What does it really mean to retire? | Allworth Financial

When thinking about tomorrow, even though you probably see retirement as a natural progression in the arc of your life, if you haven’t mapped out every minute of your future just yet, go easy on yourself.

From a historical perspective, the concept of saving enough money to live a life entirely of our choosing is still in its infancy.

Case in point:

• Ancient civilizations had no concept of not working. Simply, you lived with your family or extended family, and your days were spent laboring in support of the feeding, care, and protection of the people around you, and your evenings were likely devoted to passing along the knowledge of your culture, your family history, and the practical lessons learned throughout your life that could help your family survive after you were gone.
• It was only as recently as the 18^th and 19^th centuries – often known as the industrial revolution – where a substantial percentage of people began working outside the home to earn wages in support of their families. Most people were farmers and what we consider a 'traditional' retirement today was unheard of back then. Again, you typically worked until you were physically unable.

Then a few things happened that substantially altered our perception of retirement.

First, there was the advent of pensions, which originated from the military and public service sectors. Pensions were a way of enticing people into doing what were then generally low paying jobs (and often physically demanding and dangerous) in exchange for a guaranteed income after a certain period of contribution to the well-being of society.

Next, the creation of Social Security (1935) was another milestone in the public’s perception, even its greater realization, that there could be life after work.

When the 1960s, 1970s and 1980s saw a massive increase in small business ownership, and a corresponding decline in the number of companies that offered pensions, this gave rise to employer-sponsored retirement accounts, most notably the 401(k). (As an aside, we once had the person who is widely considered the inventor of the 401(k), Ted Benna, as a guest on our Money Matters podcast.)

Which brings us to 2023. In the last 30 years, retirement has not only continued to evolve, the meaning of the word “retirement” has changed so much, that virtually no two people define it the same way.

Some contemporary trends in retirement include:

• A gradual (phased) transition into retirement, which is a measured wind-down of the time a person spends working, and which can occur over many years.
• A wider retirement window, where some people stop working altogether in their 50s (and never look back), while others enthusiastically work well into their late 70s, or beyond.
• Semi-retirements and late-in-life career changes, where individuals leave their careers to start businesses or to work in professions or fields of study that they had always wanted to engage in or be a part of.
• And then there’s gig retirements, which offer older workers maximum flexibility, with the upside being that they get to engage in low stress jobs.

The evolution of retirement. Recent retirement trends. The above made me think about some of the more unique later-in-life “side hustles” (and, yes, I dislike that term, as well), of people that I know, some of whom are clients of Allworth Financial.

These include:

• Travel blogger: Just as there are probably more outlets for writing and creative work than ever before (and you can also create your own), if you’re someone who likes to travel, those travel websites and magazines desperately need a steady stream of new content.
• Pet sitter: I know someone who used Nextdoor.com to build a thriving dog walking and pet sitting company. They lost weight and he swears he has never been happier.
• Need a little extra money or companionship? You could rent your home (or a bedroom) on Airbnb or VRBO.
• Tutoring, consulting, teaching, tour guide, or lecturer: All those years of work and expertise can be utilized to help people advance their subject matter knowledge, get started in a new career, or get a leg up in an old one (and the pay is not half bad).
• Yoga or fitness trainer: You do not have to be a marathoner or have been a pretzel in a previous life to train people or teach yoga. These high demand gigs need people of all ages, fitness, and experience levels, and they will almost certainly make you healthier. As a bonus, I think you will find that credentialing opportunities abound.
• You could become a personal chef or even work in a winery.

After all this, you may be asking yourself, “What does it really mean to retire?”

The fact is, the public’s expectation of life during retirement is so decentralized (from what it was 30-40 years ago), that billion-dollar marketing companies are trying to invent an innovative word or phrase that they hope comes even close to capturing the essence of what “retirement” means to a majority of people today.

I don’t think it can be done.

But no matter how much some things change, others remain the same.

Save. Invest. Repeat.

And if you haven’t already, select and partner with a fiduciary advisor to help you create an investment and holistic financial plan that is simultaneously broad and narrow and specific to you. This will help gauge your readiness for any future outcome, while helping you to precisely define and prepare for what it is you want from your future.