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We are all social animals: we crave interaction and generally don’t like being alone. We crave that feeling of togetherness and being part of something bigger, the added comfort and safety that comes with being part of a group or a herd.
The herd protects individuals from being singled out, and in the animal kingdom provides safety from being killed by a predator.
Many people have developed a “herd” mentality in life deriving comfort by going with the flow and if everyone else is going in one direction they must know something that we don’t. It is easier not to complicate things by forging our own path based on what we learn or believe. What happens if we are wrong and the herd is right?
When it comes to retirement the “herd” has been doing this retirement thing for a long time. So they must be right, right?
I used to be a follower, part of the herd if you will. I was willing to put my fate in the hands of others and follow along blindly. Then I realized the retirement herd was heading in the wrong direction, and this wasn’t going to work for me. Let me explain.
Retirement worked when life expectancy was much lower
When the concept of retirement was created just over a hundred years ago, it worked. The reason it worked was because life expectancy was much lower and if you were one of the lucky ones to reach the retirement finish line, you could expect to enjoy a couple of years in the proverbial “rocking chair,” watching the world go by.
One hundred years ago people worked practically to the end of their lives. They had little capacity to be active and enjoy satisfying retirements like we can today. Most jobs were more physical in nature, and most people’s bodies were worn out after years of hard physical labour. This also meant the period of retirement was short, so the cost of retirement was very manageable: work 30 years to retire for two years.
As you can see below the relationship between retirement age and longevity changed dramatically but for some reason the concept of retirement hasn’t evolved.
That is a problem today: we still approach retirement as we did a hundred years ago, even though the playing field has changed.
1) People are living longer and many of us will enjoy a retirement that lasts as long as our working career. 30 years of work, followed by 20+ years of retirement.
2) People are healthier and able to be active in their retirement years. People want to do more travel, play sports, etc., and this will cost more.
3) The workforce has changed from physical labourers to knowledge-based employees. Many of our careers provided mental stimulation and our minds aren’t ready to retire simply because we are in our sixties. Our minds still crave a challenge and we need to find ways through problem solving, and learning new things. Self-induced boredom brought on by stagnant retirement is a mind killer.
4) Finally, from a financial point of view the numbers don’t work anymore. It’s very difficult to finance a 20+ year retirement with 30 years of work.
That’s just the way it is.
It’s time to stop blindly following the herd and seek out your own retirement path. It’s foolish to expect that the herd can lead you to a great retirement, as only you know what you want and need in order to be happy. You should be focusing your efforts on making a great life for you and your family while you still have the time and health to enjoy it.
Figuring out this retirement thing is one of the most important processes that you will ever go through, the traditional full-stop retirement is not the best way to go. Trust me!
I hate to be the one to break it to you, but sitting on a beach all day drinking Pina Coladas just isn’t going to do it for you after a week or two.
Think about it!
Mike Drak is an author, blogger and speaker based in Toronto. He can be reached at michael.drak@yahoo.ca. Victory Lap Retirement, co-authored with Hub CFO Jonathan Chevreau, is a Globe & Mail bestseller available for orders online and on Kindle and Kobo ebooks. The paperback edition is available in Chapters Indigo and many independent bookstores, as well as Costco. This blog originally ran on Mike’s site on March 30th and is reprinted here with permission.
