While I do think its important to save for retirement, its just as equally important to not put off having the life you want until you’re 60. In other words prepare for the future, but don’t put off living.

Speaking from a personal perspective (on your point regarding entrepreneurs), my health premiums are lower now as a self-employed person as they were when I had the “Cadillac” plan with my previous employer. From a risk management perspective, health costs can decrease as long as there are no extreme health issues to face. If the extreme case arises, just be sure your deductible is not too high to cover with an emergency fund. Health care costs are largely a component of risk management.

Thanks for adding your thoughts…

As I figure out what I think I’ll want to be doing down the line, I then base my financial plans around it. I find it to be more satisfying than saying – “here’s what I have, what can I do with it?” Of course, I do think it’s tougher to do when much older, to some degree.

With respect to social security, I’m not counting on it at all. I’m in my late 30′s, and I don’t factor it in at this time. If it happens, it’s a very pleasant bonus.

There is a large working class in America, untrained and possibly unqualified (at the moment) for desk work, and faced with physical issues from their jobs. Workforce development will be needed if we’re going to help those folks.

It just makes a lot more sense to keep a healthy SS program in place, and for reasonable ages, even for people who are in a higher income bracket like us. We want to see our parents retire comfortably, but neither of us come from wealthy backgrounds, and we aren’t currently planning on funding their retirements (that doesn’t really seem fair to our children, for one thing, it would be their college funds doing the funding). Not to mention everyone else’s parents, who we also don’t want to see in the breadlines. Fully funding SS seems like a win-win for everyone, I just don’t understand why no one out there is complaining about the cap! Forcing people to work until 70 just seems insane.

Many qualified plan (i.e. profit sharing) plan designs, for example, are “integrated” with Social Security because of the cap in place now.

In other words, certain plan designs allow for the higher paid employees and owners to put more away toward retirement because of this “disadvantage” of not having more income as a percentage of salary put aside in Social Security.

If the cap is raised, some of the sweet profit sharing deals will be endangered.

“One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” ~ Plato

And must continue to disagree re: taxes. To my certain knowledge, my dad pays more in property taxes now, in retirement, than he ever paid in state income taxes before moving to Florida. The utility bills are just the icing on his headache.

There are plenty of people who moved to Florida who thought they were going to save on heating bills, only to discover air-conditioning a poorly insulated house was even more expensive. Your argument that people sometimes miscalculate just reinforces my point. The difference in taxes is a minor financial issue and not likely going to be very important either financially or in terms of your fulfillment.

While health is certainly an issue on working past 70, the larger issue is the assumption that someone is going to want to employ you. Most new hires require an investment by the company. Making that investment in someone who is going to be around for a short time doesn’t make much sense. Wanting to work, being able to work and finding a job are not the same things.

1) Don’t allow others (not even this blog) to tell you what retirement means;
2) Retirement is not only a financial goal but a lifestyle choice; and
3) Everything is in flux: we are always evolving and “writing new chapters” as we move through life.

@ #2Rob: It sounds as if you’ve discovered what I believe to be an essential element of success and overall well-being: Balance!

@ #3Paul: Metaphors can be misleading! I like your idea of the boxes.

@ #4 Ross: Outstanding thoughts! Above all, my intention was to get readers to be aware of conventional wisdom and its many pitfalls, especially from a behavioral perspective. Social Security, for example, is likely to continue its existence in some shape or form for our lifetimes and beyond; however, from a behavioral perspective, should we all allow the federal government to decide at what age we may “retire?” It simply takes some rethinking and movement away from money and abstract thought and into more concrete meanings to follow one’s own path.

@ #6 Jessica: Great thoughts! Removing Social Security (and money itself) from the retirement planning equation can be healthy: If one defines retirement in non-monetary terms first, the resulting plan is likely to be more life-centered than money-centered. I believe this is a healthy perspective, just as thinking of death is healthy: It forces one to re-focus on what is really important in life–what is happening now.

@ #12Brent: You absolutely ARE a “target for this wisdom!” If you enjoy doing what you do now, even if you have no clue what you will be doing in the future, and this is your definition of retirement, then so be it!

@ Everyone & JD: I love GRS readers because the diversity of thought and level of knowledge make for a wonderful learning experience for everyone, including the blog authors!

Above all, I thank you all for provoking thought…

In summary, A few quotes from Michel de Montaigne:

“The beautiful souls are they that are universal, open, and ready for all things.”

“There is no conversation more boring than the one where everybody agrees.”

Cheers…

Kent

NOT overspending on housing. NOT planning to live somewhere expensive after leaving full-time employment. NOT planning to stop full-time work before age 70 – since I have family history and personal habits to support expectations of full health and ability until well past that age. Saving. Building a part-time business for extra income.

Social Security will, I believe, always be there in some form. Our nation has never yet completely cancelled a benefit once it has been enacted. Turning the discussion to SS takes it off its proper target: what each of us can do, personally, to better our situation regardless of the nation’s economic policies.

And btw, moving somewhere for tax considerations may seem silly to you, but it is costing a lot of Florida retirees a packet – because they only looked at income tax, and not at property tax. My dad is one. You can’t not think about these things.

