Money Advice

What's the purpose of retirement?

Posted by The Simply Money Advisors Team on Feb 8, 2018 2:51:12 PM

Retirement is a common goal for most workers today - you're probably hoping to get there someday - but did you know that retirement is a fairly recent concept?

Retirement didn't become popular until after the Industrial Revolution. Prior to that, farmers worked until they simply couldn't any longer. In fact, in 1880, 78% of American men worked past age 65 (assuming they even made it to that age - life expectancy was just 38).

During the Industrial Revolution of the early 1900s, older factory workers began to show signs of aging and illness. There was an increase in the number of sick days they requested, meaning productivity dwindled and business owners saw fewer profits. Older workers refusing to quit made it hard for youthful workers to find work. By 1910, 58% of men over 65 were still working.

In the 1920s, some small company pensions required a mandatory retirement. Then, in 1935, President Franklin D. Roosevelt proposed the idea of Social Security to help provide a 'safety net' for retirees.

But it wasn't until after World War II that companies started to take seriously the idea of providing their workers with retirement benefits. Essentially, growing American prosperity meant workers could afford to quit working in their older years.

Present day, retirement has morphed into an American dream. A place where you can leave all your troubles behind and simply participate in activities you enjoy. Retirement is the carrot at the end of the rope, motivating you to work hard and save every penny you have so you can live securely in retirement and have a sustainable lifestyle.

Simply put, many Americans dream of the days they can fire their boss.

Retirement may seem miles away and almost as if it will never happen. But one day, you’ll wake up and be retired. That’s why it’s important to understand what will fulfill your life in retirement and what its true purpose is.

So, how can you take action now to ensure you live an abundant life in retirement?

Develop relationships

Make it a priority to cultivate meaningful relationships that can last you a lifetime. It’s easy to get caught up in work and family and not make time for your friends.

Life can get in the way of living from time to time. But you want to be able to share your retirement with people that add value to your life. People that you enjoy being around. Maybe even people you would like to travel with.

People make your life joyful. It’s important to work hard on cultivating relationships now, so you can share your later years with people you value.

Appreciate freedom 

Before you retire, you need to determine how you want to spend your free time. You are no longer restricted to a 40-hour work week, and can use your time as you please.

Do you want to learn a new language? Do you want to paint and sell your art? No matter how you choose to spend your time, start working on a hobby you will enjoy in the future. This will not only give you a purpose for your retirement, but it will bring you joy in your present life.

Go on an adventure

Depending on your vacation days, it may be hard for you to go on all your dream vacations. When you reach retirement, it may be the perfect time to go on all the adventures you have dreamed about.

You will, of course, have to budget for them, but since you have no time restrictions you can go wherever, whenever you want. Start planning and visioning where you would like to go and add it to your retirement goals.

Try a side gig  

Ever consider making extra cash doing something you are passionate about? Retirement may be a great time to fully pursue your passion.

If you have been making a little extra money on the side doing something you love, you now have more time to make your dream a reality. If you haven't, now could be the time to start.

Working on a side gig throughout your career can help you expand your creativity and productivity. It can help you think outside the box. So, start your side gig now and then you will feel fulfilled in retirement by spending more time pursuing it. 

Recalculate 

Life happens, your goals change. It’s important to always recalculate your personalized financial plan when faced with any financial decision. You may decide 20 years into your career you want to open your own business. This could drastically change the forecast for your retirement.

It’s important to do a check-in every year. Simply Money Advisors recommends partnering with a trusted financial planner (preferably a Certified Financial Planner™) to evaluate your financial situation and make sure you are on track to hit your retirement goals.

If your financial goals change, your financial planner can help you recalibrate your personalized financial plan to help you achieve your new goals.

The Simply Money Point 

Even if retirement feels like it is forever away, you can still make adjustments to your lifestyle to plan for the future. Don't make your life just about work. Seek activities and people that truly bring you joy.

And to know if you're on the right financial track to live the kind of retirement you want, we invite you to download our free guide, "How to Prepare for Retirement:"

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Topics: Retirement

Disclaimer

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Simply Money Advisors), or any non-investment related content, made reference to directly or indirectly will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, this content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained here serves as the receipt of, or as a substitute for, personalized investment advice from Simply Money Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Simply Money Advisors is neither a law firm, a certified public accounting firm, nor a tax advisory firm and no portion of the blog content should be construed as legal, accounting, or tax advice. Please consult your own attorney, accountant, and tax advisor for legal, accounting, and tax advice. A copy of the Simply Money Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Advisory services offered through Simply Money Advisors, a SEC registered investment adviser. Insurance services are offered through Simply Money Insurance Agency, a separate entity from Simply Money Advisors. Simply Money™ and the spiral symbol are trademarks of Simply Money IP Holdings, LLC.

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