(Guest Post by Maria, the 50 y/o blogger behind The Money Principle. She’ll be talking a little about ‘pensions’ here in a bit, but keep in mind she’s a resident of the UK where these types of ‘pensions’ she refers to are more like our Social Security… At least from what I can gather. Regardless, the takeaway here is what’s important :))
Some say that with age come experience and wisdom. This may be so, but I feel much more excited to be visited by acceptance and reflexivity: these are/have been instrumental in replacing regret with optimism, and worry with a specific plan for action. But let me tell you a bit more about what this is about.
Most of us have heard about generations; some of us have heard about different generations like ‘the lost generation’, ‘the baby boomer generation’, ‘the Beatles generation’ or ‘Generation Y’. But have you heard about ‘the missing out generation‘? I hadn’t either until I started reflecting on my life (very mid-life crisis, I know) and realised that I belong to it. This is a group of people who were born in the early to late 1960s (at the cusp between the Baby Boomers and Generation X ‘proper’) and who share a collective regret about ‘missing out’ on things.
What have we missed out on?
We missed out on the 1960s for start. You know, I am yet to meet someone my age who doesn’t harbour regrets for missing out on the 1960s; and I am yet to meet anyone who was old enough to enjoy life in the 60s and really did so (most suspected everybody else was having a ball). Still, there is the small matter of music, flower-power and free love: and my generation missed out on all that.
Yes, there was Tina Turner, but there were also Bonnie M. Yes, we did have sex but it was a bit like a pleasurable way to keep fit rather than the political statement it used to be. As to flower-power…well, it completely lost to greed and ‘life in the fast lane’.
Now it looks like that my generation is going to miss out on pensions as well. (J$: Remember, ‘pensions’ in the UK are diff. than here in the States) To cut a long story short, different ‘properties of pensions’ have been going the wrong way. I wouldn’t be concerned if the retirement age was going down and the size of pensions was going up. Regretfully we are told that we will be retiring later and later and the pensions that we can realistically expect, after accounting for inflation, will hardly be enough for hot dogs and mushy peas dinner. Pension funds have been performing badly across the board and people are already feeling the pinch.
To add insult to injury, recently a former benefits chief’ in the UK suggested that retired people should be made to work for their pensions. Wait a minute, now! Isn’t the whole point of retirement that people don’t have to/can’t work any longer? Or have I been labouring under the misguided belief that I am building a pension fund so that my dotage is peaceful and without the need to undertake paid work?
This is what did it for me; here is where I draw the line! I can’t bring the 60s back – this is something on which my generation missed out and that is that. But you know what? Missing out on the 60s music made us ‘musical nomads’. I am equally happy listening to Faure or Dr Dre: it all depends on what I feel like at the moment (and what I am doing; running while listening to rap is great). The ‘sex as sport’ thing also turned out fine: once AIDS made the headlines we had to be safe, not make statements. Yes, my generation didn’t have jobs when we were starting out; but this only means that this time around we know what we are dealing with.
All it takes to turn a situation of loss to our advantage – and my generation has ample experience with this – is to change our thinking and, after that, our actions.
Let’s see what this means for our retirement – our last chance to make a stand against a string of misses. I believe that if we are to come out top trumps here, we need to move away from thinking about employment, pensions and retirement. Ironically, this is the one way that will allow us to have retirement.
From ‘employment’ to ‘work’
Most of us focus on ‘employment’, or jobs, most of the time and structure our lives accordingly. Even when we dream about ‘getting out of the rat race’ and ‘being our own boss’ we still think about employment – we only put ‘self’ in front of it. This is problematic, however, because ‘employment’ is our way to refer to the conditions under which we do specific work. Employment is about a contract between you and an employer (this can be a contract between you and yourself) and your job is what is in your job description – the things you do to complete specific tasks (specific work).
In other words, work is at the core of all this; work is the true measure of the value we contribute to organisations, society at large and people’s lives.
Focusing on work, instead of employment, has two important implications:
- One doesn’t need to be employed to contribute value; and
- One can get much further in both employment and ‘working for oneself’ when one focuses on work and generating value.
Focusing on work and contributing immense value makes it likelier that you will be able to amass the wealth (and develop the income streams) you need so you won’t have to sell your labour, e.g. you won’t have to be employed.
From ‘pension’ to ‘income streams’
Most of us habitually focus on ‘having a pension’. Guess what? You actually don’t need a pension, you need income.
What I am saying here is that we have come to associate retirement with a pension (or annuity) so closely that when thinking of retirement we tend to think about only one possible financial instrument to ensure that we have income. Probably not the best one for that either!
Instead of focusing on pensions it may be better to start focusing on income early on. This opens a whole host of opportunities for generating this income.
From ‘retirement’ to ‘life-style design’
I know, I know. I have read Tim Ferriss and he is a great champion for, and example of, life-style design. But somehow, my generation is missing out again; or shall I say, we appear to be missing a trick or two here. Life-style design is still somehow seen mainly as something young people do. Well, young people and people without other responsibilities like children at school and in college, and elderly parents and aching joints.
