What If You Don’t Plan to Retire? Save Anyhow!

In my last post, I explained why your financial time horizon may be longer than you think, since you may be investing well into your 90s. The discussion was in the context of retirement, but in response to the article, reader kk brought up some excellent points, which I'll summarize thusly:

What if you scrimp and save your whole life and then die in your 50s or 60s (as happened to kk's parents)? Plus, retirement isn't the only financial goal, especially since “retirement” will mean different things to different people.

These are all very important ponderables. In fact, even though I'm the retirement-planning guy at The Motley Fool, I have a confession to make: I don't plan to retire. I think I would be like many of the ex-retirees I've met through the years; I'd find unlimited free time fun for a while, but after a while, I'd get kinda bored.

Here's what Mitch Anthony, author of The New Retirementality, told me a few years back:

Disillusionment rates are sky-high for retirees. According to one survey, 41% say retirement was the most difficult adjustment of their life and most still struggle with the monotony, boredom, lack of purpose, and lack of intellectual stimulation that traditional retirement offers. There is a good reason these retirees are not happy — retirement is an unnatural idea. The concept runs contrary to the preservation of the human spirit.

Reasons to Save
So if I don't plan to retire, why have I been shoveling money in IRAs and 401(k)s ever since I was 25 (and back then, I was just making $20,000 a year as a teacher)? Here are seven reasons why I continue to delay gratification:

  1. I might change my mind. Sure, as a newly minted 40-year-old, I feel like I could work forever. But will I feel the same when I'm in my 60s? I think it's better to save now and plan on working, rather than being a burnt-out 65-year-old with no savings.
  2. I might not have a choice. Many older workers are forced into retirement due to health reasons, others as companies let go of older (and higher-paid) workers to save money. I want to have a big enough nest egg in case I can't work well into my 70s and beyond because my body or my employer won't let me.
  3. I want my wife to be taken care of. If genetics, family history, and personal hygiene matter, I will die in my 70s and my wife will live well into her 90s. (She's quite a catch, so you might want to look her up in about 30 years.) I have mentally earmarked part of our retirement savings to be used to put an addition on any of our children's homes so that my wife can live with them when she can no longer take care of herself, or just doesn't want to live alone. I don't have a lot of expectations for my kids once they're adults; they can grow up to be whatever they want. But they better take care of their mother, and I'll make sure there's enough money to do so.
  4. Take a sabbatical. While I hope to work forever, I can see the value of taking a few months or even a year off once my kids graduate from college. Once my kids have fled the nest, I want to have enough money saved up to take a temporary break.
  5. The 2029 West Virginia cabin fund. Wall Street Journal columnist Jason Zweig, author of Your Money & Your Brain, calls his 401(k) his “June 24, 2034 Villa in Tuscany Fund” because, he told me, “It is ridiculous to expect something like ‘I am going to save for my 401(k)' to motivate a human being.” You need to make your financial goals more concrete. I like Zweig's idea of a vacation home, though I'd prefer mine to be just one state over, rather than an ocean away. My wife and I could easily slip away for a weekend of mountainous reading and writing (although by then computers will communicate with our brains directly through routers implanted in our heads, and information will be simultaneously absorbed and excreted). As for seeing Europe, I'll do that with…
  6. The 2029 international travel fund. One of our biggest financial goals is to be able to take an international vacation once a year. Maybe Zweig will let us stay with him.
  7. The work I want to do decades from now may not pay much, or at all. I could see myself returning to teaching one day, or devoting myself full-time to one cause or another. I want to have enough money saved up so that I can do what I want without a prohibitive drop in our standard of living.

But What About Now?
In her response to my last column, kk brought up a difficult issue: How much do you sacrifice today for a goal decades from now, when you may not even be around to enjoy it? That's a toughie.

I'll start by being the good financial planner and point out that contributing to IRAs, 401(k)s, 403(b)s, and so on do provide advantages today in the form of tax breaks. But that's pretty boring.

The truth is, you have to do a little of both — enjoy today, plan for tomorrow — and the exact balance will change throughout your life. I certainly hope I don't have to wait 20 years to take my next international vacation, but with four kids and a Washington, D.C.-area mortgage, I have other priorities right now.

So much about financial planning is about how you want to spend your time as much as it is about how you spend your money. If you want to retire as soon as possible — I know people who've retired by their early 40s — then you have to do things very differently from someone like me who plans to work forever.