Brent,

No, it makes you lucky. When I was your age I was packing used clothes to be sold in Africa. There was NOTHING fulfilling about that job. But at the time (or within the same time frame) I bought a bicycle (for transportation), a guitar, a harmonica, a caste iron skillet, a sleeping bag, a portable camp stove, hiking boots and a tent. With the exception of the tent which wore out and the bike that was stolen, I still use all of the others. I spend a lot of my leisure time now cooking, hiking and camping. I use my bike for both transportation and pleasure. I can play the guitar (not well) and the harmonica (not well at all). Some of those purchases were cash, others were on credit. But they have all contributed to the richness of my life for that last 30+ years and they will likely continue to do so when I retire.

On the other hand, I also spent most of the rest of my life doing work that I would have done for free. But I think that was a luxury most people don’t have. Getting to the point where you can choose a job solely based on how life-fulfilling it is usually has to wait for retirement.

But it’s over-optimistic to assume anyone will be able to do that. It really scare me how many people say “I like what I do, I don’t want to stop, so I’m not going to save so much.”

People get sicker as they get older. Their parents become dependent, their spouses may become dependents needing full-time medical care. A job you love at a hale and hearty 50 may be a horrible burden at 62 and probably will be by 70 or 75 – eyesight fades, stamina fades, arthritis kicks in.

While you’re suggestions may not be the right answer for everyone (e.g. relocating), I commend you for sharing your perspective. After all, gaining and applying useful knowledge is the key to future success.

I agree that those who have more to gain by refusing to pay back the social security trust are the biggest proponents of this “social security won’t be around.” Telling people to take social security out of the equation makes the number needed to live after one is no longer able to work completely overwhelming. Stories about the death of social security don’t inspire most people to save – they make them want to throw up their hands and give up.

And despite what all the 20-somethings say in polls, if the government really tried to do away with social security all together there would be a national revolt. Most people, regardless of what they “should” do, NEED that money when they are older. They need it not to find fulfillment or pleasure, but to LIVE. And whatever has to happen to taxes or defense spending or other line items in the federal budget, some sort of social security will be in place.

I know the majority of the readers here intend to be chasing their dreams, living off their investments, working 4 hours a week (or whatever plan you all have in place) by the time they are 40 but that isn’t going to happen for most of the country.

Unless we accept the elderly living en masse in the streets, there will have to be social security. There will likely be higher taxes to fund this on future workers, but I don’t believe we will do away with social security all together.

But in fact that is wrong. Even once the social security trust fund is gone in 30 years, continued revenue is expected to cover at least 75% of the projected benefits. And even that is based on projections that assume US workers wages will continue to represent a declining proportion of any increases in productivity.

The reality is that for many people Social Security is the ONLY reliable leg of the stool. Personal savings are subject to the vagaries of investment decisions and the market. Most people do not have a pension and many don’t even get any employer contributions to a 401k.

The real threat to social security benefits is political. There is a determined effort to gut social security and, as part of their campaign, the people who oppose it have been very successful in portraying the system as insolvent. By making its failure appear inevitable, they hope to achieve that very purpose.

The real problem is not social security, its that the money borrowed from the social security trust fund will have to be paid back, probably from income taxes or borrowing elsewhere. Just as surpluses have been used to reduce income taxes and the deficit over the past decade.

The income tax is one of the few taxes that takes a bigger bite out of the wealthy than it does the middle class. And the wealthy are also the least dependent on Social Security for financial security in their retirement. Most of the nation’s decision makers, talking heads and economists belong to the class of people that has more to lose from paying back the loans from social security than they have to gain from a secure retirement fund.

Most of this article addresses that same audience. For many people their first career was about making money, making money and making money. “Fulfillment” was not part of the formula because with their talents and training they didn’t have the option of a job that was both fulfilling and provided a living. They got their fulfillment from things they did that did not require an economic payback.

For those folks, a majority of Americans I think, retirement has always been about ending un-fulfilling work and having more time for the fulfilling parts of their life. And that really is about having enough money that income is no longer the deciding factor in how time is spent.

The suggestion that people “start a business” seemingly ignores the reality that most small businesses fail. As such, it is an enormously risky investment and an enormous amount of work. It is really a young person’s plan, not one for someone whose ability to work is declining and whose investment time frame is short term. You always wanted to run your own business or you have a hobby you love that you can make some money from? Great! But don’t start a business just to supplement your social security.

Making a location decision based on finances is exactly the kind of “money oriented” decision that is decried earlier in the article. Rather than moving to save money, the question should by where do I want to live and how will I have enough to do that. That may mean moving to a warmer climate and adopting a new set of friends and activities. But, just as likely, it means staying in your current neighborhood with established friendships and close to family.

Moving somewhere for tax advantages is plainly silly. Even on a list of financial considerations, taxes ought to be close to the last item. On a list of what will provide a fulfilling retirement it doesn’t merit more than an asterisk.

The author is right in philosophy. Money is just a tool, not the focus, for having a rich life. But having said that, his specific suggestions head off in the opposite direction. If you want a fulfilling retirement, live a fulfilling life. Then make your retirement more of the same.

A better analogy would be three boxes that you can stack one on top of the other. The more money you put in, the taller the box. When you’re retired you stand on top of the stack of boxes.

If you only put money into your social security box, or employer sponsored box, or self funded box, you only have one box (whether big or small) to stand on. If you have two boxes and one goes away, you still have one box.

Paul