Redefine “Retirement”.

One of the hurdles we face is the concept of retirement, as we know it.  In our Campus Edition series, where we teach people between the ages of 17 and 23, we actually realised it is not an effective term to use.  For many young people they just do not understand that a moment in time will come when they will retire.  After all, that is what old people do.  Even people who are well versed with the concept because they might be older or have seen people retire seem to have a negative connotation with the word retirement. I completely understand why.  The traditional thinking or use of retirement does seem to point to doom and gloom.  Retirement has been associated with a certain age.  In Kenya, and according to the Retirement Benefits Authority the official retirement age is 60.  So for those who are young, it’s sometimes hard to believe that you will get to 60. Many feel there’s nothing they really need to do now about it until maybe the mid –forties.  After all you still have so much time to work.  For those who are approaching 60 or have passed, it is the belief that there is nothing you can do because you have reached official “retirement age”. That you just have to accept your fate as is. Then this “retirement” is approached with a lot of fear. No wonder we don’t plan for it. I even looked up the definition of retirement in several online dictionaries and most descriptions allude to leaving a job or ceasing to work. No surprises there because the word “retire” literally means to sleep, go away or retreat. We need to change our concept of retirement completely.

The mistake anyone who is not close to 60 year old makes is pegging retirement to 60. In other words your investments and savings only need to be working for you when you are 60. You can only consider a change in the way you do things at 60. As you grow older, definitely your energy levels will not be what they were at 25. So you will have to be doing things differently and that is where the planning comes in. You are actually not held hostage to the age of 60.  You can plan your life to be different at 35, 40, 45 etc.  Whatever works for you.  In my experience being told what the retirement age is, has made us lazy in defining what we want and when we want.  The goal just becomes to retire comfortably at 60. Instead of thinking about retirement, can we possibly start defining what we actually want to achieve and experience and when we want to do that? To do that definitely requires money so the next step would be to define how much money you will need and what you are prepared to do about it now i.e. in whatever phase of life that may be.  You maybe 25 and make a decision that by 35, you don’t want have to be in a full time job everyday. You may be 35 and decide that by 45, you want to spend time travelling the world.  You may be 45 and decide by 55 you want to have the freedom to pursue your writing passion only. You may be 55 and decide in the next 7 years you want to do philanthropic work. Your retirement age is up to you. All these are nice milestones to achieve but they require intentional thinking and action now.  You may have different responsibilities at different ages and hence different levels of risk appetite.  In my book, retirement is the point when you move past survival i.e. working to put food on the table.  Your investments are actually providing you with the financial resources to have the life you want. The life you have defined for yourself. You now have the freedom to spend time on activities that have meaning to you without the pressure of meeting day- to day bills. The fact is many people who do “retire” in this country are forced to go back to work to pay bills.  That’s not retirement at all!  That is swopping jobs.

If you do manage to retire before the age of 60 many people actually benefit. By doing this earlier, you will have probably played a part indirectly or directly in creating jobs along the way, you will have made space for people to move up to the positions you no longer wish to have. If more people retire earlier, more investments would have been made, more businesses started, higher incomes earned. It helps the economy.  And just because you are near or passed 60 does not mean you cannot get it.  You may have to do things differently but I have been witness to people turn situations around once they are committed to experiencing the life and freedom you want. You have different resources that a 35 year old does not such as the benefit of vast experience, certain networks etc. So rather than plan for retirement, how about just plan for the life you want to have, no matter what your age is. You may still choose to work because you enjoy it and gives you a sense of fulfillment. Retirement does not mean you will sit in the house and do nothing. I think I will work most of my life, it’s just the nature of the work may change. But you are no longer approaching your job and the official retirement age with a sense of dread because it is a ticking time bomb. Is the retirement planning you hear so much about now worth doing?