People who want to live a long, productive life should focus on the life they want after they retire when designing their life goals. I have heard it said that “we do not retire from something, but unto something.” There is an actuarial study floating around the internet that presumes if you retire at 55, you will have a higher probability of living until you are 80 than if you retire at 65. If retiring early has a positive correlation with longevity, then why do we not strive to retire as soon as possible? How about at age 45?

What is hindering us from retiring early?
I often hear from clients that they don’t want to retire early because they believe they’d get bored or they’re not yet finished working yet. These comments made me wonder how people view retirement. When I ask clients about their goals for retirement, many answer similarly: increase travel, catch up on deferred maintenance around the house, spend time playing golf or hiking, and more time with loved ones. Are those goals specifically designated for retirement? Of course not. The number one response I get is a fear of becoming idle—people want to continue working on projects, give back to their community through volunteering or other means, and for some, continue to work part‐time. No one wants to stop contributing. Well, doesn’t working count as contributing?

The mantra that our lives are split into working years and leisure years is outdated. Many people plan to become even more productive when they retire and have more free time. The root of the word ‘retire’ is ‘retreat.’ It’s no surprise that people are wary of retiring early.

There is continuity in the goals that we have for retirement and what is important to many of us who are still working today—family, friends, work, health, possibly travel, etc. If our goals flow from our identity and they are transcendent of retirement, we will continue to spend time with loved ones, enjoy leisure and work…

Then what’s the difference?
The difference resides in financial independence—the freedom to choose what you want to do, rather than what you have to do in order to make money. Financial independence doesn’t come with a certain age or date, and when you become financially independent you don’t have to stop working. What you do gain is more freedom in designing your life according to your goals.

If you want to set the best goals for this year and for your life, you should look to the life you want after you become financially independent for guidance. After all, the longer the term perspective, the better financial and life decisions we will make today. Each major life choice can now be made by asking yourself, “Does this bring me closer to financial freedom, or does it take me further away?” This will dictate how much you save, what debt you decide to carry, and what goals are most important. Let the goals that you have set for retirement be the same for when you are financially independent. And do not retreat.

Any opinions are those of Andrew Donohue and not necessarily those of Raymond James. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss.

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