Where did the idea of retirement come from? It was not that long ago that most people were fully employed in their teens and worked until they died in their mid-30s.
The concept of retirement began in the Revolutionary War when pensions were offered to those who suffered battle injuries. After the Civil War, the practice continued, and eligibility requirements were liberalized to eventually include those who weren’t injured in battle and then to family members of soldiers. Pensions were becoming common by the time the Roosevelt administration started circulating the concept of Social Security in the United States. Some would mark the passage of the Social Security Act in 1935 as the birth of modern retirement.
The concept of moving older, less productive workers out of jobs through pensions caught on in the 1930s. 20% of the labor force was covered by the end of the decade. However, the modern concept of retiring in leisure did not evolve until the second half of the twentieth century. A major factor was that leisure became more affordable and attractive. Meanwhile, advances in health have allowed people to enjoy leisure and travel well into old age.
Why Working is Key in Retirement
Retirement is idealized by many people. Being able to do what you feel like doing when you want to do it is considered a reward for a lifetime of hard work. It evokes the idea of enjoying life to the fullest without obligation, commitment or worry. However, working has been found to be a key ingredient to a healthier life. Working longer contributes to better mental health as well as physical health. Human beings are social by nature. We thrive on interaction with each other which can be found daily through work. Thinking, problem-solving and socializing boosts our mental state and keeps the mind fresh.
Focusing on More than Finances
The financial press tends to focus on the financial aspects of planning for retirement. Are you saving enough money? Will your savings last through the end of life expectancy? These are all important retirement planning topics and deserve our attention. However, there are other important aspects of retirement planning that don’t involve money or income taxes.
Have you pictured what your life will look like when you no longer need to go to work? Perhaps you see yourself traveling, playing golf, gardening, spending more time with family, or taking care of projects around the house. Visualizing life after work is a very important part of planning and deserves just as much thought and attention as counting the nest egg. Researchers have learned that many people continue to work into their 70s because they have no idea what to do with their free time. There is nothing wrong with continuing to work if you love what you’re doing. In fact, I believe that should be the goal—to spend more time doing what you love to do.
We need to change our vision of retirement to one of a career change. It can still be a time of self-financed independence, but we need to continue to contribute to society. Find ways to use your problem-solving skills and stay engaged in the community. This should be a requirement for people planning to retire.
Retirement is a Family Affair
No discussion about social contact would be complete without considering what retirement will mean to your spouse and family. Things will change around the home whether your spouse is already retired or still working. Take time to communicate openly before retirement to make sure you are giving each other enough time and space to pursue individual interests. When does your spouse want you to retire? Make sure you are both on the same timeline. The first year of retirement can be a difficult transition for both of you as you find your new routine.
Managing the Transition to Retirement
Many people find the most difficult part of adjusting to retirement is the sense of time. Transitioning from a lifestyle with deadlines can create a different kind of stress. The only deadlines now will be the ones you set for yourself. How are you going to handle a more relaxed schedule where days are not measured by how much you were able to get done? You should still have goals and keep track of things you want to accomplish. This should be part of planning the first year in retirement. What destinations are on your travel list? Are there organizations you want to get involved with and how much time can you give them? Don’t focus on planning every minute; focus on enjoying the journey.
It’s easy to think and dream about retirement. When it comes time to do it, you need to be prepared for the time you’ll have on your hands and how you will pursue happiness without your career. There will naturally be feelings of anxiety and fear involved with letting go. Setting new goals for your life after retirement can replace those feelings. Moving towards new goals will help transition to this next chapter in your life.
- Human beings thrive on interaction with each other which can be found daily through work.
- A good goal in retirement should be to spend more time doing what you love to do.
- Set new goals for your life after retirement to avoid the feelings of anxiety and fear involved with letting go.
By Rick Rodgers
Read more from Rick Rodgers by clicking here to purchase his book.
An Indispensable Guide to Tax-Efficient Retirement Planning and Financial Freedom, by Rick Rodgers
Using easy-to-understand language and real life examples, Rick teaches you how to avoid savings pitfalls and costly tax mistakes – many you may not even know about – so you can enjoy the retirement lifestyle you want.