Retirement Myths

I like watching golf on both the Golf Channel and the main networks over the weekends.  Last weekend’s Masters and Tiger’s win was an inspiring demonstration of perseverance. Financial planners seem to love advertising on such shows – and why not – older men are a key target market for them.  The ads always show happy smiling couples busy enjoying their leisure time. The myth being promoted is that at some time in your future, if you invest with us, you will have enough money to have total time freedom with income to allow you to do all the wonderful things you have dreamed of; travelling, recreation, freedom from going to work.  But it is a myth being perpetrated to get you to invest your money, so that they can make money on your fees. 

There are three other myths portrayed on these commercials; earning stops – you live off your assets and pensions; investments stop – you have to be fully funded when you retire; and life becomes a continuous vacation.  Let’s look at reality.

Today, life expectancy after age 65 is now 20 years.  In the 1930’s when social security was originally set up, life expectancy after 65 was about 7 years.  The ability to save enough during a lifetime to finance 7 years of retirement is vastly different from 20 years.  Add in the fact that most people faced significant investment challenges over the past 10 years and the ability to accumulate the amounts necessary to fund 20 + years of retirement is virtually impossible. Which is why it is estimated (depending upon the survey or research) that 35 to 45% of Boomers have not accumulated enough to retire.  Here is the fact: they couldn’t.  Not that they didn’t want to – but in many circumstances it was fundamentally impossible to do.  Add in a divorce, job loss, investment losses, looking after children and parents and the financial pressures on many Boomers did not allow for savings growth. According to the financial services industry, Boomers face a financial crisis.

I would like to turn the telescope around and look at the situation from a 180 degree different perspective.  I think that the situation is an opportunity and not a crisis.  Here’s why:
  • Life does not end at retirement – it has another 20 to 25 years to go.  Many of those years are active, healthy and offer a tremendous opportunity to be of service to others.  It can be a time of incredible creativity by living the life you were meant to live without the pressures of other responsibilities.
  • Investing doesn’t stop.  Even as a retired individual, you can continue to invest and get returns on your investments.  You don’t need to fund your total retirement now, you can fund it over time. 
  • Earning doesn’t have to stop. In today’s economy there are dozens of ways of earning income to meet the cash flow gap and continue saving for the future.
  • Finally, dreams do not stop. Retirement can be an incredible time to live your dreams – maybe not the way you originally planned, but you can create amazing experiences that give you the fulfillment you need and want.

If we let go of the marketing messages that the investment companies want you to hear, and take some time to step back and really assess what we want and need in retirement, I think we can go from a crisis to an amazing opportunity.  The next few posts will share with you some of the ideas and approaches I am discovering and using in my life.

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