Challenging the Retirement Paradigm Case Study 2: Joan, the elementary school principal

Blessed are those who enlighten the rest of us with their quest for quality--and get paid, too!

We need to consider that some people may not want to “retire” because they like their jobs.  As Confucius once said, if you love your job, you’ll never work a day in your life.   Many of this type of worker is a professional in a service industry, or they are lucky enough to earn a living off of their art or other passions.

I ran into Joan at a restaurant one Friday night.  I hadn’t seen her in several years, but I had actually helped to hire her decades ago as principal of the school that my kids went to.   We chatted and while we were catching up on family and life events, I was doing the math in my head and calculated that Joan was well past the point at which she might have collected her pension and retired from her lifelong career as an educator.

“So, Joan, are you thinking of retiring at all?”  I asked her.

“Well, I could, but my job is getting easier, so I figure, why retire?”

“It’s getting easier?”  I asked, surprised.  After all, a lot of educators I meet complain about the lack of support they get on every level, as well as the challenges of their students who often are distracted from learning by familial, social, and economic factors.

“Yes,” she continued.  “There are a lot more Asians in the neighborhood now, and they make my life easier.  The parents are supportive and involved and the children are motivated.  So, it makes my job easy.”

Joan is not going anywhere soon.  She may as well continue being of service in the community as long as she enjoys it.

Most of the early retirement how-to books I’ve seen are proponents of being completely financially independent so you can quit your job and travel and go wherever the wind blows you.  If you have a job that lacks meaning and you have no intention of seeking greener career pastures, working for financial independence with the goal of not working at all is a great goal.

But wouldn’t it be heaven to be able to accept the money you earn as kind of icing on the cake–not the pot at the end of the rainbow?  Who wants to chase that rainbow, anyway?   You totally miss the journey if you do.

Shortly after Steve Jobs died, I read his biography by Walter Isaacson.  One thing that struck me was Jobs’ ambivalence towards money.   In fact, this ambivalence manifested itself in some nasty fights with his Board of Directors at Apple.  While the Board of Directors and the stockholders a healthy profit as their “True North,” Jobs saw profit as secondary.   His True North was always Quality.

Steve Jobs relentlessly pursued Quality–in much the same way Ayn Rand spoke through architect Howard Roark in The Fountainhead, and the same way  in which Robert Pirsig maintained his motorcycle in Zen and the Art of Motorcycle Maintenance.  In the meantime, he made money.  Lots of it.

If you are lucky enough to have gotten to the apex of Maslow’s Hierarchy of Needs and are profiting from it, you are in company with Steve Jobs and Howard Roark.   But most of us need to earn money in more mundane ways while working on actualizing ourselves.  (By the way, for inspiration on that front, I highly recommend a visit or revisit to those two classic books I mentioned above.)

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It’s also worth noting that even the shine of idealism that motivates people in the service professions tarnishes.  In the book Rethinking Retirement–How to Create the Life You Want Without Waiting to Retire, the author, financial planner Keith Weber, talks about one of his clients, a teacher:

I learned Jeff was covered by a state pension program that used the ‘Magic 75’ formula where he would qualify for full retirement benefits when his age and years of service combine to equal 75.  At age 57 with 17 years of service, he was just a few years away.  You can imagine my surprise then, when he responded to my question, ‘When would you like to retire?’ by saying ‘I want to leave at the end of this year.’

‘But why?’ I asked.  ‘You’re so close to being able to retire with full benefits.’

Without missing a beat he said, ‘Keith, I just don’t love the little bastards anymore.’

So, let’s look at someone like Joan–who has dedicated her life to worthy goal–getting thousands upon thousands of kids to learn and grow.  Let’s just say she is ten years from retirement, and her job hasn’t gotten easier–it’s gotten harder.    She’s burnt out.

There are two scenarios for her situation now.  Scenario 1: she has lived her life as if she was going to have to depend on her salary until she retired at a normal age, which means she lived like most.  She bought as much house as the bank was willing to lend, and she’s furnished it to keep up with her academic friends.  She finances her cars to get to work,  She loves to travel and on her few weeks off during the summer, she loves to go to exotic places, as justifiable sabbatical and mental stimulation.  She usually charges the trips and pays them off throughout the year.

But now she’s stuck.  She’s servicing debt, and while she’s hovering on the line of living within her means, she handcuffed to the salary she’s built up over the past twenty years.   She either has to find a way to work through the burnout (maybe with another expensive trip next summer), or she has to cling on miserably until she can figure out what else to do.

