For most people, there is a general consensus that you should grind it out with a job for many years in order to ultimately reach a point where you can retire and enjoy not having to work. I would contend that while this can be true for some, I have often observed that those who stick to this ideal might ultimately find themselves unfulfilled once they are “retired.” Also – why not aspire to eventually find a profession that you enjoy, affords you autonomy, and allows you to work with flexibility well into your later years? We understand this is not always possible for many people. We do, however, observe some who decide to continue to participate in activities that could result in income after “retirement.” It is for these reasons that we prefer to help clients think more about the idea of reaching Financial Independence instead of Retirement. In our view, Financial Independence means that you have reached a point where you can comfortably rely on your portfolio for your living expenses for the rest of your life instead of having to rely on a paycheck. In this instance, income may continue to be earned from other endeavors, but that income does not need to be relied upon.
We believe it is important to have a plan for what a major life transition like this might actually entail. Some questions one might face are: What will occupy my time? Will I still be accepted as an important part of the community? How will my household absorb the longer periods of time I spend at home? Can I really afford to do this? Is there anything I might decide to do in retirement that could result in income?
This is where having a comprehensive financial plan is important. While goals and ideas around Financial Independence are ever evolving and constantly changing, it is of the utmost importance to review and revisit them periodically.