Rewriting the Definition of Retirement

by Nora Dunn on 21 September 2008 9 comments
Photo: Nora Dunn

Retirement [ri-tahyuhr-muhnt]: The act of retiring or the state of being retired; removal or withdrawal from service, office, or business.

 

You go to school.

You get a good job/career.

You work for forty years or so.

In the meantime, you find a soul mate, marry, buy a house, have kids, and live happily ever after. The kids grow up and move out.

Then you retire.

 

Your life map is so clearly laid out in front of you; yet the last piece of the puzzle – retirement – is a fuzzy and often incomprehensible anomaly.

 

With people living longer and striving for earlier retirements, the very definition of retirement is evolving. No longer is it merely a way to stop working and basically wait for death to come; that would take too bloody long and be a bore. Now retirement takes many different shapes and forms:

  • Starting a new business
  • Part-time consulting or contract work for your previous employer
  • Travel
  • Volunteering for, or even starting up charities
  • Moving to a new part of the world to join the ranks of worldwide ex-pats
  • Investing in Property
  • Running a Bed & Breakfast
  • Buying a farm
  • …whatever you can imagine

 

Retirement is no longer conventionally retiring…instead, it is REENGAGING.

 

Reengagement or not, retirement is still looked upon as the prize at the end of the road. You trudge through life, often suffering through hardships or careers you are miserable in, with the golden light at the end of the tunnel; the carrot dangling in front of you – retirement – to keep you going and getting out of bed every morning.

But with retirement increasingly taking the form of the activities listed above, there is but one question I must ask:

 

Why Not Now?

Why not buy that Bed & Breakfast now? Or that farm you always dreamed of owning? I know a couple who in their forties bought a raw piece of land, and turned it into a beautiful estate where they fulfilled their dream of owning horses, llamas, donkeys, and angora goats. They were not rich when they did this. They bought inexpensively, and built frugally. They pay for their dream by renting out two cottages on the property. They even have a third cottage for live-in help, who lives rent-free in exchange for managing the cottages part time. This allows them to instead focus their time and effort on enjoying their paradise.

 

Why not invest in property now? Instead of buying a house for you to live in and being cash poor for the next 20 years, why not rent an inexpensive place (if it is possible in your area) and use the extra cash to buy an investment property? Or two? You could quickly find yourself able to quit your job with the passive income from property, as a friend of mine did at the age of 36.

 

Why not open that business you yen for? Or make the switch to freelance work in the same field you currently work in? Maybe simply redefining your work day and who your boss is could give you that jolt of energy and happiness you are searching for.

 

Why not travel now? Personally, I managed to find a way to travel in a financially sustainable manner, for as long as I choose. So far I have traveled and lived across Canada, the US (including Hawaii), and Australia, with a small stint in Asia. And I’m still going strong.

 

 

I can’t afford that

I know, I know. Investing in property takes cash. You can’t buy that farm with peanuts. And you sure as heck can’t get on a plane with nothing but a wish and a prayer.

A steady stream of income and some cash in hand is required to qualify for the mortgage, get the business off the ground, or buy the plane ticket. And a cumbersome debt load may currently be in the way of it all.

It is true that the Pollyanna approach of “why not now” could be unrealistic and offensive. I get it. So maybe you need to put a plan in motion to get to the point where you CAN realize your dreams – before you turn 55 or 65. For example, maybe you can:

  • Outline an aggressive debt-elimination strategy to get on your feet
  • Stop spending money on the little things that make little difference to your overall happiness
  • Redefine what “home” means to you (by renting a much smaller pad and making due, or not furnishing the way your peers do, or not buying the toys you want and “need”)
  • Sell off the things that may help you get closer to your retirement dream and learn to live with less
  • Stop cooking with meat every day, and start using dried beans more often

 

The above strategies are all things I personally did to make my dream of travel a reality. I sold everything, and own almost nothing.

I have lived in a number of places from cold camper vans to off-grid yurts to shared rooms to full-blown five star cottages. Some places were a stretch to feel like any sort of home. (I compensated by living in beautiful locales where the idea was to enjoy the outdoors, not indoors).

