When your retirement date is getting closer, you probably ask yourself, what is the real meaning of retirement? There are different concepts of retirement. In this article, I’ll explain them to you and what it means for you when you’re retiring.
Traditionally, the real meaning of retirement is when someone has enough savings and can claim retirement benefits like their pension to stop working permanently. Today, the real meaning of retirement is more than having the financial freedom to stop working. Retirement refers to a lifestyle change where someone decides to chase their dreams and complete their bucket list.
I’ll focus on the different concepts of retirement. First, we’ll look at the traditional retirement concept and essential things to keep in mind. In the second part of this article, I’ll tell you more about how you can prepare for the lifestyle change that retirement is. Ready to learn more? Let’s start!
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Traditional Meaning Of Retirement
The traditional meaning of retirement is based on the fact that someone is too old to work at a certain age. Signs of aging in the workforce are when someone often takes too many sick days, slows down the process, and takes up the spots of younger people. However, it was necessary to offer these aging people an income, so they didn’t need to worry about their living costs and could stop working.
When someone is reaching the age of 65, it’s commonly known as the retirement age in western society. The concept of permanently leaving the workforce at this age is relatively new when we look at the history of modern society. National retirement programs with a pension paid for by the country is known since the end of the 19th century.
Public pension first started in government industries. The police force, firefighters, teachers, and other municipal employees began to get a public pension at the age of 65 around the mid-1800s. However, it took several decades before private industries began to offer pension plans as well.
During the great depression, the economic crisis in the 1930s, the concept of forced retirement snowballed. With the high unemployment numbers among younger people, it was necessary to create more jobs for them. One of the solutions was to get older people to quit working. But for them to do that is was essential to pay them enough so they could stop working and had some financial freedom.
Real Meaning Of Retirement Today
The meaning of retirement changed over the past years. Today retirement is more than the period where someone stops working and can claim retirement benefits.
Retirement for most people is still something they reach after a period of lifelong working, between the age of 65 and 70 years old. However, with healthy aging increasing, retirement focuses now on a period where older people chase their dreams and live life to the fullest.
Financial Freedom In Retirement
One of the most important factors that decide if someone can retire is their financial freedom at a certain point. Government pensions aren’t enough to establish financial freedom, mainly because we live longer. These savings are based on an older model where we didn’t get as old as today.
So, with many more years to live, often healthily, it is important to focus on getting enough savings for this period. There are several ways someone can save money for retirement. Simply by saving money for retirement during the years you’re working, as well as investing money for retirement. The amount of retirement income you’ll need depends on how many years you expect to live in retirement and the lifestyle you want to have as a retiree.
It is important to plan these savings in time and with the help of a professional financial advisor, so you can make sure you’ll make the right choices for later in life. You can find the best professional advisors quickly via JustAnswer.
Financial Independent Retiring Early (FIRE Movement)
In more recent years retiring before the age of 65 became more popular. It’s about people who didn’t want to work all their lives and wait for the retirement age of 65 to spend more time on the things they like doing. This movement is known as Financial Independent Retire Early, in short FIRE.
It isn’t, as many people suspect, about getting as rich as possible. This lifestyle is based on creating enough money via savings, investing, or income streams to stop working as soon as possible and focus on things that you find truly important. Originally the FIRE movement was all about creating the highest income possible so that you could stop working.
However, for a few years, the focus shifted to a more lifestyle orientated approach. The minimalistic lifestyle approach and FIRE movement combined became very popular, such as how we set up our lives. We focus on things we find most important, like spending as much time as possible with our son and as a family together. We still work but can decide our working schedules. We cut our spendings and living costs back to a minimum to afford to live without a lot of money.
Purpose Of Retirement
The purpose of retirement is different, depending on which perspective you look at it. Because I specifically write for you as a (soon to be) retiree, I want to focus in this part on the purpose of retirement for retirees. But it is also important to take a short look at the perspective of the employer/ company.
The purpose of retirement for a company is to make sure an aging employee stops working before getting too old to do the job. It’s to avoid the employee is having too much sick days, taking up the spots of younger employees urging to jump in, and protecting the employee from working a lifetime. In every country, there are laws to protect employees from getting forced into retirement too early. However, specific rules can also vary per industry.
The purpose of retirement from a retiree’s point of view is different. It’s often a time where someone is living up to for years. Many retirees look at their actual retirement as the start of a new chapter in their lives. Purpose in retirement also means what someones want to reach in their retirement. Being retired doesn’t mean that someone doesn’t need any goals. In fact, most retirees create a lifestyle plan and have many goals of things they want to do in retirement.
Having retirement goals is the first step to create a lifestyle in retirement and to make sure that you’ll reach happiness in retirement.
Lifestyle In Retirement
Most people retire around the age of 65 after working for 30 years or even longer. Being retired after having worked for so long means a lifestyle change. So it is important to prepare for a lifestyle in retirement.
So, it is not only important to prepare financially for retirement, like we discussed earlier, but also about how you want to spend your retirement days. It’s important to create goals for things you want to do in retirement.
Did you know that older adults, at the age of 65+, spend most of their time watching television? It’s probably not something you would think of when thinking about your retirement lifestyle. However, according to a recent study of the US Bureau Of Labor Statistics (BLS), watching television is good for 4.5 hours a day of leisure time!
There is actually so much more to do in retirement. It is essential to focus on staying active because that’s related to healthy aging and probably makes you much happier as well.
However, retirement is a significant lifestyle change, and you need to prepare for it to get the most out of it. You just read the different meanings of retirement and why it’s important to prepare for your retirement. If you want to prepare in the best way possible for this upcoming lifestyle change, I recommend reading my Ebook Five Steps To Happiness In Retirement. With this book, you get yourself on the fast-track to happiness, and you discover how to find happiness and fulfillment in retirement that others take years to find.