Top 5 reasons to never?retire
It’s time for business owners to stop planning to retire and start thinking of work as a normal and important part of aging. Why? Because of your health, happiness, wealth, and life expectancy depend on making this shift.
As a wealth advisor, I specialize in working with business owners. Over 25+ years, I have seen more than my fair share of disastrous retirements. Too often, successful business owners exit their business only to be dreadfully miserable while sitting on the beach at a five-star hotel in Bali.
Meanwhile, more and more of my clients who start out with plans to retire are hesitant to do so when they arrive at the seemingly magical age of 65, so they just keep on running their businesses. For many of them, what was initially a plan to “put off” retiring has blossomed into a plan to keep working until further notice. More importantly, they report being happier and healthier than ever.
This trend isn’t really a surprise. Baby boomers have reinvented the way we live and work at every stage of their lives — why would retirement be any different?
The bottom line on retirement is that you should do what’s right for you.
If exiting your business and becoming a full-time leisure expert is the right thing for you — go for it. You earned it. And you aren’t alone. Every advocate of the FIRE movement (Financial Independence Retire Early) is with you. In fact, many of them are focused on retiring in their early 40s.
But if you are like me, you may be cut from the same cloth as some of the world’s role models of Never Retire. Consider a few high-profile examples: 89-year-old Warren Buffet, who is a public advocate of never retiring, or politician Bernie Sanders who is running for President at age 78, or Canadian author and icon Margaret Atwood who just put out one of the most anticipated novels of her career at age 79.
If you are like these folks, continuing to work as long as you want is not only a possibility — it’s a necessity.
Here are five reasons to Never Retire.
1.) Work provides meaning and purpose (which are essential for health and happiness)
All these years, you have bolted out of bed in the morning to build your business. It’s a way of living and working that suits you. And even when it wasn’t going well, or things were busier than you would have liked, you were fuelled by the core purpose of building the business.
Meaning and purpose are among the most important determinants of happiness and health. Our lives are simply better when we have a reason for being.
For some people, the activities typically associated with retirement can offer purpose, be it volunteering, pursuing a hobby, traveling or working on your golf handicap. But is that what purpose means to you?
In my experience, business owners find purpose in owning a business. Why would you want to live your later years without doing what has made you happy at this point? If you retire, you are walking away from your purpose.
2.) You can delegate work you aren’t passionate about — or even good at
If you have reached the point in your business where you are thinking about retiring, I am guessing your business is established enough that you can run it any way you like. That means you can read this article and get up tomorrow with a single purpose: restructure the operation so you can run the business and pursue everything on your bucket list.
Start by allocating anything you are not good at or passionate about to a competent and loyal team member who is.
In my wealth planning and investment practice, I have built an exceptional team who have the skills, interest, and capacity to run the day-to-day operations of the business on their own. None of us do anything we are not good at. And, more importantly, if I want to take off to Italy to cycle for two weeks, I can.
Like me, you can change your business so that you spend most of your time doing the tasks you enjoy. How could it possibly make sense to walk away from that?
Don’t get caught thinking of retirement as an all-or-nothing proposition. Think about how you can make incremental changes in the way you work until you reach an ideal balance between work and play.
3.) Continuing on your path to stay rich
Having advised many, many retired couples over the years, I can share a few insights about the financial side of retirement.
First, you stop earning money from sources other than your investments, which means the rate of growth of your investments drops off.
Second, you get very risk-averse about how you invest because you are dependent on your investments. As a result, retired people tend to earn a low rate of return on their money.
Third, those limitations on your approach to investing lead to cautious spending. Far from “living it up” in retirement, most of the folks I know are living cautious lives relative to what they could afford. (I have seen this last effect up close with my aging parents. They are reluctant to spend money because they don’t know if they will have enough. I am convinced that this perpetual worry is limiting their happiness and accelerating their aging.)
Let’s look at a specific example of retirement savings.
According to www.worldlifeexpectancy.com, the 2018 life expectancy in Canada for a male is 80.9 and 84.7 for females. If a couple retires at age 65, they must plan to afford for the woman to live until approximately 85 years of age. That’s a 20-year retirement. As a financial planner, I typically advise people to plan on living until 90.
To generate an income of $100,000 (pre-tax) during those 25 years, assuming inflation of 2% and a return on investments of 5%, the couple would need approximately $1.75M in investments when they start their retirement. And that’s assuming they don’t face a drop in returns on their investments or live until they are 100. *
Think about the savings that had to happen to make this amount possible? And compare that to how a couple might live their lives — and their golden years — if they knew their income stream could carry on well into their 70s. Different story, right?
4.) Working — and knowing you will continue to work — helps you live in the moment
By constantly worrying about saving and investing for retirement, so many of us aren’t able to live in the present moment. We delay experiences to a time in the future when it will be “all recreation all the time.” While some of us end up in the unfortunate situation of not making it to retirement age at all, most of us miss out on experiences along the way because we are saving for a future life.
I often tell my kids I wish I could relive my youth. I would stay out late. I would travel the world. I would try things that interest me. I would follow my passions. And while I know I can’t turn back the clock, I can do something else — live fully now.
Figuring out how to live in the moment is a way to enjoy what life has to offer. And you can do it while working because your business provides you with an ongoing source of income and flexibility to maximize life’s pleasures. Not to mention that for those of us who love running our own business, one of life’s great pleasures is running our business.
5.) It’s one of the best decisions you will ever make
My interest in this topic isn’t exclusively professional. I am approaching the conventional retirement age myself, which means I am inundated with questions from friends and family about my retirement plans.
For several months, I was growing increasingly irritated by the questions. So much so that I started doing research into the subject and talking to clients and friends. After months of research and deliberation, I reached a point of total clarity about what I wanted to do: Retire? Never.
It felt amazing. It was also the inspiration for the newly developed Never Retire philosophy that is shaping my practice.
Now, rather than being suffocated by dread about the coming void in my life, I am more energized than ever. I plan constantly about building my business, organizing my practice to create flexibility for myself, and creating remarkable experiences with my wife and family.
It’s an incredible sensation. And it can happen for you if you revisit your thinking about work, aging, happiness, health, and work.
Does thinking about never retiring resonate with you? What did I miss? Send me a note and let’s start the conversation.
Call or email me at [email protected] to map out how you can Never Retire, or connect with us in the following ways:
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- Originally published at https://richarddri.ca on October 3, 2019.