Retirement Isn’t Guaranteed
But setting yourself up for a strong retirement is the a big milestone in living a wealthy life.
My experience learning more about personal finance taught and continue to teaches me many things. But perhaps one of the most overlooked (in my eyes) was the importance of retirement.
I would read someone’s bold claim that they would retire a millionaire because they had invested X amount by a certain age and therefore would be fine to retire because their investment would have grown to at least a million dollars based off of assumed annual returns.
And sure that is great but it didn’t really excite me.
If you are currently young and in the workforce retirement sounds like a long way off so it can be a difficult benchmark to strive for.
However what I was really not grasping was how new the concept of retirement was. Historically, your average worker didn’t retire - if they were living into their golden years, they would have been working up until they died.
Pensions and social security are a relatively modern invention1. An invention that may actually still be in its experimental phase and isn’t guaranteed to last - or more specifically - still be an option come our own time to retire.
Therefore if you want to not be on the 9-5 grind well into your 80s, investing for retirement is critical.
For me, drawing the connection to retirement as a concept that only I can secure for myself was what made me appreciate the headlines saying I’m 26 and know I will retire a millionaire.
And not only that but seeing how that built onto the larger notion of wealth that I aspire to.
Securing your retirement is the precursor to creating a wealthy life.
In my opinion, living well means more than having the financial funds, but having the freedom to spend your time how you want.
Therefore being able to retire is already saying I will have the freedom in my old age to spend my time how I want.
And with that guaranteed you can continue to work towards building a life that allows you that same flexibility. Ideally prior to your late 60s.
Ultimately I want to live well while I am active and young and not delay everything until I am old - so while the journey doesn’t end at creating a robust retirement fund, it is also the first step.
A pension wasn’t introduced in the UK until 1909 and while the US had pensions for certain public services prior to that, it didn’t spread into other industries until the 1920s.