By Robert O. Graves, CFP® CERTIFIED FINANCIAL PLANNER™
I’ve never agreed with popular images of retirement: People spend most of their adult lives working for a company. They wait for that final day when they will empty their filing cabinets, clear their desks, and pack all of their belongings in a cardboard box. They then attend an office farewell party. Afterwards, they spend the rest of their lives unemployed. Although this scenario works for many, unfortunately my experience helping countless clients tells me that the following this paradigm can lead to boredom, frustration, and even early death.
When you look up “retire” in the dictionary, definitions such as the following appear: withdraw, retreat, stop working, and leave. Does retirement then mean that you’re going to withdraw – like troops in a war? Does it indicate that you’ll retreat like a bug running under a rock? Or does it suggest that you’re going to stop working, as if you’ll leave work for good and spend the rest of your life in a rocking chair? With images like these, it’s no wonder that getting old has a bad reputation!
Millions of people in the United States have invested their adult lives working, with retirement being their Number 1 goal. But once they reach the Promised Land, they feel dissatisfied.
From a technical standpoint, retirement’s meaning depends on your reference source. If you define retirement according to when you’re eligible to receive Social Security benefits, the age can range from 62 to 70 years old. If you measure retirement by Medicare eligibility, it happens for most people once they turn 65 years old. If you define retirement by your Individual Retirement Account (IRA), you can elect to have your distributions begin at age 59½, and you must take distributions when you are 70½ years old. So as you see, if you look at retirement from a Social Security, Medicare, and investments standpoint, the age ranges from 62 to 70½ year old.
As far as employment is concerned, different companies have different rules. Some give out their employees’ pensions once they become 55 years old. If you’re self-employed, then it’s up to you to decide. In addition, you can choose to retire from your current job and no longer receive a regular salary while your employer turns around and rehires you as a part-time employee. Plenty of my clients have amassed an immense amount of knowledge throughout their careers. Once they retire, they aren’t’ full-time anymore. They often do remain, however, as part-time consultants.
Due to my work as a financial consultant in the medical industry, many of my clients are physicians. As a whole, doctors, compared to other professionals, work well beyond any conventional definition of retirement age. Some of my clients are providing life-saving surgeries in the 70s. This example points to the fact that some of the world’s most active, successful people are eligible to walk into a Social Security office today and pick up their monthly checks. But they’d probably be the last ones to define themselves retired.
Excerpt from Robert O. Graves book, Your Life Plan: A Guide to Financial Freedom.
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