When you think about financial independence (FI), what comes to mind? What do you imagine your life would look like if working for money was purely optional?
This is a question that many of my clients have pondered deeply and thoughtfully and continue to evaluate and review. Not needing to work for money and wondering what to do with your life once you’re FI is, as they say, a ‘gold plated’ problem we should all be fortunate enough to have.
But with so many possibilities, so many shades of financial independence to explore and discover, such a new dynamic and reality to accept and embrace - the choice of how you design your life plan truly matters. And it matters just as much whether you reach FI in your 40’s, 50’s, 60’s or 70’s.
Whether you earned, saved, lived within or below your means and invested well on the road to financial independence OR you received a windfall from real estate appreciation like many of my Bay Area clients are experiencing, especially those living in Berkeley or Silicon Valley OR you inherited your FI, the road ahead remains full of exciting possibilities. So which path do you choose? What now becomes your life purpose, your dharma?
Inspired Retirement Planning - Reimagined!
Throughout history, the word retirement has been synonymous with “not working”. Whether it’s the traditional view of retirement - a life of leisure, filled with golf and vacation and walks on the beach or the more actual historic context - as a mechanism to “force” people out of work they were no longer capable of doing (typically manual labor), retirement has always been about the end of work.
A growing base of research is finding that stopping work completely and trying to live a life of leisure does not actually create the happiness that we might have expected. To some extent, this appears to be one of the downsides of our adaptability as human beings; leisure as an occasional break from work is appealing, but a full time life of leisure can become boring once the novelty wears off.
For others, the problem is not simply that the leisure life feels less rewarding over time, but because being productively engaged in work actually brings about the meaning and purpose in life that fuels our positive well-being (not to mention that for many, our work environment is also a source of interaction with others that fuels our social well-being, too).
For many retirees, this phenomenon is leading to the rise of part-time work in retirement – a confusing and implicitly self-contradictory concept for many– and for others it’s driving them to adopt an entirely new “encore career”. The primary distinction for most of these “post-retirement jobs”, though, is that the purpose of the work is not for money and income; the purpose of the work is for purpose in life, whether that’s about engaging in meaningful work, leaving a legacy, impacting the world, or simply maintaining social ties.
Yet the challenge is that for so many retirees, what started out as a phenomenon to get older workers out of the way and into what would be a relative short “retirement” transition has now become an entire phase of life unto itself. And because “retirement” (and its non-work connotations) has been put forth as the ultimate goal at the end of a working career, retirees often transition into a full non-working retirement and then find themselves unhappy and unfilled after a few months or years. Which means that perhaps it’s time to rename retirement?
What’s the alternative in this case? Consider re-characterizing “retirement” as “financial independence” instead. The point of FI is simply to recognize that, once sufficient assets are accumulated, the decision about whether, where, and how much to work, can be made independent of the financial aspects of the work itself.
In other words, being FI is about being independent from the need to work, which then opens the door to more productive conversations about whether we want to work, and what meaningful work might be. For many of my clients the conversation of “what would you do, work or otherwise, if money was no object?” can be a remarkably freeing conversation, and lead to entirely new and productive avenues to explore.
So maybe it’s time to rename the concept and goal of retirement altogether, and to recognize that “financial independence” from the need to work for money is the real goal of saving and investing. So instead of labeling it “retirement planning”, how about we rename it “financial independence planning”.
Here’s the bottom line. For the majority of us baby boomers, this is not going to be your father’s or mother’s retirement scenario. We’re disrupting the entire concept of ‘retirement’, finding new ways to repurpose our lives and inspiring others to reimagine what their lives could look like when achieving financial independence. If not now, when?