R E T I R E M E N T ?
It’s a big question. You shouldn’t answer it alone.
There aren’t many questions in life bigger than RETIREMENT, with some notable exceptions:
MEET YOUR PARENTS? GET MARRIED? HAVE KIDS? BUY A MINIVAN?
Yep all BIG.
But RETIREMENT, even though its meaning has changed dramatically over the years, the definition continues to personalize with each individual, and it remains a powerful word.
It’s the light at the end of the tunnel. Its salvation. It can’t come soon enough. Gold watches, golf clubs and fishing poles. It elicits a range of emotions from elation to fear, excitement to disappointment, joy to sadness. Bittersweet captures it pretty well.
But is the whole notion of retirement, a modern concept still in its infancy, comparatively speaking, even as relevant as it once was?
Yes, from the perspective that we understand life is comprised of stages that have so far withstood the tests of modern time, thanks to FDR and the Social Security Administration. When you get to your mid-sixties, everyone around you asks, “Are you going to retire?” It’s a period of time in our lives that we expect, and apparently are expected, to do something different, like not work anymore.
The psychological underpinnings of all this are very strong. You’re already grappling with the leading issues: aging and health. Sure, they say age is merely a number and aging is simply a state of mind. Okay. Fine. But you have to come to grips with the fact that the physical body is probably well behind its peak in terms of capability and effectiveness. If you’re 65 years young, you probably have a handful of issues going on somewhere between your toes and hair follicles, and you greet your pharmacist by her first name.
And maybe your cerebral capacity has slid down the slide a bit, but if you are like most people, by this time in your life you’ve acquired a vast store of knowledge, assembled an army of incomparable experiences, developed a priceless set of skills, developed your own shortcuts and workarounds of every imaginable kind, and have wisdom that can only come with decades.
The question of Human Capital
Human capital (HC) is a combination of all these qualities–knowledge, experience, skill, wisdom, and so forth–and what you bring to the table just by being you. This HC package is your economic value.
So, too damn bad your human capital has shriveled to a pea!
Our human capital, our economic value, generally hits its zenith in our mid forties, plateaus well into our fifties, and declines significantly the closer we get to, you guessed it, our “normal retirement age.”
And the nearer you get to that age you become a target.
Your employer can’t wait to see you leave, so much so that they may attempt to seduce you into leaving, by dangling a sweet, crunchy carrot called a “package” in front of you. Generally speaking, the package is too irresistible to pass up.
Often, there is no art of persuasion involved on their part. They simply “restructure” you out.
At a point in time when many people are able to deliver their highest value to the workplace, they’re being enticed or forced to leave to make room for a couple youngins. Circle of life, Simba.
Human capital is ONLY relevant in the CORPORATE world,
where your “friends” in HR want nothing but the best for you!
Outside of corporate life, out in the real world, you can keep your HC as high as you wish, often pushing your actual value far beyond what you were worth to the man! Call it entrepreneurship. Call it volunteeerism. Call it a second career. Call it aardvark. Call it whatever the hell you want to call it, but THIS is YOUR time.
Tell corporate they can cram their restructuring
up their asphalt jungle!
From her 2003 book Retiring as a Career: Making the Most of Your Retirement, author and career consultant Betsy Kyte Newman writes, “Clearly, there is no one-size-fits all model of retirement…for some, retirement presents a prospect of unstructured time, free from agendas and schedules…for others, retirement means changing one set of expectations and obligations for another…for many, their true retirement begins after that first, often traumatic year, when it takes on its own unique blend of work (paid and unpaid) and creative leisure.”
Nice, sign me up!
Kyte Newman’s book is a must read for those who want to look at retirement from beyond the balance sheet. Retirement is more than just dollars and cents planning; it must be considered from a number of angles before racing headlong into it. Chief among these considerations is how we invest and consume our most precious asset: time.
If, as they say, everyday is Saturday in retirement, we know that some people will be delighted by this, but others will be in a constant state of bored agitation, with a meandering agenda of unlimited leisure being the best that things get. Type A’s may want every day to be Monday, and that’s life on the other end of the spectrum, but if that is your definition of a fulfilling retirement, go for it.
It’s not retirement; it’s YOUR retirement.
YOU call the shots.
From where I sit, most people will be fulfilled and happy with some balance of Saturdays and Mondays. 3:4, 4:3, other? Your call! It’s YOUR retirement.
So if you commit to viewing retirement as simply the next stage on a continuum, one which you (and your spouse, if you are married) define and control, as opposed to some forced societal passage, then your planning and expectations will take on an entirely new meaning, filled with anticipation, not uncertainty.
So that big question is in front of you: RETIREMENT?
Is it ten years in front of you? Or is it ten minutes in front of you, because your “friends” in HR, who want nothing but the best for you, just ambushed you with a restructuring package?
Each scenario will require a different method of prep on your part, so what do you do?
Ten years gives you time to plan almost every aspect of your retirement, whereas ten minutes, especially if you’ve not yet planned, will cause you to punch your panic button. Don’t. In your calm state, you need to think negatively and look backwards.
What! Are you crazy? Aren’t I supposed to be positive and look ahead?
Not if you want the best outcome.
The ancient Stoics, who apparently didn’t speak English, called it premeditatio malorum, a premeditation of evils. Its an exercise in imagining that things could go terribly wrong, which then becomes a useful exercise in planning for the inevitable setbacks that life dumps on us from time to time.
Think about it. Our plans often don’t turn out in the rosy way we first pictured them. There is often a great gap between reality and the dream.
By anticipating and planning for bad things to happen, we can often avoid them, or at least minimize their effect. Using this pre-mortem way of thinking, we can plan for the best by actually anticipating the worst, a dress rehearsal to help prevent being caught by surprise.
Its when you can’t imagine the worst thing happening that it comes knocking at your door, and retirement is no time to be caught with your pants down, so to speak.
Pre-mortem thinking is antithetical to most people. We’re told to have a positive mental attitude, hope for the best, be positive, blah blah.
Thats where professionals come in. The best financial planners are Stoics and would make Epictetus proud.Ten years, ten minutes. Doesn’t matter. The big question, RETIREMENT, must be answered. You need to speak to a professional whose life’s work is built around anticipating bad things happening, and creating plans to minimize their impact.
Contact a Certified Financial Planner. And if you have the choice, please don’t wait until you only have ten minutes!