A New Way of Thinking About Retirement: Financial Independence

October 22, 2019

ARCHIVED BLOG, PLEASE NOTE:  The information below was posted prior to any affiliation with LPL Financial and is posted here for historical purposes only

Many of us were raised to think that retirement was the ultimate goal at the end of our careers. Put your head down, get to work, put in your time, and eventually you can retire. Is that really what you want to be working towards? Struggling through decades of work so you can enjoy your time when you’re 70 years old? I’m going to challenge your thinking today on why retirement shouldn’t be the goal and why Financial Independence might be the answer you are looking for.

When you think of your parents’ or grandparents’ retirements, what comes to mind? Spending time on the golf course? Working in the flower beds? Traveling? Those might sound like things you would love to spend more time doing.

Now picture yourself 6 months into retirement. Maybe you’re heading back to the same golf course to meet the same couple of friends to share the exact same stories for the 10th time this month. Maybe you’ve caught up on all your projects around the house and just came back from the trip you’ve been waiting years to enjoy. However, now you realize you have a whole year before you go on another trip. How are you going to spend the next 12 months?

For many of my clients working at the University of Michigan, these images suddenly don’t sound so appealing. They have been spending decades living purpose driven lives: caring for sick kids, searching for cures to cancer, educating the next generation.

It’s time to change our mindset from Retirement to becoming Financially Independent. What does that mean? Financial Independence means reaching a point in your life where you have the financial means to retire at a moment’s notice. You continue working because you love your work not because you must work. If or when that changes, you can leave on your own terms.

Once you decide to take the leap and step away from your full-time job, I encourage you to find a way to continue your purpose driven life throughout retirement. This can mean a lot of different things to a lot of different people. You might choose to spend time helping raise your grandkids. You might find yourself with the opportunity to increase your involvement in philanthropies you’ve always supported. You might even find ways to work part time as a consultant in your previous field. I can’t tell you what your purpose is going to be, but I can encourage you to think about what it will be before you retire.

After you’ve achieved the freedom of Financial Independence, spend some time writing down a list of things you would like to pursue in retirement. Then, you can take a subjective look at whether those things are more important to you than continuing in your career. You can refer to this list every year until you decide to take the leap into retirement.

I hope this concept helps you to see your future goal of retirement in a new light. Maybe retirement isn’t the goal for you after all. Maybe Financial Independence can be your new end in mind.  

If you are interested in learning more about how to develop a plan to become Financially Independent, please reach out to me at emily@university-wealth.com.

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