More about...Planning, Retirement

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Gene at www.kitchentablenomics.com
Gene at www.kitchentablenomics.com
11 years ago

I’m a believer. I never planned to retire either, but my job vanished at age 62 in a downsizing. Being financially nearly prepared for retirement provides a lot more choices than I might have otherwise. (But there are some issues, like health plan coverage, that are buggers.) One observation from my previous career, covering personal finance for The Kansas City Star, where we walked about 300 families through money makeovers – You may want to save for financial independence instead of retirement. The processes and numbers are the same, but your mindset is different. You’re setting a date by which… Read more »

Ryan
Ryan
11 years ago

My dad’s brother passed away last week, and his wife had passed away a year earlier. Long story short, my parents had to fly out to Montana and handle his estate. This meant funeral expenses, figuring out if he had a will, cleaning out his house, selling his house, etc. All of this, inheritance notwithstanding, was paid for out of pocket and totaled thousands of dollars.

Just another reason why you need to have money saved when you’re older: You never know when you’ll be called upon to tie up some loose ends!

RicBy30Retireby40 Blog
RicBy30Retireby40 Blog
11 years ago

Ahhhh, a topic most dear to my heart! 🙂 The #1 thing for me is that I want to retire by 40 if I WANT TO, but keep on working at 40 if still still love to work. Nothing is more satisfying than doing something for the pure sake of enjoyment than out of necessity. When I did my MBA part-time, I never had so much fun learning, b/c I never had any pressure to get straight A’s like I did in High School because I already had a job. Hence, like with work, if I were able to save… Read more »

Eli Sarver
Eli Sarver
11 years ago

I recently wrote about an article that said individuals didn’t make a difference in the environment by saving energy personally. I said save energy anyway, since it benefits you directly.

It’s always good to save. Save for retirement, for short term goals, for a down payment on a house, etc. I wish I was more responsible 5-10 years ago, and if there was ever advice I would give it would be to save early and with regularity.

Andrea
Andrea
11 years ago

I even wonder how this is a question in today’s economy. You could lose yor job, get sick, have another Madoff steal it or just see it dwindle in the market. Unlike many retirees, including my husband and some friends, while I plan to retire from my current paid job, I am not retiring from work or life. I have an intensive volunteer life in which I have always been the short term worker bee- because with kids(now grown) and a full time job and a commute there wasn’t enough time. I will now be able to have the time… Read more »

David
David
11 years ago

Working as a nurse I’ve seen how suddenly and unexpectedly sickness can crop up on people. Sure, insurance may (or may not) pay for the treatment itself, but some sicknesses can mean a person will be unable to work for months or even years. At best this might take a family from two incomes down to a single income; at worst it will leave a family with no income at all. Even for a formally two-income family, the other spouse may have to give up alot of working hours to help care for the other one. This can happen to… Read more »

RicBy30Retireby40 Blog
RicBy30Retireby40 Blog
11 years ago

Retire on your terms, not on the terms of your company or some exogenous whacked out variable!

Andrea, 35 years in your field is more than enough! 20 years is darn enough, that’s why retiring at age 42 should be an option for all.

Rgds,

RB

Tyler
Tyler
11 years ago

Planning to work forever is certainly lifts a lot of burden from the task of retirement planning, however, unless you’re one of the few that loves every aspect of their job, that could be quite the agonizing proposition. My plan is similar to that of RB (comment #3). I want to, while I’m still “young,” be able to take a step back from life, reassess, and be fully financially able to switch careers with little or no regard for money if I choose without changing my lifestyle. This is why I started early and continue to save with fervor for… Read more »

TosaJen
TosaJen
11 years ago

We’ve been aiming at financial independence (FI) for 10 years or so. I think FI has always been a more tangible goal than retirement.

We’re frankly pretty comfortable despite the recession. Even with the ongoing concern of losing our single paycheck, we sleep at night, because of our savings cache.

ldk
ldk
11 years ago

There are few circumstances in life(I can’t think of any!) that having money set aside hinders…money almost always buys you options and peace of mind, and that might be a much more worthwhile goal than ‘retirement.’