On the other hand…[to be continued]

Next Post–Joan’s alternate scenario

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Challenging the Retirement Paradigm Case Study I: Matt, the Promising Marketing Manager

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
–The Road Not Taken, Robert Frost

I’m not a financial expert and I’m not a life coach, so the way I’m going to answer the “yes buts” about the retirement paradigm that I said that I’d talk about in the last post is to let the real experts take the floor by providing a few links.

Over the next few posts I’ll discuss some hypothetical people marching toward retirement:

Matt is in his late 20s and has been entrenched in his job for a few years.  He had gone to college and changed his major a few times, but finally settled on Marketing, after trying classes in history and anthropology.  He loved his classes in anthropology and thought it would be great to go to places and uncover hidden secrets about man and society, but he wasn’t ready to rush into grad school, and he was sick of being a broke student.  So,  he shifted to a more practical major, upon his dad’s advice, and his personality and better-than-average grades won him an interview at a Fortune 500 company.   He and his parents were thrilled when he got a job offer after only three months of searching.  In this economy, he considered himself really lucky.

But, some realities of 9-5 came as a rude awakening to him the first year.  Not that he dislikes his job as an entry-level manager.   He really enjoys the camaraderie and the challenge at this job.  Plus he’s optimistic about his future.  His boss thinks he has a lot of promise, and has indicated that he could be promoted within the year.  Matt’s friend Ashley started a couple of years before him and she is already a vice president!  She recently got rid of her college car, a Ford Focus, and bought an entry-level Audi.

However, Matt sometimes finds it overwhelming because he knows he has to work 50-60 hours a week at his job to continue to impress his boss.  With those hours, and his 3-hour a day commuting time into the City, he’s pretty exhausted on the weekends.  The worst thing is, he feels that two–weeks vacation a year is pretty constraining.  He has to choose carefully how to use each day.  His college dreams of traveling to exotic places has been pushed to the back of his mind.   He doesn’t think about it most of the time, because the thought of having to wait decades to do those kinds of things is kind of depressing.

In the meantime, he hangs on out Thursday nights with his friends at trendy bars and joins a really great gym, spending some of his cash on a personal trainer.  Because of his commute, he’s thinking of leasing a Lexus SUV.  There’s a great deal going on–only $396/month for 24 months.

Matt might want to read:

Your Money or Your Life:  This classic by Joe Dominguez and Vicki Robin will be on the list for all my friends here, because it simply asks you to take a good hard look at your life and evaluate how you are spending your life energy.  Nothing is worse than not being true to your values, and YMOL (as it’s affectionately called by its fans) takes you through the consequences of spending mindlessly, and provides 9 steps to transform your relationship with money and achieving financial independence.  An updated edition was published in December 2008.

Chris Guillebeau’s blog/book:  The Art of Non-Conformity:  Before Joe’s Golden Handcuffs get locked on, he might want to prod the fires of his dreams of travel by reading alternative lifestyles, such as Chris’s.  Or, Tim Ferriss’s The 4-hour Workweek.   Or, My Exile Lifestyle by Colin Wright.  Reading books and blogs that show how other young people have shaped their lives might help challenge the paradigm Joe grew up with and soften his loving parents’ advice to work hard and get a good secure job.   After all, isn’t that what his dad and mom had done?   That was fine, but Chris and Tim and show Joe another way.  Joe’s boss said he is smart, a great communicator, and has great ideas, so Joe could easily be another Chris or Tim if he wanted to.

Poke the Box by Seth Godin.  Since Matt is a marketing guy, this book will come in handy for both work and life.  It asks you to shake things up.  Don’t accept what you see.  Have the courage to take initiative.

Dave Ramsey’s Total Money Makeover:   Before Tim leases that Lexus he might want to read Dave’s book.   But since most people read TMMO as triage after financial damage has already been done, let’s leave Dave alone for a moment.

Matt needs to ask himself the following questions:

  • Why am I working at this job?  Do I really feel fulfilled, or did I grab it out of fear nothing better would come along?
  • Was I also listening to my heart when I took my parents’ advice, or was I leaving it behind?
  • Why am I coveting Ashley’s Audi?  What are my real reasons for wanting to lease an SUV?
  • If I never get around to traveling to cool places until I retire, how will I feel about that?
  • Am I following a path because it’s the path of least resistance?  Or because it’s the only path I’ve had a model for in my life?
  • Do I really need the perceived security of a “good future” at a corporate job?  Why?  Is “security” even real in the workplace?
  • If I really do like the challenges of my job, are there any ways that I use the same skills but modify the work schedule?
  • If I really do like the challenges of my job, how can I ensure that I don’t compensate for my hard work by spending hard-earned money on stuff I don’t really want or need?
Matt has two paths in the road in this particular scenario:  He can either continue on his path in marketing for a major corporation, or he can revisit his interest in travel and anthropology.   How will his thought of the future be changed for each one?  What are the possibilities for shifting the retirement paradigm for each pathway?

