Want Financial Security? Stop Planning for Retirement
I had heard from people older and (presumably) wiser than me that life is short. For several years after college, as I worked a variety of jobs trying to find one I liked, I often wondered,
If life is short, why are the days so long?
They seemed to tick by in slow, painful minutes, especially during my time at work.
Then I discovered financial planning as a career. It offered the perfect opportunity to use my analytical skills while also working with people. The idea of helping others set goals and manage their money to achieve them was something I could feel good about doing. It also offered me considerable earning potential, which meant I could achieve my financial goals in the process.
After a while, however, I noticed a major disconnect between what some clients said they wanted and their actions. For example, people would say they wanted to reduce their debt, but then they would get a raise, buy a bigger house, and take on more debt. I regularly reminded myself that my job was not to judge what people want to do with their money. My job was to help people develop and follow a plan to accomplish what they said they wanted.
But I was beginning to feel like people were lying about what they wanted.
Of course, not everyone lied. Many clients said they wanted to accomplish “X” and would take action to achieve “X.” Of the people who did that, however, I noticed about half of them didn’t really seem happy after doing so. This also confused me. They were their goals, and yet they weren’t happy to achieve them?
I’ll admit this made financial planning less fun for me. Although my stated mission was to develop financial plans to help people achieve their goals, my “secret mission” was to help people live better, happier lives. I mean, isn’t that the point of money and financial goals?
As my practice grew and I achieved financial success that allowed me to achieve many of my goals, I noticed a similar disconnect in my own life. For example, I said I wanted to be debt-free, but I spent a lot of money playing golf and eating and drinking at my country club, instead of paying more toward the mortgage on my house. I also noticed that even as I achieved various financial goals I had set for myself and my business, I wasn’t measurably happier as a result.
In the disconnect, I felt like a fraud.
Then something amazing happened.
I had two back surgeries in two weeks that left me bedridden and unable to dress myself without help. Of course, this didn’t feel amazing at the time; it felt awful. As I weaned myself from the pain meds, I started reflecting on what I was doing with my life.
I wasn’t sure I would physically recover well enough to resume pre-surgery activities, and to be honest, I wasn’t sure I wanted to. So many of the activities that consumed my waking hours seemed pointless. Even my work, which had been a source of joy in the early years, seemed futile. Too many of the financial plans I’d helped people develop (including my own) weren’t providing the motivation or fulfillment I hoped they would.
To pass the time in bed, I started devouring different books. One that really spoke to me was The Code of the Extraordinary Mind. In it, author Vishen Lakhiani talks about cultural and societal expectations and how they lead to brules (his term for bulls**t rules). I started realizing how much of the financial planning work I did with clients was based on brules.
For example, every financial plan regardless of the software I used, includes retirement as a default – and primary – goal. What’s funny is that retirement is a made-up concept. It was popularized in the United States when President Franklin D. Roosevelt proposed the Social Security Act of 1935. Prior to that, people literally worked until they died – or as long as they were physically able.
If that sounds depressing, don’t despair.
Before the invention of retirement, people didn’t actually want to stop working.
Why? Because the concept of retirement is based on the notion that as people age, they become less productive. In a speech given by one of the co-founders of Johns Hopkins University, Dr. William Osler stated that man’s most productive working years are between the ages of 20 and 40. His productivity begins to decline after age 40, and by age 60, he is essentially useless.
In line with this thinking, companies began introducing pension plans designed to lure older workers out of the workforce to make way for younger, more productive workers. The Social Security Act required workers to contribute a portion of their wages to help pay for their retirement and settled on the age of 65 to force people out. Take a look at your paystub, and you’ll see a deduction for OASDI, which stands for the Old Age, Survivors, and Disability Insurance tax.
At the time, most working people didn’t embrace the idea of retirement. Not because they were spiteful and wanted to prevent younger people from having jobs, but because people are happier when they’re productive and useful.
It took the development of active leisure communities in warm climates like Florida and California and massive marketing campaigns extolling the virtues of leisure to make the idea of retirement tolerable. And with the passage of time, and a few thousand gold watches, the image of retirement was transformed from an indictment of a person’s uselessness to the crowning achievement in his career.
It should be no surprise that when I asked clients at what age they’d like to retire, the most common answers were age 62 (the age at which a person is first eligible for a reduced Social Security benefit), age 65 (the age at which Medicare, the federally-funded health insurance and sister to Social Security becomes available), or whatever age between 65 and 67 was considered their Full Retirement Age, according to Social Security.
I often wondered about this, especially for people who had more than enough investment assets to retire at a younger age, or for those who clearly loved their work and reluctantly gave it up when they reached their pre-determined Retirement Age. I hadn’t realized how powerful the conditioning of retirement as the Ultimate Goal was in people’s minds.
I did realize, however, that with the promise of retirement in people’s sites, they were willing to endure about any job, no matter how much they hated it. Client after client confessed to me that they would rather be doing something else for work, but it was “too late” to make a change. So instead, they resigned themselves to work a job they disliked because they only had 8 or 10 or 12 years until retirement anyway. Twelve years!! That’s a lot of minutes ticking slowly by until you can finally become useless.
But that’s ok. I had a solution for it.
To help you survive the next however many years until you can retire from the job you hate, we can add additional goals to your financial plan!
Because you spend most of your waking hours at a job you merely tolerate, why don’t you plan a vacation to help you can escape your boredom? If you really dislike your job, you should probably take two. You deserve them!
We can also increase your current expense budget so you have extra money to eat out, because you’ll be too tired after your stressful day at work to want to cook. You’ll definitely need more money for alcohol, because your boss and your customers demand so much from you, you deserve a drink (or three) for putting up with them!!
Forget cleaning your house or mowing your lawn, even though you find those activities rewarding and they‘re the only form of exercise you’re likely to get. We can add a line item to cover those expenses. And since you spend so much time on the road working your stinking job, you owe it to yourself to drive a nice car while you’re doing it.
On and on it went.
I thought about all the financial plans I’d written with the looming goal of retirement as their centerpiece. No wonder so many people weren’t motivated by their financial plans or any happier when they achieved the goals in them. It’s also no surprise when I asked people about their biggest challenge with money, 85% of them told me it’s trying to balance saving enough for retirement while enjoying life today.
So what’s the solution?
At the risk of having my Certified Financial Planner designation revoked, I suggest that you stop planning for retirement.
Instead, plan to live a life you enjoy now and for however long you get to live it. Find work that you enjoy and work as long as you want to. (It’s worth noting here that Dr. Osler – remember him? – went on to found numerous organizations and institutions and was a prolific author and speaker until he died at age 74. He definitely was not useless.)
Examine how you spend your money, time, and energy. How much are you spending enduring or escaping your current life?
But don’t ask me to write a financial plan for you. I don’t do that anymore. I decided at age 49 to shift gears and get certified as a life coach, so I could help people set and achieve goals without brules.
And even though I’m too “young” and I don’t play golf anymore, I moved to Florida. I realized how much I love warmth, sunshine, and the beach – all of which are free there!
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