KC
KC
11 years ago

Many of the people in my family have lived to ripe old ages – well past the time when they could work. Depending on the job it may not be possible to work past 75 or 80. We hear all the time about people working into their late 70s, 80s and sometimes 90s, but that is not the norm. Look at your family history – if they drop dead of cancer or heart disease in their 60s than live it up and spend the money now. But if they live consistently into their 90s and you are in great health… Read more »

Paul in cAshburn
Paul in cAshburn
11 years ago

I save out of fear. It is a fear I know, because I was laid off in 2001 and I know what it’s like to go for months without knowing when (if!) you’ll work again. Ok, my presentation is a little melodramatic, but don’t criticize until you’ve walked that path. Scenario: It’s 2023 and I just became eligible for social security of $1,110 per month – taxed down to $962. My health has deteriorated to the point where I cannot take a manual labor job that has me on my feet all day, and the economy is (once again) in… Read more »

eleni
eleni
11 years ago

with our youngest, a senior in college playing Div. 1 baseball, my husband and I decided we’d put “saving for financial independence” on the back burner to attend all his games next season. We simply realized this may be it to enjoy his baseball. Last season my husband missed nearly all the games. He missed tough season losses, a miraculous conference tournament championship and an NCAA bid for post season play!! It was awesome! (I was there!) This is where one remembers “why are we here anyway?” My Uncle who died at 50, not only left behind a very young… Read more »

Laura in Atlanta
Laura in Atlanta
11 years ago

” . . . (although by then computers will communicate with our brains directly through routers implanted in our heads, and information will be simultaneously absorbed and excreted)”

Hee hee.

I love this idea . . .instead of saving for something as generic as “retirement” to instead put a face of something on your dreams. Solid plan!

E
E
11 years ago

Thanks for this excellent post. I always say it’s better to have it and not need it than need it and not have it. I expect to live to be at least 90 though I expect I could beat 100 if I’m particularly unlucky. While I would like to keep working till I drop dead, I can’t count on it. For one, I might not be able to; I might get sick or disabled. For another, while I don’t mind working I don’t want to be dependent on a paycheck. I would like to be able to work fewer hours,… Read more »

Dave
Dave
11 years ago

“How much do you sacrifice today for a goal decades from now, when you may not even be around to enjoy it?” That question is kind of like Pascal’s wager. You remember, the one where it is better to believe in God because you have more to lose if you don’t. In this case, it is better to plan on living a long life. If you do live to be 100, you will have the money to live in comfort and have some determination over your life, rather than the State. If you die the day after you retire, have… Read more »

Shara
Shara
11 years ago

I have been thinking a lot about this lately, not just in the context of money but also in the context of time. There are lots of things that I’ve been meaning to do “someday” and someday hasn’t come for most of them. Sometimes you have to make a point to be more conscious about how you spend your time or your money. Regarding both the best thing to do is set up a system that is as efficient as possible. With money that might be bringing your lunch, clipping coupons, or just making sure you have a frugal mindset.… Read more »

Richby30Retireby40 Blog
Richby30Retireby40 Blog
11 years ago

65 is a made up retirement age. Why is it not 45, 50, or 55?

What if you try and save for 35 years, and suddenly you die at 57? Farah Facet and MJ died in their 50’s…. what’s the point. Life wins, you lose.

Work hard while young, and retire on your own terms.

Rgds,

RB

funkright
funkright
10 years ago

Paul in cAshburn, living out of fear is a sad place to work from. I did it for many years and I refuse to go back there again. It is not a happy place to live from or live into. We need to plan for the best, because planning for the worst begets exactly what you’re expecting. Good luck on your journey.

Jane
Jane
10 years ago

I’m with Paul on this one. The above scenario is highly likely.
My husband is the only person left in his office right now. We do not know from one week to the next when/if we will lose our single pay check. After 20yrs of constant corporate restructuring and the uncertainty that that brings, we have learned that you have to be able to roll with the punches. We long for a more secure position, but are fully aware that the only people who can provide that are us. That is why we save.

Rich
Rich
10 years ago

I have to add emphasis to eleni’s comment about balance being a key to a happy life…no matter what age you eventually attain. Another is doing something you are passionate about. Remember that old adage that says, “If you love what you do for a living, you’ll never work a day in your life.” If you stop loving it and are just chasing the paycheck, it’s time for a change. Given the current market, you may have to look quite a while longer – but by all means, start looking. I am 66, working ~ 50 hours each week –… Read more »

frugalscholar
frugalscholar
10 years ago

Truly, I think the stress relief provided by a healthy stash of savings more than offsets whatever goodies you may give up or defer.

Example: while we have never deferred a vacation, we generally try to travel the frugal way–not in the best hotels, picnics over restaurants, etc.

Hilde
Hilde
10 years ago

In Germany we have to retire at the age of 65. Now with people living well into their late eighties, the government plans to gradually move the retirement age to 67, and this almost caused a revolution! The actual retirement age is about 57, which means people worked for maybe 30 years and expect to get a pension from the government for 30 years, too. The idea of saving for your retirement is not very popular around here.

