The Retirement Mirage

What are your work and life goals? Are  you working today, to save up x amount of money, then you will retire to either do what you love, or to rest in old age?

Most of us are. We defer rest and happiness, suck it up in jobs we hate that are aging us, all for the hope that one day, we will have enough money to live the lives we want to live. However, this is a mirage as demonstrated below.

1. It is predicated on the assumption that you dislike what you are doing during the most physically capable years of your life. This is a nonstarter-nothing can justify that sacrifice. It also is predicated on the assumption that it is impossible to find something you will enjoy doing for the rest of your life, while you are young, and the fantasy that on retirement, you will automatically be able to find something you love doing. 
2. Most people will never be able to retire and maintain even a hotdogs-for-dinner standard of living (ouch!). Even one million is chump change in a world where traditional retirement could span 30 years and inflation lowers your purchasing power 2-4% (5-8% in Africa) per year. The math doesn’t work. The golden years become lower-middle-class life revisited. That’s a bittersweet ending. “Saving for retirement” is a back up plan, not the main plan. No matter what financial advisors tell you, it is impossible to build up a fund so big, to enable you sit around and twiddle your thumbs for the last 20 years of your life. If it would be possible, it would probably need you to wear yourself thin for the first 30 years of your work life to build the fund.  Think about our parents and some of our grandparents. Despite working long years, they still have had to set up businesses or work to sustain their lifestyle post-retirement. Sadly, most of these enterprises fail, and their standard of living significantly goes down, which frankly makes them die faster.  Retirement isn’t the final redemption. 
3. If the math does work, it means that you are one ambitious, hardworking machine. If that’s the case, guess what? One week into retirement, you’ll be so damn bored that you’ll want to stick bicycle spokes in your eyes. You’ll probably opt to look for a new job, or start another company. Kinda defeats the purpose of waiting doesn’t it?

Does this mean we shouldn’t save for retirement? It certainly does not! It is sensible to plan for the worst case by having a pension fund in place, and of course there are tax advantages for this (if you save with a registered pension fund). It also makes sense to invest in assets. What doesn’t make sense however, is to defer living until the day you retire.

The 3 points above are from Tim Ferris’ 4 Hour Work Week, a book I wouldn’t recommend to anyone who shares my views on motivation and positive thinking, but it does have some gems. My comments are in italics above.