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When you hear the phrase “the golden years,” there’s no mistaking the topic. You’re talking about retirement. A time of relaxation and leisure. The crowning achievement of a lifetime of hard work. A time to travel, play golf, take up a hobby, and make time for the grandkids. A time for anything but work.
This concept of retirement as an endless holiday, however, isn’t even as old as today’s retirees. The actual phrase “the golden years” was coined in 1959 in an advertising campaign for America’s first large-scale retirement community. It was a roll of the dice to see whether folks “55 and better” would embrace “an active new way of life,” move away from their families, and buy one of the modest homes on a $2 million golf-resort development in the middle of the Arizona desert.
A Historical Change for Retirees
The campaign was a success. On the first weekend, 100,000 people showed up to tour Sun City’s model homes and see for themselves if a lifestyle free from responsibility and the constraints of working life could actually be possible. For many seniors in the 1950s, retirement was a lonely time of decline. They had the financial support of Social Security, but once they left the workforce, they had little purpose in their lives. Retirees saw themselves as “too old to work, too young to die.” No wonder they grasped with both hands the idea of retirement as essentially a second childhood!
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Sun City’s ads not only launched the nation’s first successful retirement community, it also inspired an entire industry designed to help people achieve their dream retirement. Financial planning for retirement was a key component, and for many years, retirees’ combination of pensions, Social Security income and personal savings was enough to provide them a leisurely retirement lifestyle.
Time for a New Idea
But a lot has changed since then. People no longer work for the same company for 30 years, building up a comfortable pension. We’re also living longer. In 1950, the average retirement lasted just eight years. Today, it can easily last 20 years or more. Not only is it more difficult for retirees to support themselves over two decades of retirement, that’s also a long, long time to “take it easy.”
As a result, our concept of retirement is undergoing another transition. Instead of looking at retirement as a permanent vacation at the end of their working lives, today’s retirees and pre-retirees are starting to see it as a second chance to live their lives the way they’ve always wanted. That vision could include a good bit of travel and leisure, but it also includes work—encore careers where they can finally pursue their passions in a way they never could during their careers.
It’s Not Just About the Money
If this sounds like we’re simply trying to sugarcoat the fact that most people simply can’t afford a traditional retirement, let’s take a look at a recent Merrill Lynch study about the myths and motivations surrounding work in retirement. Here’s what it found:
Money is important, but it’s not the only reason to work in retirement. An equal number of pre-retirees said they plan to work in retirement for the money as those who will work to stay mentally active. Retirees said the mental benefits of work are twice as important as the money.
There are four distinct types of working retirees. Driven Achievers (15%) feel like they’re at the top of their game, and even though most feel financially prepared to retire, they simply don’t want to. Caring Contributors (33%) want to give back to their communities and usually work for a nonprofit or are unpaid volunteers. Life Balancers (24%) keep working mainly to maintain social connections—but the money is a big help. Only about 28% of retirees are Earnest Earners who work primarily to pay the bills.
Career ambitions aren’t just for young people. Almost 60% of retirees said retirement is their chance to pursue a different type of work where they can follow their passions, enjoy a flexible schedule, avoid stress, and experience new things. Working retirees are also three times more likely than pre-retirees to own their own business or be self-employed.
Dream Big and Stay Motivated
Dave has always encouraged folks to think more about what they will do in retirement instead of what they won’t do. The goal of building wealth for retirement isn’t to park yourself in front of the television or fritter away your days on the golf course. The goal is to find your passion and lead an active, purposeful retirement regardless of whether you’re paid for your work or not.
If you ever lose sight of why you sacrifice month after month for a goal that’s decades away, simply take a moment to picture what your life in retirement can be like. It’s your second chance to live life on your terms, fulfilling your lifelong dreams.
Now’s the time to make sure you’re on track to reach your retirement savings goals. If you’re off course or if you’re not sure, consult an investing professional who can help you determine where you stand and what steps you need to take to have the retirement you’ve envisioned. If you’re looking for an experienced advisor with the heart of a teacher, we can put you in touch with an investing pro Dave recommends in your area today.