Retirement lessons from a Millennial
What a 25-year-old can teach us about living - and enjoying - life
Good morning!
I’ve joked with clients over the years that everyone can retire as soon as they want.
In fact, you can retire right now. Today!
Why wait?
However, with the average American 54-year-old only having around $71,000 in savings, their achievable retirement might not quite meet their needs (or their wants).
According to this CNBC article, 37% of middle class Americans believe they’ll work until they’re too sick or until they die.
If you enjoy your work and it’s not too physically demanding, maybe this isn’t the worst thing in the world.
But I suspect that many people don’t find their work as enjoyable as I do.
Many of my financial planning conversations revolve around retirement which probably comes as no surprise.
And while the definition of retirement can vary greatly from one person to the next, I’ve seen a gradual shift over my 30 year career of what “retirement” is generally understood to mean to most folks.
These days, with our hectic schedules and responsibilities, more and more people look forward to having more time and freedom to do what they want. When they want.
And of course, many most of these things will require money.
Though there’s quite a lot of fun and interesting things to do and see that’s inexpensive or free.
I’m not diminishing the importance and value of being financially prepared for the future. It’s the foundation of my work.
But after reading this interesting piece in the New York Times from a few years ago, I think it calls for a deeper exploration of what retirement is, and perhaps more important, when and how retirement happens.
Retire Like A Millennial
The article is by Jim Sollisch about his son, Max, a 25-year-old singer, songwriter.
In the article, the author comments that Max gets out of bed when he wants most days and spends his time doing something he loves – writing and playing music.
But Max isn’t relying on his parents for support.
When he needs more money, he supplements his music income by taking on some substitute teaching gigs.
I don’t know Max or his Dad, Jim, but Max sounds like he has a pretty happy and fulfilling life. Doing what he wants, when he wants…
Jim, the author, goes on to compare his son’s version of success with how success is typically measured.
The bottom line is that while Jim and his 62-year-old hospital administrator buddy, Dale, are busting their butts to rush from one meeting to the next or they’re juggling multiple project deadlines all while trying to have a life outside of work, they get some comfort from the fact that they’re making and saving a good amount of money for the future.
But what about their lives today?
What the NYT article is really challenging us with, in my opinion, is to determine which is the better measure of success?
More and more, I’m convinced that Max, the 25-year-old is on the right path.
Sure, he may never have the financial cushion that his Dad has worked so hard for, but he seems to be making the most of his journey.
Avoid Regrets
Who will have more regrets on their deathbed? Max, Jim or Dale?
I don’t know, but the research tells us time and time again that no one ever wished in their final hours that they’d spent more time at work.
In fact, it’s quite the opposite.
According to this August 2013 article, the #1 regret of the dying is “I wish I’d had the courage to live a life true to myself, not the life others expected of me.”
The #2 regret?
“I wish I hadn’t worked so hard.”
So maybe if we’re willing to adjust our view on retirement - and life - just a bit, we can start to downshift our lives and better enjoy each day of our personal journey.
Certainly, there will be some expected trade-offs that might impact our lifestyle, but the real benefit is that you’ll have more time to enjoy your one and only shot at life.
Remember, tomorrow isn’t promised.
It’s tragic to hear about someone planning to really live it up once they’re retired, only to have their lifestyle - or their actual life - cut short before they actually get a chance to enjoy life outside of full-time work.
Maybe you’ll have to continue to work part-time or even full-time, but what if you could trade in your 60-hour-per-week grind for a 40-hour-per-week job that you can leave at at the office when you’re not there?
And if you have an opportunity to earn a living doing something you enjoy or find rewarding, all the better.
So many women I meet are on track for what I call “a deferred life plan.”
They’re working as fast and as hard as they can while hoping and praying they can make it to age 60 or 65 to really start enjoying their lives. And their hard-earned wealth.
My question to you . . . why not “retire” right now?
Remember, this ain’t a dress rehearsal.
You only get one shot to make the most of your life.
If you’d like to explore a different type of retirement and see how you might be able to retire sooner and get on with living, I’d love to have that conversation with you.
You can reach me here, and I’d love to hear from you.
Learn more about our Retirement Planning services.
Links & Things
Just last week I shared some research about the risks of individual stocks:
However, please don’t assume that mutual funds or ETFs are a fool-proof “set it and forget it” solution either.
Rather, maybe if more investors took a “set it and forget it” approach to investing, they’d have better results than what’s outlined in this recent Morningstar report:
Here’s the opening paragraph:
We estimate that the average dollar invested in US mutual funds and exchange-traded funds earned 6.3% per year over the 10 years ended Dec. 31, 2023. That is approximately 1.1% per year less than the average fund's total return over the same period assuming an initial lump-sum purchase. The 1.1% "gap" is explained by the timing of investors' purchases and sales of fund shares.
In other words, the average investor did worse than the funds they own due to their attempts to outsmart the market through buying and selling.
Better to buy the whole haystack and don’t sell until you need the money.
Any additional thoughts? Suggestions? Feedback?
Hit reply or leave a comment and share what’s on your mind…
Until next Wednesday,
Russ