There’s a growing body of evidence that suggests postponing retirement – even by just one year – can lead to a longer, healthier life. The reality is that we’re living longer and saving less. Something has to give. But another year or two spent pushing paper in a cubicle is probably not the holy retirement grail we’ve been searching for.
Indeed, if you’re healthy and can afford to stop working, the idea is to find something else you’re passionate about and do that instead – whether it’s switching to a new career in an unrelated field, writing a book, starting a blog, or simply volunteering at your favourite charity. Call it your work-optional years.
Victory Lap Retirement
Authors Mike Drak and Jonathan Chevreau call it your Victory Lap Retirement. The authors argue that the idea of retirement has to change in the sense that going from 100 percent work mode to 100 percent leisure mode is boring and fraught with risk.
The fact is we might be retired, in the traditional sense, for thirty or forty years – as long, or maybe longer, than we spent during our working lives. That’s too long to spend in an armchair watching Seinfeld reruns.
How do we find purpose and meaning in this third stage of life? More importantly, for some, how do we finance it?
In Victory Lap Retirement, Drak and Chevreau describe a post-employment lifestyle designed with a unique blend of work and play that allows you to live life to the fullest, on your terms, while you’re young enough to enjoy it.
The key to planning your victory lap retirement is to achieve financial independence, or findependence. First you must rid yourself of all consumer debt and commit to a life of frugality – spending less than you earn while saving at least 10 to 20 percent of your paycheque and investing it wisely.
Related: What’s your Findependence Day?
Next come marriage, mortgage, and kids – the formation of your family and housing. The authors say the findependence game only begins when you’ve paid off the mortgage.
At the same time you should be in wealth accumulation mode with preauthorized automatic savings. Once the mortgage is paid off then you can double-down on saving for your findependence. This stage could easily last thirty or more years.
The final stage is the encore act, or victory lap, when one decides to leave corporate life to pursue their innermost dreams and long-suppressed life goals.
“No longer do you wish to be a salaried implementer of someone else’s grand vision; now you want to be the star of your own show.”
At some point during your victory lap, even if your encore career is bringing in income, you’ll likely shift to the decumulation and downsizing stage. That means planning for how to draw down your portfolio with an eye toward longevity and aging.
Drak and Chevreau argue convincingly that a traditional full-stop retirement doesn’t work anymore. But a retirement filled with purpose and meaning is going to have to entail some kind of work. Ideally it’s not the drudgery of the corporate office but work that brings you joy every day.
Not everyone can do what they love for a living, which is why I say, “do what you love on the side.”
Work can just be work. We all have to do it. But try and save as much as you can while you’re working so that eventually you’ll no longer rely on that corporate paycheque and can shift your energy towards doing something you love. The sooner you do that, the sooner you can plan your Victory Lap Retirement.
Time for a giveaway!
Jonathan Chevreau kindly offered me a copy of Victory Lap Retirement to read and review, plus an additional copy to give away to one lucky reader.
To enter your name for a chance to win a copy of Victory Lap Retirement, simply leave a comment below and let us know what retirement means to you. Is it early retirement you’re striving toward? Traditional full-stop retirement at 65? Or do you never plan to retire?
closes on January 1st, 2017 has been extended to January 2nd at 5PM EST. I’ll announce a winner in the following week’s edition of weekend reading. Good luck!