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Financial Independence: Reimagining Retirement

grandparent playing with grandchild, image by Pexels user Mikhail Nilov

I’ll let you in on a little secret: Retirement is overrated.

I can see why it sounds good in theory. You listened to the experts and saved and invested over the course of your whole life, waiting for that glorious reward at the end. No alarm clocks or commutes. No bosses telling you what to do. No staff or clients to manage. Freedom! Now, it’s time to really begin embracing what it means to live.

Unfortunately, as a financial adviser, I’ve seen the dream of retirement quickly become a nightmare.

The Trouble With Retirement

For many Americans, retirement isn’t all they hoped for because of the financial realities of not having saved enough. Their investment choices might not have panned out as they would have liked, or maybe they faced the pressures of an unanticipated diagnosis necessitating expensive and extended care. Good planning can mitigate these sorts of risks, but it cannot fully neutralize them.

More often for the clients I help, though, retirement is disappointing because of a pitfall that is almost taboo to discuss: ennui. Granted, people grinding through tough jobs who still idealize a retiree’s bad dream are unlikely to extend much sympathy. Still, for many retirees, the problem is real.

Many people who are monetarily successful throw their whole selves into their careers. They work long hours to solve complex problems, and receive rewards including big pay days, admiration, and the dopamine rushes that accompany one win after another. In various ways, they receive the feedback that they are better than average and that their actions have set them on the right track. Then, one day, their careers end and retirement begins — and suddenly all those challenges, and the forms of validation that come with them, go away. One day you’re leading an organization, or you’re the expert who saves people’s lives, who solves their biggest problems or who keeps them out of prison. The next, you find yourself just an average Jane or Joe.

Regardless of whether the transition from work to retirement is your choice or forced upon you by outside factors, you can and should take time to mourn the loss of your professional identity if you need to. It’s a major life change, and change is rarely easy. This is especially the case for individuals who made their careers central to how they understood their purpose. A void can often remain after the purpose that drove you for your entire career is gone.

I have seen this story play out many times, with varying degrees of intensity. Kids can’t wait to grow up; adults can’t wait to retire. People feel the need to go abruptly from working full speed to stopping completely. They often fail to realize that such a sudden change might not be ideal, let alone necessary. Sometimes our expectations about a rosy future can be as delusional as a corresponding yearning for the good old days.

As a financial planner, I have always been very future-focused. I’m the type who is willing to trade out a marshmallow today for a promise of two in the future. I am also lucky that I pursue a career that I love, one that gives me a feeling of purpose and meaning while not leaving me physically exhausted at the end of the day. Palisades Hudson offers a flexible work environment devoid of many of the bureaucratic aspects that can be pain points in larger organizations. This is all to say that I know that my views come from a privileged position that does not apply to everyone. Traditional retirement truly can be restful, or even necessary for those who are no longer able to work due to physical or mental constraints. It can also be highly rewarding for those who consciously choose not to work in order to pursue some other cause, such as volunteering or helping their adult children to care for their grandchildren.

What I dislike is the idealized version of retirement often perpetuated by concepts such as the FIRE movement — Financial Independence, Retire Early. Movements like FIRE frequently reflect the view that work is something to get through as soon as possible, and that leisure and fulfillment is something to pursue only when the work is done.

A Balanced Approach

Finding the proper balance is essential in all things in life. This applies to saving and investing, managing your time, or pursuing competing goals. Too much concentration in any one area can be hazardous to your wealth, health, relationships and joy. Rather than focus primarily on saving for an extended traditional retirement, what if you began reimagining your working life to make it more enjoyable and sustainable?

Retirement doesn’t have to be binary. You can decide how to balance the demands of your career with presently pursuing the freedom and joy you imagine you will find in retirement. Of course, this requires coordination with employers and clients, and a bit of creativity, to make it work. It will be easier in some professions than others. However, employers have increasingly offered flexibility to retain valued employees. Working remotely itself is a major step to greater autonomy.

The FIRE movement gets some points right. Like its proponents, I don’t believe we should wait until our mid-sixties to pursue the life balance a successful retirement should include. The time to consider that balance is long before you retire. However, I would love to rebrand the movement to FIRR — Financial Independence: Reimagine Retirement. Work is not inherently something to avoid, and pure leisure is not the pinnacle of joy that society often tells us it is.

Victor J. Strecher, a professor at the University of Michigan’s School of Public Health and Director for Innovation and Social Entrepreneurship, introduced me to the difference between eudaimonic and hedonic happiness, originally developed by Aristotle. In basic terms, eudaimonic happiness is the type of well-being that comes from the pursuit of purpose, meaning and growth; hedonic happiness springs from pursuing pleasure and avoiding pain. All of us naturally seek some mixture of these two sorts of happiness, but the way a given individual balances these inclinations is unique. When it comes to retirement, understanding what type of happiness speaks to you — and how various goals for retirement fit into both categories — is key. Sometimes the happiness we imagine we’ll get by sitting on a beach, watching TV, or golfing is real. Other times, these pursuits can leave us craving a more lasting happiness.

My prescription for avoiding “Retirement Hell,” as author Mike Drak has termed it, is to pursue balance throughout your life. The problems that some retirees encounter when they stop working full time are normal, but they also suggest a life previously tilted too far toward work. As with most problems, this issue is easier to resolve the earlier you tackle it. Rather than focusing on when you will retire, focus on incorporating the positive aspects of your ideal “retirement” into your life as it is today.