I am a solid omnivore, cooking with meat no more than twice a week (despite the fact that I love meat), and instead preparing healthy and delicious meals for a fraction of the price.

My boyfriend in turn set out an incredibly aggressive one year plan to get out from under his massive debt-load and save the necessary funds to travel with me, by also making a number of hard sacrifices.

 

Ultimately, it all depends on how badly you want the “retirement dream” you have created. Nothing is impossible, if you approach it creatively enough.

 

 

Having kids gets in the way

A common argument for not “reengaging” (or retiring) now is the kids. Common themes are the desire to provide stability, or needing to work long hours for the necessary money to provide for their needs. And although these are valid things to consider, these obstacles too can be overcome.

I have a friend who has twin baby girls, and who is also actively gearing her business to become a passive stream of income not requiring her physical presence, so she can satisfy her life-long dream of living abroad. The girls will (of course) come with her, and she believes that their experiences abroad will be far more educational and character-shaping than preschool and primary school ever could be.

Another couple I know took their two kids out of school for a year and home-schooled them, while they sailed around the Caribbean on a boat. They worked remotely using satellite internet connections to keep money coming in, and they ended up spending less money during their life abroad (including the cost of the boat) than they ever would have spent at home.

 

The Big Question is:

If retirement is really a reengagement, then what is your definition? What is your retirement dream? And what can you do now to get there sooner?

 

Let’s re-write the dictionary together.

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Guest's picture

Great article!

I see retirement as a whole new beginning, not an ending or a winding down of things. I like your way of thinking though. If I had the funds to do the things I want to do at retirement, I would definitely do them.

I am currently trying to figure out a way to fund my first piece of real estate, and get renters to start making some passive income.

- Jack Rugile
Simple Sapien

Guest's picture
Laura

Great post Nora, I love that, reengaging.
We are 15 months into our 5 year plan, paying off our mortgage, debts and looking to reengage!

Guest's picture

Fantastic concept! And, up to now I just thought I was in my second career -- blogging -- but I think you're right b/c this is exactly what I would do if I was retired! Like you, Nora, I drastically reduced my spending and sold a lot of stuff (and, like your boyfriend, I aggressively paid off huge debts in a short time with that money), so I am thrilled to, at age 42, be living the life that I used to only dream of living when I'm 65! : )

Guest's picture

Oh, I forgot to mention how I paid down all that huge debt. I wrote a post about it called "How I Paid Off $50,000 of Debt in One Year" at http://shanelyang.com/2008/04/23/how-i-paid-off-50000-of-debt-in-one-year/ Thanks for the excellent post! Very well written and to the point!

Guest's picture
Guest

This post reminds me of a co-worker, who is probably traveling in some far-off country right now. He once told me that in order to save for traveling the world, He and his girlfriend never went to a movie or went out to eat in 5 years.

Guest's picture
williams

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Guest's picture

Nora,

Thanks for the wonderful advice. I'm familiar already with David Bach's approach to retirement and cutting all the junk out of our lives. But it's still one of those things that proves "easier said than done".

When I think about living with less and in a small space I get excited. I think there is something embedded in me that loves change, drastic change. So this article is a great eye-opener about others who have made those changes and followed through.

Thanks.

Guest's picture
Guest

Nora:
With the exception of volunteering and traveling, the other items on your list are career changes, not a new definition for retirement.

As someone who left a corporate career in banking, started a B&B in Costa Rica, and returned to the U.S. to start a retirement planning company, I have a unique insight into the issue.

Starting a business after retirement, is a great way to kill your retirement, lose your life savings, and be forced to back to full-time work. 95% of business fail within 5 years. I owned a B&B for four years, hardest job I ever had, not as romantic as it's pictured.

Farms and investment properties, if you don't know what you are doing, don't get involved. In general, do not place your retirement savings into any investment, that if it fails will force you to return to work.

However, I have to congratulate you on living a frugal lifestyle, to enable your early retirement, that is the secret to Green Retirement. You can learn more about it by clicking the link.

Guest's picture
Guest

for a few insightful stories, visit
www.financialtales.com