Retirement is not a concept that existed in the 19th century. It came into its own in the 20th century and there is much speculation that it won’t exist in its current form much further into the 21st century. In fact, we are already moving in the direction of a radically different retirement than the one you’ve probably envisioned. The reason: things are changing and at a rapid rate.
Just a few years ago, the notion of retirement was to quit your job around the age of 65, live a life of leisure, deal with declining health and eventually die. Today, it’s not unusual to see people begin to mix work and retirement and that trend is not only going to accelerate but expand.
- We are living longer. Futurists are forecasting the generation in grade school today will easily live to be 100. Advances in health care have already extended life expectancy in America significantly. Just think what will happen when we eventually find cures for some of the most common causes of death.
- Work isn’t as hard as it used to be. I know that you would seriously argue this point right after a long week at your job, but the truth is that most of the work in this country has moved from physical labor to “brain work” that while tiring is not as taxing on the body as manual labor.
- We are resisting the notion of advancing age means declining usefulness. Maybe it’s the baby boomer’s last great act of defiance but many of us are refusing to “get out of the way” when it comes to work. (Much to the chagrin of the younger generations looking for jobs.)
All of this is leading to the thought that retirement will evolve into a cyclical lifestyle of work, sabbatical, re-education and back to work in potentially a completely different field. (I call it the wash, rinse, repeat lifestyle.) The change is, in fact, being driven by necessity because of extended life expectancy and the financial strain it would place on one to live from 65 to 120 without a job. Something to think about.
Does this mean that the concept of retirement planning, saving and investing will also become obsolete?
Not at all. It will take money to take a break from work. It will take money to re-educate yourself and to pay your living expenses while you are reinventing yourself. And, with the evolution of “the gig economy” and the transient nature jobs, you will always need a backstop to ensure you have a regular, predictable, dependable stream of income.
In short, the rocking chair has retired, the 401k’s purpose will evolve, your life will become cyclical rather than linear. But, the need for planning will live on. Let’s talk and Get Ready for the Future!