What is the Meaning and Concept of Retirement?July 13th, 2018
Retirement is one of the goals of every working person’s life. Go old and retire. We hear it so often. According to the dictionary, retirement is “to stop working at one’s occupation,” or “withdraw from one’s position or occupation or from active working life.” However, retirement cannot be achieved in today’s world without having the appropriate planning and funds in motion well before you reach retirement age.
Moreover, many people will use the terms “financial independence” alongside “retirement,” because one cannot exist without the other. Both statuses are achieved when you have garnered enough investments, savings funds, and pension income to cover whatever living expenses you have.
In short, when you retire, work isn’t something you have to do to survive. It’s something you do only if you want to.
The Start of Retirement
Retirement hasn’t always been something people did or aimed for. Up until the 1880s, people lived and worked until they passed away. Yet, in 1881, a minister president of Prussia, Otto von Bismarck, came up with the revolutionary idea of a government-backed financial support for the ageing members of society. Retirement. It took 8 years since the introduction of this idea, but in 1889, Germany created a system where citizens over 70 years of age could retire. Unfortunately for most people of the late 1800s, living to 70 years old wasn’t normal.
Around the 1930s, various governments were crating retirement laws and acts. Therefore, our concept of retirement in the modern perspective is actually fairly new.
There is actually no mandatory age in any country where you are forced to stop working. Most people shoot for around 60-65, when they can begin drawing on Roth-IRA accounts and other savings without penalties. In general, those who retirement before 60 years of age are considered “early.”
But keep in mind that the challenge is knowing when you want to finally retire. Some people never do, for a number of reasons. Some choose part-time retirement and work just enough to keep them busy. The choice is up to you.
Investing for Retirement
Achieving retirement is a financial goal of many, yet if you don’t start thinking about retirement from an early age, usually in your 20s and 30s, saving about 10% of your annual income, you might not be able to gain financial independence. Starting late, such as in your 40s, means you have to save about 50% of your income—and that becomes difficult when you have a family and other responsibilities.
Thus, if you want to retirement eventually, you need to do your research and invest wisely. Seek out counsel with a financial advisor to help you understand the concept of investing and which types of financial products best suit your retirement goals. Then, you need to monitor your investments. Again, a qualified retirement planner can help you calculate how much you need to save, what to expect from Social Security and pension plans, and so on.
Retirement is financial independence later on in life. You don’t have to work if you don’t want to, and you have enough funds to keep you comfortable for the remainder of your days. To retire, though, requires a lot of future thinking, calculations, and planning. So don’t wait another day. Start now, and retire earlier.