Moneymonk
Moneymonk
10 years ago

“Take a sabbatical”

That’s why I save

Bear
Bear
10 years ago

Great post! I’m in the #6 and 7 category. At 48 I’m officially leaving work next year to travel around the world on my motorcycle. I am able to do that because of diligent savings and investing (particularly with MF advice!). I expect that to be a 3 to 5 year adventure. When I come back I plan to move into #7 and do that as long as I’m able. I should note I had a fire in 2000 and lost everything. As a result of that experience when I started to rebuild my life I did so with a… Read more »

Linear Girl
Linear Girl
10 years ago

To me all savings are about having options. I avoid debt, too, because servicing debt limits my options. I try to navigate a well-lived life on the assumption that I hope to keep this life as long as possible. All my savings and spending contribute to this in some way. If I can avoid misery, now or later, I do. Spending my life now doing something I hate with the only pay-off being an uncertain retirement (which come to think of it sounds a lot like the Presbyterianism in which I was raised) would be miserable. Spending all my money… Read more »

Paul in cAshburn
Paul in cAshburn
10 years ago

@funkright #19:
Don’t worry, I’m not all about fear, my post was dramatic to make a point about how future inflation is a big danger to all savers (but perversely rewards spenders). I strive for moderation because you never know when it’s your last day… but I will err on the side of caution until I see how our national spending binge turns out. We’ll talk in 2023. 🙂

Rick Arvielo
Rick Arvielo
10 years ago

Thanks for the information
I’ve came out of retirement a few times so I can relate to your first point

trb
trb
10 years ago

Jane (20) “We long for a more secure position, but are fully aware that the only people who can provide that are us.
Linear Girl (26) “If I can avoid misery, now or later, I do.”

Love it. I shall continue to save, to avoid future misery and provide for my future security. I shall continue to spend, in moderation, to avoid current misery and provide for my current happiness. Thus, I have both the mortgage currently and the “mountainside shack fund 2034” cd ladder.

A. Smith
A. Smith
10 years ago

I’m 37, and plan to semi-retire in my early 50’s. My mortgage should be paid off by then, and my retirement savings built up. I currently work in the corporate world, but my type of work translates well to freelancing. I plan to go out on my own as a freelancer, working about 20 hrs a week. The part-time income will be the financial bridge that carries my husband and I into our 60’s, when our government pensions and his private pension kick in. Will I keep working past that point? Beats me! But I’ll have the choice – if… Read more »

Leslie
Leslie
10 years ago

Having Savings = Having Choices.

That is why I save.

Kevin@OutOfYourRut
10 years ago

In the current financial “culture”, it seems to be all about retirement, tax savings, estate planning, etc, but I have to agree that the real purpose of saving, retirement or otherwise, is to expand options later in life, even if we aren’t sure what those options might be just yet. Might sound kind of spacey, but we have to give a wide berth to the force known as Life, that can take us in unexpected directions. But on that note it’s worth bringing into the picture the other half of retirement planning, which is expense management. For most people, the… Read more »

Mike C
Mike C
10 years ago

The way I figure it, Global Warming will turn the Earth into an inferno that no one will survive. So retire young.
Also, there is a chance an Asteroid will hit in 2037. There goes my chance a Social Security.So I need to retire young.

Sandy E.
Sandy E.
10 years ago

@A. Smith: you are on the right track. With your mortgage paid off when you retire, you can live rent-free. Your retirement savings will go a lot further.

I don’t understand the people who say they don’t know what they would do with themselves all day either. My experience is that people instead say: “When did I find the time to work???”

It’s important to save because everyone deserves to retire in comfort and dignity. You don’t want to continue working longer than you are physically able.

Richby30Retireby40 Blog
Richby30Retireby40 Blog
10 years ago

MiKe C – Retire young, retire rich. Nobody on their death bed wished they could work more.

Rgds,

RB

Rich
Rich
10 years ago

Richby30… makes my point. If you love what you do for a living, you don’t want to stop.

That in no way means life should be unbalanced. If you work 60,70 or 80 hours each week, you really need a life! That’s not love; that’s compulsion.

TheRoadtoMeaning
TheRoadtoMeaning
10 years ago

I believe that it is crucial to save for at least a goal, if not retirement. Having money creates options for yourself. If everything works out well and you are able to work at a job that you love for as long as you want, perfect. Use some of the extra money to treat yourself, or do some donating to charities you are passionate about.

