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Retirement vs Financial Freedom

In the last 150 years within the United States, the concept of retirement has evolved dramatically.  Years ago, unless you were very blessed, you worked until you died.  In that era, people didn’t live nearly as long as they do now and retirement was a totally foreign concept.

Today, the life expectancy of a person in the United States is 78.5 years.  Remove anomalies such as infant mortality, violence, and accidents, and life expectancy increases significantly.  Statistics show that if you live to age 50,  you are likely to survive to at least 80, and I’ll bet you don’t want to still be working in your 70s and 80s.  So, since there’s a pretty solid chance you will to live 80+, then you need to be financially prepared for those golden years.

For decades, the most popular retirement security was offered through a corporate pension.  If you went to work for a company or government for 25 to 30 years, and you might qualify for a set amount of income for life.  This was a great arrangement, but it had two significant flaws: (1) you were fully dependent on the pension, and (2) the pension was only as secure as the entity that guaranteed it.  Perhaps you’ve heard stories of folks who lost their pensions because the company went bankrupt.  Even today some government pensions are precarious as several cities and states have overwhelming debt.  Independence is valuable and no company or government is going to take care of you as well as you can take care of yourself.

Financial independence is what enables you to retire.  In fact, there is a shift in the world of retirement planning away from the term “retirement” in favor of the phrase “financial independence”.  Many people have things they want to accomplish when they eventually quit their regular job.   If you build enough wealth to sustain yourself, then you may no longer need to work, but you’ll probably want to continue contributing to society.  

People who begin to follow a plan early in life work extremely hard in their youth so that when they reach 40 or 50 they can quit their career and begin working in a field about which they’re passionate.  An accountant working tax season for years might become a photographer for a travel company or website.  Maybe instead of continuing in dentistry, you want to go to a foreign country and serve as a missionary. Perhaps instead of working the assembly line at a factory, you join a band and pursue your love of music.  These situations might sound strange or comical, but if you have enough wealth, why not do what you love?  

When most folks think of retirement, they forecast an age or a date on the calendar when they’d like to retire.  They rarely consider retirement in terms of wealth accumulation.  While It’s good to think about timing when you consider retirement, you should also be focused on the dollar amount you will need. In other words, retirement is not an age; retirement is an amount.  

The next big question is pretty obvious: how much is enough?  What resources do I need to have in place so I can sustain myself and my spouse during our elderly years?  As you can imagine, the answer is not simple.  

The amount of wealth you’ll need is affected by a variety of factors.  One is the need for income in retirement.  What will you need each month to sustain your lifestyle?  If you’re following a wise financial plan during your career, you should have no consumer debt or mortgage and your expenses should be fairly limited. If you have big plans in retirement such as traveling, recreation, or hobbies, then you’ll need to account for the expense related to those activities.

We can help you determine the amount you’ll need in retirement based realistically on your preferences.  Think about what you want to do when you leave your job.  We can work alongside you to develop a clear path to financial independence for you and your family.  Almost no one becomes financially independent by accident, so you’ll need a specific plan to follow to achieve financial independence.  Together we can do it...and it may be closer and easier than you think.

Will Sanders

Financial Advisor


Will joined H.I.S. in April of 2022 after beginning his career at Edward Jones. Prior to working in the securities industry, Will graduated from Ouachita Baptist University in 2019. At Quachita Baptist will received his BA in Finance...

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