Retirement is all about freedom; or is it?
When it comes to retirement planning, we often hear people using this old saying to describe retirement, “In retirement, every day is a weekend.” This language is used to represent the fact that retirement is supposed to represent freedom – the freedom to do what you want when you want where you want and however you want to do it. The word freedom has become a universal symbol for retirement and it stems back to the London Life advertising campaign – FREEDOM 55.
When people are still working, what is one day most people look forward to every week? How many of you look forward to Fridays because it is the start of the weekend? For most people, weekends represent precious days of freedom because you are away from what you do most of the time and that’s work!
Is there such a thing as too much freedom?
I think freedom is a great concept and most people’s perception of the ideal retirement would represent this life of freedom where you choose to do what you want and when you want to do it. Freedom and time are great concepts but the problem comes when you have too much time and freedom on your hands. Is it possible to have too much time? Do you know people who have too much time on their hands and don’t know what to do with it? People with too much time often become bored which does not represent the ideal retirement, right? Do you know people who retired assuming it would be great only to find they were bored out of their minds?
In my retirement planning workshops, we often ask people to describe their perfect day. One response went like this:
“When I retire, I plan to sleep in. I look forward to the days when I don’t have to plan my day and I can just do whatever I want. If I want to stay my pajamas all day I can. If I want to go for a walk, I can. I can’t wait till the day when retirement has no boundaries. I will be free to do whatever I want.”
As much as this may appeal to some people, there are some fundamental problems with this thinking.
Freedom is great when it is harnessed.
Freedom without a plan may lead to useless freedom. Freedom is such a generic term that it can lead to no action. The risk with the response above is there are this person values freedom so much that nothing happens. The action comes out of being specific and detailed. For example, in retirement, we have the freedom to travel more. Everyone wants to travel more but until you come up with details about what travel means to you, travel has no meaning.
Freedom of choice is great unless there is too much choice.
The choice is something the corporate world gave us. Their solution to increase sales is to give more options and more choices. Different colors, models, sizes, shapes, options, styles, versions, etc. Some studies have shown the more choice we have, the more confused we get and sometimes to the point where we don’t make any decisions because it is all too overwhelming.
Financial Freedom is not enough
For most of us, retirement is really entwined with finances. Most of us think if we just save enough money, then we can retire to the best years of our life but is this really the case? Money is an important retirement concept but it is closely linked to your lifestyle. You can have all the money in the world but if you don’t know what to do with your time, what good is the money? Ironically, I have met lots of retirees who have a difficult time spending money in retirement because of fear of spending it too quickly or to avoid paying taxes on the withdrawal.
Successful retirement planning comes from the harmonization of both lifestyle issues and money issues. As a result, freedom in retirement works best when you have some structure. In other words, we all look forward to our weekends when work is part of our lives. But if every day is a weekend, then what do we have to look forward to?