Todd R. Tresidder
Todd R. Tresidder
10 years ago

Robert has it right when he says it is just as much about how you want to spend your time as how you want to spend your money. After retiring at 35 (13 years ago) his points about balancing enjoying life now and later are dead on. Where Robert runs a bit astray from reality is his position on saving now. It could be due to his age or financial needs with current mortgage and 4 kids, but the real compelling vision is freedom to live our life unencumbered by financial issues. Life is too short to spend working all… Read more »

TheRoadtoMeaning
TheRoadtoMeaning
10 years ago

I believe that it is crucial to save for at least a goal, if not retirement. Having money creates options for yourself. If everything works out well and you are able to work at a job that you love for as long as you want, perfect. Use some of the extra money to treat yourself, or do some donating to charities you are passionate about.
Sorry… forgot to say great post – can’t wait to read your next one!

Ruth Stroup
Ruth Stroup
10 years ago

Robert, Great post, made me think about all the “money messages” we get around the topic of retirement. My dad lived the “don’t retire, don’t wait” life and he started traveling and exploring his curiosity in his 40’s and never stopped. As one of his 5 children, he took me to some amazing places and shared his experiences with me. My older siblings unfortunately have stronger memories of the missed little league games. Owning a business was one of the things that made my dad’s choices possible. Not much talk about that mentioned here. For those who don’t plan to… Read more »

Chickybeth
Chickybeth
10 years ago

This was a fabulous post. I think #3 was the most romantic thing I have ever read, and #s5 & 6 are what it is all about for me. Thanks for posting and making me smile 🙂

Charley
Charley
10 years ago

Love Ruth’s comments (#40). My life parallels much of your description. Stoopit and broke in my 20’s to debt free and owning my home outright by 36. I have enough of an emergency fund for my family of five to live off of for a year, and about $800 a month residual income from investment properties. I am at the stage now where I am not sure I want to retire. I would much rather get paid for doing what I love…writing, and songwriting/performance. That’s why I have been diligent about paying off my debt including my home and building… Read more »

Kevin@OutOfYourRut
10 years ago

Todd (#38) & Ruth (#40)–You’re both on to something here. I’m going to get beat up for saying this, but a lot of the obsession with saving for retirement in particular, is as “insurance” against an unsatifying life/career or a job that is so dreary that we dream of the day we can walk away. Having a compelling career, one you enjoy so much that it isn’t like work, and not drudgery in any way, largely eliminates the need to salt every last penny away toward Career Independence Day. We should save for retirement, if for no other reason than… Read more »

Tim
Tim
10 years ago

I really like this approach, because the purpose behind saving money is to spend it. Who does nothing in retirement? seriously, you are going to spend the money, so having financial goals for the span of your lifetime is a good way to plan your savings.

Anne
Anne
10 years ago

Thank you Robert! Finally! A finance writer who doesn’t think the worst sin in the world is to end up living with your kids. I love that you have built in a provision for your wife to live with your children if you should pass first (and she no longer wants to, or can, live alone). I have been so disappointed, no, completely aggravated, to constantly read in financial magazines, etc. that, “The last thing you want is to have to depend on your kids!” That philosophy has only cropped up in maybe the last 30 years. Thousands of years… Read more »

Dallon Christensen
Dallon Christensen
10 years ago

I talked about this post with my wife. The key is to have the financial independence to work when I WANT to work, how I WANT to work, and with whom I WANT to work. By the time I reach retirement age, I do not want to be in a situation to need to work in the traditional sense. My long-term vision for “retirement” planning is to use any income I have from part-time working (hopefully university teaching, a little consulting, and some board work) to cover the fun events like vacations, college football trips, and conferences. The 401K and… Read more »

DDFD at DivorcedDadFrugalDad
DDFD at DivorcedDadFrugalDad
10 years ago

Great advice. The choice of not retiring might not be yours– health as you rightly pointed out.

Susanne
Susanne
10 years ago

Thank you for mentioning/ promoting West Virginia. It is such a wonderful, peaceful home.

Problem Solved
Problem Solved
8 years ago

I have been wondering about this for a long time, but I thought that I must be forgetting something. Surprisingly, this article has convinced me that I really DO NOT need to bother saving for retirement. What do you think? Point by point: 1. What can I say about this? I don’t think I will change my mind. People kind of expect to see old professors. 2. I’m a tenured professor at a state university in a warm southern state with a salary of almost $150k/year. I have a FUN part time business that I love that makes about $50k/year… Read more »

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