I figure that my generation will do well to forget about retirement, doggy cardigans, twisted stockings and worn out slippers. We may as well forget about group tourism for senior citizens – at least this is what I am going to do.
I am determined to live the life I really want during the first part of my later years. I’ll walk a pilgrimage; I’ll chase marathons and take flamenco classes with the gypsies of Granada. I’ll live in interesting places and absorb the language, and the culture. I’ll write, educate and entertain. I’ll wear purple only if it is Prada!
And when the time to slow down comes, as it inevitably will, I’ll set up a commune for my surviving friends; no care homes for me. I’ll start my own place for ‘the elderly and the beautiful’.
This is how my retirement will be!
Before anybody mutters anything about ‘a mid-life crisis’ let me tell you: I am not missing out on this one either – I am embracing it and celebrating it. My friends in the US, just watch out for a lovely middle aged woman on a motorbike riding through your town in 2018 – it may be me. Oh, and I’ll be wearing leather! :)
Maria has the heart of a thinker, the head of a researcher and the soul of a writer. What Maria likes best is to make people think, and this is what she does on The Money Principle: her personal finance blog that will ‘make your head hurt and your wallet sing’. You can catch up with Maria on Twitter or FB.
[Photo by SHeva4ever1]
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We live in a veritable retirement mecca, so I think that we have a perspective on retirement that few 30-year-olds have. From what we can tell, the happiest retirees we know are those that still “work”. None of them have to; they all have more than enough money to sit on their butts watching the price is right forever.
But those that are active and engaged with small businesses or building new enterprises (even at the spry age of 89!) are those that, to us, seem to be the happiest.
And that’s a lesson that we’re taking to heart while we’re still young enough to be making those big long term plans. =)
you can keep “the 60’s” – highly overrated IMO… but the rest of your column rings true. thanks and happy new year!
My takeaway from this and other posts like it: We need to operate as if retirement doesn’t exist anymore. If retirement was a pipe dream, what would we do differently? It’s a great and interesting question. Thanks for the great post!
I can see you now Maria, riding your motorcycle across the States, just like the T-Mobile commercial! You are right on point Maria that retirement has changed and will continue to change for most of us. Many US companies are doing away with the traditional defined benefit plans and replacing them with a defined contribution or 401k type plan. No longer can one work for a single company and expect their salary to keep up with inflation and have the company take care of you in your later years. It will be the responsibility of each of us to carefully plan and save for retirement. The numbers are staggering and with big cuts to entitlements on the horizon it does not look good for consumption minded baby boomers.
I agree with Tony. I’ll save money for a retirement for the day that comes that I’m no longer able to work, but until that day comes, I’m treating my life as if there is no such thing as retirement.
Thanks again Maria! Was a nice change of perspective to read for sure :) Magically enough I don’t think like a woman in her 50s! Hehe… Can’t wait to hear you’re dreams are fulfilled! Keep us updated!
@Mrs. Pop: Yep, this is what I have noticed as well. Happy older people are the ones who have managed to keep involved – both working and socially involved in their own communities. As to the ‘big plans’ – we make those at any age and at any age some people go beyond the ‘planning stage’ and others don’t. Some things don’t change :).
@lj: Thank you! Yeah, most people who lived through the 60s say the whole thing was over-rated. But…Bonny M were not even rated :). Glad the rest of it resonated with you and all the best for 2013!
@Tony: You are very welcome and this is great way to summarise my point: retirement is dead, long live lifestyle design!
@Paul: Ha, ha! Some imagination you have there, Paul! I’ll let you know when I am doing it, may call by :). As to the pensions matter – yep! In fact, I am feeling a bit concerned about the ‘baby boomers’ proper since I am not sure whether they will manage to shift their consumption mindset on time. And, of course, feeling lucky to belong to the ‘missing out generation’ – we are very flexible, generally.
@Edward: I did read your article on retirement and I know you share some of these ideas. I believe that it would be a much more interesting and enjoyable world (and life) if we move away from our fixation on employment, pensions and retirement.
@J. Money: Thank you! As a side note, I am very pleased you don’t think like a woman in her 50s – I wouldn’t be a regular reader of your blog if you did :). Will keep you posted, of course – the dreams have been dreamt; we are moving into the planning stage.
Retirement is like the rest of your life, about making it work for you and living it on your own terms. You can’t rely on much more than yourself for that and today’s actions will design your future lifestyle. It is annoying that the retirement age is being pushed forward and the pensions are being lowered but if you have planed without it, it will only be icing on the cake.
I agree with Mrs. Pop.. I know a lot of retired people who are still working, and don’t need to be working. They actually retired, and then came out of retirement to teach, or consult.
Probably going to be me too.
I think a lot of people think retirement is going to be fishing or sitting on the couch watching tv…I mean that’s how tv portrays it. But that seems so boring! Just saying.
Agreed! I’ll always need to stay busy doing something myself in “retirement” too. Plus I hear that when you don’t keep hobbies/side gigs the odds are against you in living longer. So there’s that ;)