There have been quite a few articles written lately about "The End of Retirement As We Know It." There are a variety of reasons for this, which I would like to discuss. I would also like to address the fact that this may also not be a terrible thing, at least from a certain perspective.
Because of the recent financial crisis and downturn in the economy, many of the overly optimistic and irresponsible calculations regarding retirement, investment returns and pensions have been brought into question. The Federal government is being forced to question long-term entitlements and what is realistic. State and local governments and the unions that often represent their workers are being pressured to question the generosity of their pensions and other retirement benefits. Individuals that didn't have a holistic, professional retirement plan are now wondering if they will be able to retire at all. And finally, some people approaching retirement without a fulfilling plan are questioning what they even want to do in this period of their lives. I guess some people are recognizing that many years of government-funded cruise vacations aren't really what we should all be after in life.
All this being said, I am a strong believer in striving for financial independence and in being able to have time in life in order to achieve balance and fulfillment. There are several different ways to get to this point, and a realistic plan often includes a variety of these. One option is the government plan known as social security. This progam was designed with reasonable ideas and intentions, but its current path is unsustainable. Although it will be around in some form for many years to come, I would suggest a muted expectation of how this might fund future living expenses. A second is a retirement plan from a public or private sector job. Once again, some pension plans have not been well designed and will see changes in the years to come, but a well-funded and well-managed employer plan can provide some future living expenses. Finally, and most importantly, is a unique, well-designed, individually funded plan for financial independence or flexibility. This can include well-managed personal savings, a reduced income stream in a fulfilling and flexible profession, or lifestyle changes to free up resources and/or reduce living expenses.
Our lives, minds, and abilities to work, produce and be creative contributors to society are all gifts. Our free society gives us the opportunity to use these gifts. I encourage you to take charge of your personal situation, prioritize your goals and dreams and make a plan to achieve them!
