So we just need to stop calling it a retirement plan. In fact, I hate that term, but that’s the term that the industry uses. And that’s the term that’s most familiar with people, but I’ll tell you why we shouldn’t call it a retirement plan… because it’s depressing. That’s why. For many people, the thought of retirement is one of happiness and joy and full possibilities. But, for one in three Americans in this stage of life, according to the WebMD article “The Emotional Shock of Retirement” feel depressed, sad and anxious.
And it’s no wonder, if you think of the definition of the word “retire” which means to retreat or to withdraw. And, so if you think about retirement as withdrawing from active work, withdrawing from society, and retreating from the things that you used to do… yeah, that sounds depressing!
Those are not very positive thoughts, nor are they invigorating, going into something that’s going to last potentially 30 years of your life. And it’s funny because when you’re in your twenties and we do a financial plan… we don’t call it “a young person’s plan or a beginner plan.”0 When you’re in your thirties and your forties, we don’t call it “a working towards the prime of your life plan.”
And when we reach our fifties, we don’t call it “a peak earning years plan.” But, all of a sudden we hit our sixties and we call it a retirement plan. Something that may last through our 60s, 70s, 80s, 90s, and potentially early 100’s. We may be 30, 40, or 50 years into what people call retirement. And we know that the way that a person feels, and acts, and the goals they have in their 60s are different than those of their 70s, or 80s, or 90s an beyond. So to call it a retirement plan and lump everything into one depressing, old age sounding term, to me, is a big mistake. So, let’s stop calling a retirement plan. Because everyone’s retirement years look different.
Why don’t we just call it a continuation of your financial plan? Right? So, it’s different goals, or modified goals, just like the goals at every other period in your life were different or you modified. But it’s still a comprehensive financial plan. If we could borrow a movie title from Star Wars, I think it would be one that signifies a new chapter in our life… so, I guest that would be Star Wars Chapter IV: A New Hope.
It’s the chance to do things throughout those decades that you didn’t get to do while you’re working full time in your career. It may be going back to college. It may be starting a new business. It may be spending more time with family and grandkids. It may be traveling much more frequently. It may mean a lot of different things to you, but it doesn’t have to mean retreating, or withdrawing from society. Because the concept of retirement is different for so many people, I just wanted to give you an idea of what things look like, and how your goals may change:
- When you’re working, you’re looking at your income from your career and in retirement, you’re looking at income from your Social Security and your investments.
- During your working years, you may have purchased a home. In your retirement years, you may be looking at purchasing a house, but it may be a vacation home or it may be downsizing to a different home since you don’t need as much space anymore. Or it may be helping your kids buy a home.
- It may be from college planning for your kids to college planning for yourself or your grandkids.
- It could be things like risk management. Whereas when you were working, it was risk management to make sure you had disability insurance in case you got hurt and weren’t able to earn an income from your primary career. But in retirement, it’s long term care insurance, which will take care of you should you need help and assistance as you get older.
Retirement years are different as you go through the decades. Just as different as each of the years and decades before what we call retirement.
And so, I would prefer if we simply called it a financial plan. A comprehensive financial plan that carried you from the time you’re in your twenties to your eighties, nineties and beyond. It just makes more sense to me.
So please stop calling it a ‘retirement plan’ and start calling it for what it really is… a comprehensive, lifetime financial plan.