Five Tips For Reimagining Your Own Retirement

I can’t tell you how to imagine your own retirement. But I can offer some practical advice for taking a broader view of your life before you get there.

infographic on five ways to reimagine retirement.

1. Don’t invest too much of your self-identity in your career.

One of the common traits of people who wind up in retirement hell is that they derived too much of their sense of self from their job during their working years. This is one of those things that makes me personally fear retirement. I once told a prospective client that he could trust that I would be there for him later in life, since I define who I am as being a personal financial planner. I can sympathize with readers who find this advice challenging.

When a career ends, however, is not always something in our control. Companies shut down, industries change, and our personal health can take unexpected turns. While many professionals choose to work into their 70s or beyond, it is important to know that you may not have full control over when you start the next chapter of your life.

Bearing this uncertainty in mind, reflect on the aspects of your life outside your career that you find meaningful and fulfilling. If it is hard for you to think of these aspects, it’s a good sign that you should cultivate a wider scope for your activities — and a basis for your self-worth untethered from your professional achievements.

2. Find varied ways to pursue your passions.

Building off of the first point, consider volunteerism and community involvement. I joined the board of directors of Caritas of Austin, which aims to end homelessness in Austin. The position allows me to use my financial skills in a totally different way than I do in my day job. It brings me joy to repurpose my talents for the good of the community, and serving on the board allows me to connect with like-minded people who are not tied to my career.

Everyone’s passions will lead them in different directions. In addition to volunteering, you may consider taking classes related to a hobby; joining a musical ensemble or sports team; regularly exploring the natural world close to home and farther afield; or pursuing a creative goal such as writing a novel. Some of these passions might lead to an “encore” career after your first, or they may always remain leisure activities. The important thing is to resist the impulse to put all your energy exclusively into your work at the expense of your other interests.

3. Prioritize your mental and physical health.

I am not a doctor, and I am certainly not your doctor. Pursuing health may take a variety of forms depending on our genetics, our existing conditions (if any), and our lifestyles. Even so, we all know the basics: Incorporate exercise into your routine. Make health-conscious food choices, including plenty of fruits and vegetables. Get enough sleep. Consider adopting practices such as mindfulness and gratitude. These basic concepts may sound simple, but many of us spend a lifetime figuring out how to apply them consistently. Sometimes, we end up sacrificing our health while focusing on our careers.

You may also want to keep an eye on scientific advances. We continue to learn more about human health and longevity all the time, and staying curious may lead you to adjusting your choices in the future. As the country’s population continues to age, an expanding industry has focused on improving our longevity. This industry includes health hacks like those referenced in Peter Attia’s new book “Outlive” and the more approachable Netflix miniseries “Live to 100: Secrets of the Blue Zones.”

4. Build relationships — and not just with your co-workers.

Most people know that even close workplace relationships can easily fade when one of you moves on. In retirement, this effect is often magnified. Having warm relationships with your colleagues is great, but it is important not to neglect relationships in other parts of your life, which are more likely to endure regardless of your career stage. If your work takes over too much of your time, you may find it hard to truly invest in authentic relationships with your spouse, your other family members and your friends.

Especially for individuals with demanding jobs, it can feel challenging or even self-indulgent to carve out time in your schedule for friendships with no professional component. But step back and think about what the people in your life mean to you, and whether they know how much you value them. If you are an especially pragmatic person, also remember that close friendships can be good for your health. Cultivate your relationships throughout your adult life. This will both ensure those relationships last and enrich your life in the present.

5. Make more intentional decisions.

From pursuing your passions to deepening your relationships, the previous steps will all be easier if you consider your life in a more holistic way. While it is easy to get caught up in daily responsibilities, making space to reflect can help you to prioritize correctly. Don’t just rest on long-held assumptions about yourself, either. Cultivate a healthy sense of curiosity. You may discover that you have sparked a new interest, or find that something you were once passionate about has lost its shine. It’s normal for your priorities to shift. Intentional decision-making can keep you from maintaining old patterns purely out of habit.

Intentionality also means recognizing and resisting the impulse to follow the herd. You may feel pressure to hit certain milestones when you might be happier ignoring conventional wisdom and going your own way. For example, many people feel that owning their own home is a standard part of becoming an independent adult. But a particular individual may value the flexibility of renting or choose to live in a multi-generational home in order to support family members. This doesn’t make that person any less of an independent adult than his or her peers.

As a financial planner, I often talk to my clients about their goals. There isn’t one goal or set of goals that is right for everyone, in financial planning or in life. My colleagues and I have observed, in this space and others, that practically no one wants to amass the largest possible net worth for its own sake. People want to grow wealth in order to support their lifestyle of choice, or to provide for their children, or to enable their philanthropic goals. In a financial plan, not every choice has to optimize for wealth; instead, good planning reflects an individual’s priorities and allows for trade-offs he or she may be willing to make. The same holds true for making a retirement plan.

The classic vision of retirement as a time of leisure may call to you. Or you may find the idea horrifically boring, even on paper. Whether you fall at either of these extremes or somewhere in between, taking the time to get to know yourself better and to articulate your goals long before retirement begins can help you to understand what you may want your second act to look like. Don’t simply expect the pieces to fall into place the morning after your last day of work. Creating a rich life begins when you decide it does.

Senior Client Service Manager and Chief Investment Officer Benjamin C. Sullivan, who is based in our Austin, Texas office, contributed several chapters to our firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55, including Chapter 13, “Federal Income Tax,” and Chapter 16, “Investment Psychology.” He was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.