Retirement planning is like making a life insurance. It should be viewed as nothing more than a small plaster on the wound if worst case scenario should happen and you become physically incapable of working and need a reservoir of capital to survive.
Timothy Ferriss makes a strong case for this in his book “The 4-Hour Workweek” and I must say that his arguments are hard to beat. Here goes:
Retirement as a goal or final redemption is flawed for at least three solid reasons:
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.
2. Most people will never be able to retire and maintain even a hot dogs-for-dinner standard of living. Even one million is chump change in a world where traditional retirement could span 30 years and inflation lowers your purchasing power 2-4 % per year. The math doesn’t work. The golden years become lower-midlle-class life revisited. That’s a bittersweet ending.
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?
“Someday” is a disease that will take your dreams to the grave with you!
This is the reason why I have chosen to spend all of my 20s and half of my 30s travelling. This has always been my dream – to see the whole world. So by now I have lived most of my dreams and have travelled more than 50 countries in the world. I don’t dare to postpone.
And I don’t take life or “tomorrow” for granted. I don’t take for granted that I will be old or even live until I am 50. And should I be so blessed to have 70 years to experience the world, I can’t take for granted that I can even walk by the time I “retire” and so how can I travel the world if I am not physically well? There are no garantees in life and certainly not on time. I am not a pessimist – I am realist.
I will never say that I will travel when I get retired – because by then I have seen it all. For sure!
1 thought on “Retirement and pension are illusions”
I must say that you make some valid points and I almost totally agree with everything. However, I have to disagree with you here: “One week into retirement, you’ll be so damn bored that you’ll want to stick bicycle spokes in your eyes”. Boredom applies to people who have known nothing but how to work, come home, eat and watch TV. They know nothing else. I’ve heard similiar words in the past. They are usually along the lines of “I wouldn’t want to win the lottery because I’d be bored”. If I were financially independent for whatever reason, I would never again work a job. However, I wouldn’t be bored either. There are too many places I want to travel to (for more than a weekend), too many things I want to study and learn to be bored. The human life span just isn’t long enough for all the things I’d like to master. Maybe if I had a couple of thousand years, I’d finally start to get a little bored.