If you were in Canada in the late 80s or 90s, you may remember this ad from London Life. One of the most successful campaigns of all time, every Canadian remembers, to this day, Freedom 55.
In fact, as we've endured a difficult economy, the slogan has spawned a legion of sardonic jokes among investors about being on Freedom 75 or Freedom 85 or Freedom 95. (Not among our clients, of course, who can retire whenever they want and are currently checking the blog from their winter home in St. Bart's.)
The phrase Freedom 55 conjures up in me a distant memory of a robust economy and incessant bull markets. The crux of the commercial was that anyone with half a brain could and should be able to retire as early as 55, if they did what they needed to do.
This phrase is a lie and no, this has nothing to do with cake or Greeks or budgets. The phrase is a lie for two reasons: our modern age and the sense of purpose.
First, our modern age.
In the developed world, a normal, reasonably intelligent person who avoids a NASCAR diet should live into their 80s, many will live into their 90s. Now, of course, there are exceptions and accidents happens but look around; if someone dies in their early or mid-70s today, we say "she was so young". It has become a creeping reality many have not noticed but the fact is 70 is the new 60, maybe the new 55.
If we assume that we spend our first 25 years getting an education, then earn a living for 30 years during which we buy homes, pay down mortgages, raise kids and put them through school only to retire and face, what, another 30 to 40 years of living off the savings from that 30 years of work? It is only the very well-to-do or those who expect a truly meagre existence who could ever afford to do that. Even retiring at 65 needs to be revisited as an norm. When life expectancy was that few people lived past their 70s, then a 65 retirement age meant a 10-15 period of retirement. Today, that same retiree may have finance himself or herself for 25-30 years and that's unsustainable, particularly in an era of low interest rates.
So, the math doesn't add up anymore. In fact, the very system collapses because not only can individuals not afford this, we are seeing governments around the world who cannot provide for a citizenry that spends more time sitting around rather than being productive. What every Republican and other government-hater seems to forget is this, our government is us. Especially if you're part of the baby boom and among the cohort currently retiring at a staggering pace of 10,000 people a day in the US, your government can't afford to support you forever because there are too many of you.
So, from a financial perspective, Freedom 55 was always a lie but it misled us in an even more profound way: it showed a guy running on a beach or contentedly sipping a Mai Tai in a gazebo or whatever, at peace with living off the fruits of a good life and enjoying a well-earned rest... that goes on for 35 years! Craziness. Living without a defined purpose, some reason to get out of bed in the morning is completely and quickly mind-numbing and soul-crushing.
Humans need to feel needed. As much as some may find their jobs tedious as times, they provide us with a specific task that must be accomplished as we work toward a larger purpose ie, raising kids, establishing a business, curing disease, eradicating poverty, doing deals, building a life. There is only so much golf one can play, so many books one can read or cruises one can take before even the most enthusiastic after-worker realizes, I'm fucking bored and looks for something to do.
No, the notion of retiring at 55 or 60 or even 65 will become a distant memory as our population continues to age and medicine continues to push the average age ever higher.
People will work, in some capacity, into their 70s with regularity.
Some of us are lucky enough to have engaging work that will gradually peter out (as we age, so will our clients...) and thus we have a built-in work slowdown plan but if you don't, start today to look for something. Walmart will not have enough greeter positions for everyone and come on, we can do better than that anyway.
If you plan to write, make sure someone will read what you produce by getting it published somewhere. If you plan to do travel and do photography, make sure you can do the occasional wedding. If you love your work, plan on doing it for longer than you expected. If you hate your work, find a hobby you can do that will pay you something. It doesn't have to be much but it probably needs to be something. If you are among the lucky few who actually can spend 25+ retired, my advice is find some cause to which you can donate some time, of which you may find you have an excruciating surplus.
I, for one, intend to return to my modelling career that I was forced to give up because of nothing more than jealousy but this is neither the time nor place to go into that.
Folks, we may not be here for a long time but it will sure feel that way if we have nothing to do. Let's roll.
Recent Comments