Without Distinction

Jonathan Clements

IF WE WORK LIKE dogs for 40 years, we’ll get our reward, which is the chance to sit around and do nothing for 20 or 30 years. That’s the definition of a successful life, according to conventional financial wisdom. But it doesn’t sound like a whole lot of fun, does it?

My contention: It’s time to rethink the crazy distinction between work and retirement and, in the process, redefine what counts as a successful life. Most of us get a lot of satisfaction from doing work that we’re passionate about and that we think is important, and our goal should be to spend our days engaged in these sorts of activities, whether we’re age 30 or age 70. That brings us to two key questions: How much income will this work generate—and how much income do we need?

Early in our careers, we may not be able to do the work we love, because it doesn’t pay enough to allow us to service our student loans, buy a house and sock away money for retirement. But as we pay down debt and amass some savings, we buy ourselves more and more financial freedom.

We might use this freedom to focus on work that may not be as lucrative, but which we might find more fulfilling. Think about the investment banker who becomes a math teacher or the corporate executive who quits to join a nonprofit organization. These folks traded dollar income for psychic income.

As I see it, retirement represents this tradeoff taken one step further. By our 60s, we should have a heap of savings, which means we have a heap of financial freedom—and we might use this freedom to do work we’re passionate about, but which doesn’t pay us any income. That might mean coaching a children’s sports team, volunteering, pursuing artistic endeavors, devoting ourselves to hobbies or getting more involved with our church. Don’t get me wrong: If we can get paid to do what we love, that’s all the better. Indeed, earning even a modest income in retirement can greatly ease the financial strain felt by many retirees.

The bottom line: We need to collapse the distinction between work and retirement—and instead view our financial lives as the pursuit of ever greater financial freedom. That financial freedom, in turn, can allow us to do work we find fulfilling, with less and less worry about the paycheck that comes with it.

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