It seems ironic to even bring up this topic, given that most people are woefully unprepared for retirement. Yet we seem to have two classes of people where retirement is concerned. One is obsessed with retirement to the point of throwing all their extra money into it, many even actively working toward early retirement. The other class is obsessed about not being prepared.
There?s a happy medium in there somewhere, but reaching a point of balance seems elusive. That begs the question, why are Americans so obsessed with retirement in the first place?
Maybe we wouldn?t be, if we stopped for some deep contemplation of the reasons why. Here are my thoughts?
Following the Herd
The path of least resistance is usually found in following the herd. People naturally tend to gravitate toward the places where human traffic is heaviest. Whether it?s a restaurant or a movie theater with a long line, or a popular concert or sporting event, the thinking is If everyone else is there, I want to be there too.
So it is with retirement. Perhaps due largely to the nine-year bull run in stocks, the financial media and blogs are trumpeting retirement planning in every direction. If you?re even remotely plugged into the world, it?s impossible to ignore. It?s even become popular water cooler conversation in workplaces across the country.
Even if you don?t have a particularly strong interest in retirement, you could easily become obsessed just by following the herd.
It?s probably not an exaggeration to say that most people aren?t happy with their jobs. All jobs, and even businesses if you?re self-employed, have a generous amount of drudgery. While it?s sometimes possible to either minimize the drudgery, or plan an escape route out of a job that has too much of it, sometimes there?s simply nowhere else to go.
When that happens, fantasy can replace an immediate action plan. You start dreaming of crashing out of your unhappy circumstances. Some people live for the weekends, and others for vacations. But retirement is a permanent solution ? a virtual escape hatch from the drudgery of the job.
If you don?t much like the work you?re doing, you can easily become obsessed with retirement.
Most People are Afraid to Take Chances
In a real way, planning for retirement is the ultimate form of playing it safe. You?re salting money away and investing it so eventually you can live the life you want. In doing so, you may be avoiding pursuing more immediate opportunities that could lead to disappointment or financial loss.
As much as anything, saving for retirement is more of a system than a goal. You set up a specific amount that you plan to invest each year, whether it?s a dollar amount or percentage of your income. You also expect to get a certain rate of return on your investment. Because it?s long-term, and it?s done incrementally, it does tend to be largely low risk (though it?s not without risk entirely).
In a real way, it makes it easier to avoid more immediate risks. Like starting a business, changing careers, or investing in someone else?s business start-up. Each has the potential to be life-changing if it works out well. If it doesn?t, you could be facing a near-term setback.
It could well be that becoming obsessed with retirement turns into a risk avoidance strategy. Even moderate risks are avoided, in order to improve the longer-term chance of retiring. Pursuing your passion is replaced by pursuing retirement.
The Desire to Maintain the Suburban Lifestyle
Perhaps as no time in the past, people today lock into certain lifestyles. The suburban lifestyle ? the single-family house, the late model car, the annual vacation, and having at least as much stuff as other people in your world ? is seen as something you can?t live without.
Saving for retirement could be as much as anything else an attempt to preserve that lifestyle to the very end of life.
There may be a less expensive lifestyle possible, but it virtually doesn?t exist if you?re locked into the suburban variety. Building up a fat retirement plan may be seen as a way to preserve it for a lifetime.
?I Have to be Rich to be Happy?
Have you noticed how many retirement projections have you being a millionaire by the time you?re retired? Truth be told, if you want to maintain the suburban lifestyle in retirement, becoming a millionaire is practically a necessity. Or at least until that will no longer be enough.
I?ve often thought one of the unspoken attractions of retirement planning is the prospect of becoming rich. Let?s face it, that?s virtually what it would take to maintain ?the retirement of your dreams?.
For most middle income people, retirement planning represents the best shot at becoming rich, short of inheriting a fortune for buying a winning lottery ticket.
And in our money is the measure of all things culture, millions do equate wealth with happiness. And if you expect to be happy in retirement, then being rich is a natural part of the equation.
Deferred Dreams ? ?I?ll Start Really Living When I Retire?
In some respects, this also refers to deferred living. It?s easier to imagine being happy when you?re comfortably retired, and free from the need to earn a living. It?s much more difficult to decide to start pursuing your dreams today. Or more particularly, to decide to take the risks that will be involved in making it happen.
Anytime we can put off the day when we?ll be happy, it?s easier to imagine that it will happen, and that it will be a painless process. This is even more true given that for young people, retirement is many decades into the future.
Why Being Obsessed With Retirement isn?t Healthy
Everyone should have a plan to save money on a regular basis for retirement. But more because you?ll want to be prepared when that day arrives, than because you?re imagining some sort of heaven on earth when it does.
When we?re thinking about retirement, and being fed by the financial media, it?s easy to pretend that preparing for retirement is a risk-free proposition. It isn?t.
Here are some reasons why:
- While making a provision for the future is always important, pinning your best hopes on such a faraway event can keep you from living in the moment.
- Being obsessed with retirement ignores the possibility that you might not live long enough to see it. It?s not being fatalistic, it?s being realistic .
- By becoming obsessed with retirement, you may avoid pursuing important opportunities, the kind that could create that dream life much earlier than retirement.
- You may stay on a job, or even accept a job, mainly because it has a very generous 401(k) plan.
- Retirement obsession relegates work to something that should be avoided, as if it?s something evil we need to run away from. That completely ignores the fact that the work we do gives our lives meaning and relevancy.
- Not pursuing work that you like is largely a waste of your life.
- Some people become so obsessed with saving for retirement, that they neglect important near-term financial goals.
- It?s even possible to become so obsessed with retirement, that you neglect your health and give inadequate time and attention to your loved ones.
- Retirement obsession ignores the possibility that your plans might not work out, despite your best efforts. And if they don?t ? then what???
Final Thoughts on Why Are Americans So Obsessed with Retirement
Once again, none of this is a call to abandon retirement planning or saving. But it is a call to recognize that most of your life will take place before you retire. The future is important, and we have to prepare for it. But nothing is more important than right now. There?s a saying, yesterday?s a canceled check, tomorrow a promissory note, but today is cash!
We?d all do well to remember that. Life is not always as certain as we?d like to believe. While I realize that we live in a ?post religious era?, I?ve always found the following Bible verse sobering:
?Now listen, you who say, ?Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.? Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, ?If it is the Lord?s will, we will live and do this or that.? ? James 4:13-15
Make a provision for retirement by saving and investing on a regular basis. But by all means, don?t approach the task as if you?re preparing for the most important time in your life.
Now is the most important time in your life, and if you don?t get that right, the rest may not work out either.
Including your retirement.
As the saying goes, don?t put all your eggs in one basket. That includes retirement, even though many would convince us that it?s the most noble basket of all.