Working Wealthy — Can You Define Retirement?
Planning for retirement is important as it helps us prepare well for the future, but what does retirement even mean? It has a myriad of different definitions for all walks of life. The Oxford English Dictionary defines it as “the action or fact of leaving one’s job and ceasing to work.”
However, to say that this definition oversimplifies the concept would be an understatement. Retirement means different things to each of us. Yes, in financial terms, it marks a major shift from accumulation to consumption, but what we believe is most critical (and also the most challenging) is defining precisely what retirement really means to you. Once you know what your retirement should look like, then you can start creating your path toward it.
Here are three common definitions of retirement that may help you figure out your own:
1. Financial autonomy. Some believe that income is the main reason to stay in a certain career or work in a certain way. Once that reason goes away—in other words, once you’ve saved enough—one might argue that your job becomes less vital. While this definition ignores the pleasure and meaning that you might derive from work, it certainly illustrates that your paycheck, bonus and stock options might no longer carry the same weight in your life that they used to.
2. Freedom. “I just want to do what I want to do when I want to do it.” Sound familiar? Many people maintain that their biggest joy in retirement is simply being on their own time. Perhaps it’s having flexibility that truly feels like retirement for you. You may still be working, but it’s in a consulting role or through boards and volunteering. Whatever the case, choosing to do what is most important to you—and not necessarily what you must do to pay the bills—is a nice place to be.
3. A new chapter. Few people start out in life knowing what they want to do for a career, become exactly that and then retire. The statistics on how many jobs people will hold today compared to three generations ago are like night and day. Maybe retirement for you means the ability to start a new career. Maybe it involves taking a risk on yourself by starting a small business or working in a totally different field. Follow your interests and your passion!
Whether you define retirement as financial autonomy, a time to enjoy your freedom or the opportunity to write a whole new chapter, it’s generally important to focus on your financial plan and understand how to make your retirement wishes happen for you. Your Corient Wealth Advisor is committed to building a financial and retirement plan that’s right for your particular circumstances, helping to give you the ability to live your life just as you choose.
ABOUT THE AUTHOR
Nick Cosky, CFP
Nick is a Partner, Wealth Advisor in our Itasca, IL, office. In his role, Nick is primarily responsible for introducing prospective clients to the firm. Nick served as the head of legacy firm BDF’s Financial Planning Committee and has participated on the Business Owner Team. He is passionate about the goals-based planning that BDF does for its clients and enjoys focusing on the behavioral aspects of decision-making. Nick is a CFP® professional.
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