For those who are still salaried employees, “slaving and saving” for a seemingly rosy future retirement, the prospect of escaping the daily corporate grind may seem quite alluring.
Until I actually experienced semi-retirement and co-authored a book on the subject, I certainly looked at traditional “full-stop” retirement that way: the gift of abundant leisure or the proverbial month of Sundays; a permanent vacation to be spent reading countless books and binge-watching Netflix.
But there’s more to retirement than having enough money coming in and you can only spend so many hours a day reading or watching TV. What are you actually going to DO with the 2,000 hours a year you’ll gain in leisure time once you stop working? The 2,000 hours is the result of a simple calculation — 50 weeks multiplied by 40 hours a week — performed in a survey by the Royal Bank last year. Those with long commutes can add a few more hundred hours a year of “found” time.
Keep in mind that if you don’t work at all in retirement you’ll have a lot more than just those 2,000 hours a year to fill. Subtracting 3,000 hours for sleep, you’ll have a total of 5,840 waking hours every year. So if you live 30 more years after retiring, that’s 175,000 waking hours to be occupied.
Little wonder that 73% surveyed by RBC aren’t sure what they’ll do with all that time. We spend more time planning vacations (29%) or weddings (19%) than on retirement!
RBC retirement designer Bill Hill (who’s over 60 and still employed) believes savers and the financial industry have it all backwards. We need to think first about the kind of life we want to live in retirement, and only then discuss the finances needed to sustain that life.
RBC has long offered a program called Your Future by Design (See www.retirementdesigners.ca). It’s about having a vision for the rest of your life and – significantly – that of your spouse, with whom you’re going to spend all that time. RBC finds the top five activities for replacing work are health & fitness, travel, hobbies, volunteering and relaxing at home (there’s your reading and TV viewing we talked about earlier!)
Many may discover they want a sixth activity: work, if only on a part-time basis (which is the premise of the book I mentioned earlier: see author bio below). Increasingly, in response to the new book, I’m hearing from people who tell me they actually regret having “retired” too early. One was a teacher who had no financial worries when he retired at 58 and started to collect the usual teacher Defined Benefit pension. But when his spouse died a year later, there was a huge void in his life on two fronts, hence his confession (15 years later) that he may have retired too soon.
Pension expert Sheryl Smolkin “retired” 12 years ago from a corporate job in benefits consulting. She was then in her mid 50s but “there were many changes in the organization and I just didn’t want to do it anymore. I took a big cut to my pension to go early and also took CPP early.”
However, she didn’t stop working for long. By shifting to self-employment she discovered she enjoyed writing about pensions and finance. “I don’t do stuff I don’t like anymore. It’s all part of knowing yourself and doing what you like.” In 2014, Smolkin launched a web site about this lifestyle: RetirementRedux.com.
Then there’s the matter of extended longevity: we’re all living longer and healthier. Mark Venning runs ChangeRangers.com, a website that explores the “promise of longevity.” He believes we should be planning not for retirement, but for longevity.
He gives corporate refugees a reading list for making the transition to self-employment. One book recommendation is Charles Handy’s The Elephant and the Flea. Handy’s early career was in a giant corporation (Shell), which he likens to an elephant. But many are destined to become independent “fleas” who will have various elephants as clients.
Handy envisions a post-corporate “Portfolio Career” that includes paid work, gift work (volunteering), home work (household chores) and study work (lifelong learning.) Venning says we should rid ourselves of the notion of a “do nothing” Retirement and adopt this portfolio approach. “It’s about what to do with 5,840 waking hours a year, of which 2,000 used to be” traditional work. A portfolio career is fluid and the 2,000 hours formerly devoted to corporate “work” will evolve as you age.
Lisa Taylor, president of Toronto-based Challenge Factory (www.challengefactory.ca), uses a similar approach she calls “Career Portfolio Planning. ” She uses the term “Legacy Career” to describe the post-corporate work life many will enter in their 50s or 60s. These can include volunteering, starting a business, sitting on corporate boards, and encompass full- or part-time work.
Taylor divides career portfolio planning into three categories: Stable Base, Hobbies & Interests, and Risky/Entrepreneurial Ventures. In the first you seek enough work to provide income stability. Hobbies and interests focus on whatever you need more time to pursue, perhaps neglected while a corporate cubicle dweller. And Entrepreneurial/Risk are ventures that may or may not pay off in the future but for which you’re willing to invest time and capital.
What are you going to do with your found 2,000 hours a year?
MORE ABOUT RETIREMENT:
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- Ways to reduce taxable income in retirement
- How business owners should time CPP and OAS
- Everything you can do with your RRSP at 71
- Maximize income splitting—years before you retire
- Maximize OAS with a corporation
- How to qualify for EI benefits in retirement
- Should I use my RRSP to pay down debt at retirement?