four decades of drudgery, it means four decades of wide open possibility.

Those two different attitudes point directly toward different approaches for retirement. One involves aggressive saving, maxing out 401(k) and IRA contributions, and searching for loopholes and angles to squeeze every last drop out of retirement savings. The other is more focused on using retirement as a fallback and is more focused on a debt-free lifestyle in order to improve one’s financial flexibility while still working.

Neither one is absolutely right, and neither one is absolutely wrong. Instead, they’re both examples of how different approaches to life can push people toward different approaches to their finances and retirement planning.

That’s why it’s called “personal” finance. Different people have different desires, goals, ambitions, and attitudes, and it would not make sense for everyone to follow the same cookie cutter path.

The best approach to personal finance for everyone is to start by figuring out what you want out of life and make choices to maximize those things that you want. For some, it might point you toward rapid retirement savings. For others, it might orient around saving for a house. For still others, complete debt freedom might be the best route. There is no answer that’s always right. The only principle I can point to that’s consistently strong for almost everyone is to spend less than you earn because the future is always uncertain, and do something worthwhile with the difference between what you bring in and what you spend. Pay off debts, save for goals, whatever it might be.

Good luck.

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