Contrary to popular belief, retirement is more of a dollar amount than it is an age-based milestone.
What I mean by this is that as a society, we have a partially inaccurate view of what retirement truly looks like.
Do you know why we traditionally view retirement as age 65?
Because in 1935, the Social Security program was created and it outlined specific rules & requirements for aging workers, with one of them being that workers would receive their full Social Security payouts after reaching age 65.
And they’re pushing the number farther back over time as life expectancies increase. The current retirement age is now 67(!) for those born after 1960.
So to begin reframing what retirement looks like, let’s first define the term:
To “retire” is to stop doing something, or to withdraw yourself from something.
You can “retire” a bad habit.
You can “retire” from your 9-5 that you hate, and still work as a freelancer afterward.
You can “retire” from a constant content cadence and fall back into a more structured, episodic series.
Traditionally, retirement is viewed as the act of withdrawing yourself from the workforce.
However, I believe that retirement can be viewed as a period of time in your life where your use of capital - time, money, energy, and attention - is best aligned with your desires.
(h/t to Carl Richards for the beautiful definition of “capital”)
Too often we fall victim to the mindset of “if I keep doing this a little longer, I’ll finally be able to quit my job and live the life I’m dreaming of”. Truth is, complacency and comfortability sets in day by day, making it that much more difficult to pursue what you truly want.
Which is why I think as creatives, we’re well positioned to build a career that we don’t need to completely “retire” from.
We can retire from the 12 hour days and constant creation at some point, but we may never want to retire from the craft itself. It’s hard to step away from something that you’re truly passionate about.
Ultimately, what I believe we should be chasing is flexibility and optionality, not an arbitrary age formed around outdated regulations.
There are many ways to increase your financial flexibility so with that, here are a few steps to beginning planning YOUR retirement:
Before diving into tactics and strategies, take some time to think about what retirement means to you. For example, I personally enjoy writing and creating and believe that my "retirement" will still consist of those two things. So I'm trying to build a financial foundation around me that will allow me to do those two things without worrying about the financial benefits from doing so. I also want to travel whenever I want so as long as I can write, create, and travel without being pressed for income, I would consider myself "retired".
Going back to the first sentence of this section “retirement is a dollar amount”, this step is where you begin to figure out what that dollar amount looks like. This can be done by evaluating your current lifestyle, income, investments, and expenses and comparing them with where you want to be. Those numbers will then give you a starting point that allow you to begin creating a financial plan.
Do you need to have $1,000,000 invested and $40,000 of recurring annual revenue to live out your dream life? Or maybe $3,000,000 invested so then there's no need for secondary income?
There's no right answer, only what's right for you and your life.
After determining your personal numbers, you can then begin creating a plan with action items and strategies to reach those goals.
For example, if your goal was to have $2,000,000 saved because it would provide you with enough income to live the life you want, you would need to figure out how much to save each month and each year to reach that goal within your desired timeframe, select which accounts to place money in, pick investments, and then make adjustments along the way.
You can only begin planning and taking the right actions after you've figured out what you're working towards.
Figuring all of this out can be confusing and time consuming, so if you ever decide that you want to work with a financial professional, I created a quick free guide:
7 Questions to Ask When Meeting With a Financial Planner
Also read: How much does a financial planner cost?