Next post:  Matt’s road(s) to the future

Give Us This Day Our Retirement Bread: The Retirement Paradigm Needs to Shift

There was a child who was watching the mother prepare a pot roast for their traditional Sunday family dinner.  The mother cut off the tips of the roast and put it into the pan.  The child asked, ‘Why did you cut off the tips of the roast?’ The mother replied, ‘That’s how my mother prepared it.  She’s in the other room–why don’t you go and ask her?’ The child then asked the grandmother, ‘How come when you prepare a roast you cut off the tips of the roast before you put it into the pan?’ The grandmother replied, ‘Well, that’s how my mother did it.  Why don’t you go ask her?’  So,  the child went to her great-grandmother and said, ‘I asked Mom and Grandma why they cut off the tips of the roast before they put it into the pan and they each told me to ask you.’  ‘Well,’ the great-grandmother said, ‘I don’t know why they are doing it…but I did it because the roast we bought was always a little too big to fit in the roasting pan I had.’

Conventional wisdom says that we should work at jobs until we arrive at some arbitrary age that was set at some irrelevant point in recent history and then stop working suddenly in order to spend the rest of our days taking water aerobics classes or chasing balls on golf courses.

This paradigm is about as relevant as the truncated pot roast in the story above.  I’ve recently been thinking about how every day I ask the Lord for my daily bread–not for the bread that I might need in 2025.   This raised a contradiction in my mind–in the most foundational prayer Christians pray, we simply ask for what we need today–not tomorrow.   But as a member of this Western culture, we have been raised with the belief that we are as foolish as the fabled grasshopper if we only live for today without stocking up big time for our Golden Years, perhaps at the expense of our happiness today.

So, I started investigating where the idea of “retirement” came from.  And as you might expect, I found that the concept and practice of “retirement” as a very recent phenomenon created for the convenience of employers during the Industrial Revolution.   We, as a species, have gone millions of years without needing a pension or a 401k–but whoa!  All of a sudden comes the 20th century and now hoarding for the future so that we can drop out of society at late mid-life is part of our mental DNA.

Does it make sense?

Not necessarily, but the culture has over the course of four or five generations adapted to the concept.  I found this entertaining, short history of retirement in the New York Times archives and there learned that it was not the retiree fighting for the right to drop out of the workforce back at the turn of the century:  it was drummed up by politicians, factory management, and even religious leaders (Cotton Mather for instance).  The retiree in many cases would have preferred to continue working.

I also found this website, The Next Hill, that was created for the sole purpose of debunking the retirement paradigm.  An interesting read.

So, I found I wasn’t alone in questioning the value of the practice of saving, saving, saving, hoarding, hoarding, hoarding in order to get to a point where you only hope you won’t outlive your money, because ten, twenty, thirty years of your life are going to be spent in leisure.

As with the pot roast story, usually changes in practices start out with good reason.  Back when modern day retirement began and became entrenched in our psyche a couple of things were going on.   We weren’t living much longer than the current retirement age, and there were economic dynamics at play such as the Great Depression and World War II which forced economic adaptation.    But as time has gone on, the consumer culture has raised the cost of living, and better healthcare has extended life, and now we are in a situation where our financial advisors are telling us we’re going to need at list a million dollars in our coffers if we want a decent quality of life.

But I propose that all that is smoke and mirrors.  Perhaps the more natural evolution into our golden years is to be productive as long as we can be, earning our daily bread as we go.

A lot of people are going to say, “Hey, retirement is my right!  I can’t wait to get out of this lousy job.   I want to retire as soon as I can. Are you proposing taking that right away from me?”

No, not at all.  But which is better:  to spend your life energy focused on a moment in time decades away, just to save up money so you no longer have to do precisely what you’re doing now?   Or would it be better to relax about the future, which will free up your life energy to focus on ways that you can live more fully now?

In my mind, the answer is obvious.

TLC has a series called “The Hoarders” which is quite sensationalistic in terms of showing people who have become obsessed and sick with the inability to let go of things.  Their possessions, both useful and useless, overtake their lives.  Do you suppose that if you think about those horrible images of hoarding (which we are so quick to judge.) and imagine that all that stuff–the garbage, the clothes, the clutter–is turned into dollar bills saved and hoarded for the future–do you get that same feeling of sadness for the one who is buried beneath?  Are we buried beneath our obsession with hoarding dollars for tomorrow at the expense of a free and uncluttered today?

In the next post, I’ll explore a few of the “yeah buts” as well a proposition from shifting our personal paradigms about retirement.

The illustration above was taken from The Next Hill, and the one at the left was taken from the blog Not Buying Anything.