BY: DAVID RUSSELL, CFP®, CSA®
Vice President & Trust Officer | (601) 707-0008
Originally published in NorthsideSun.com August 5, 2023
In the fast-paced world of the 21st century, the concept of retirement has undergone a profound transformation. As we navigate the encroaching tide of technology, the pressures to increase consumption, longer life expectancies, and a fragile social security system, it’s time for those in their thirties and forties (and beyond) to challenge conventional notions of retirement. In this thought-provoking journey, we’ll explore the economic realities of our world today and hopefully inspire you to adopt an optimistic yet realistic mindset while planning for your financial future.
The AI Revolution
Welcome to the era of encroaching technology, where robots replace jobs, artificial intelligence becomes more prevalent, and entire industries undergo rapid transformations. While these advancements bring exciting possibilities, they also present challenges. As our careers become increasingly vulnerable to automation, it’s time to embrace a mindset of adaptability and lifelong learning. By staying ahead of the technology curve, we can not only secure our financial future but also find new and fulfilling ways to contribute to society. Always be working on your brand. Stay well-read and develop skills to leverage your knowledge. Focus on relationships and the things that make human connection the most valuable skill you possess, and least likely to be replicated by technology.
The Consumption Conundrum
The pressure to consume is stronger than ever before. Targeted advertising, social media influences, and a culture of instant gratification can leave us feeling trapped in a cycle of materialism. This pressure has a very logical explanation: 67% of the fuel for our economy is consumption spending by you and me. Economics 101 says that if WE do not practice ever-increasing consumption, our economy does not grow. If our economy doesn’t grow, it stagnates, falls into recession, high unemployment, and all sorts of undesirable consequences. How do we help sustain economic growth while at the same time, break free from this mindset and adopt a more mindful approach to our finances? By distinguishing between wants and needs, embracing saving over debt, and investing in experiences rather than things, we can regain control over our financial well-being and pave the way for a more fulfilling future. Because another truth from Economics 101 is that when we borrow to finance our consumption, the inevitable cost of debt will encroach upon our ability to consume in healthy ways that keep our economy growing.
Longevity and Reinvention
With longer life expectancies comes the opportunity for multiple acts in life. The idea of retiring at 65 and living out the remaining years in idle bliss is no longer a feasible or desirable goal for many. For those who continue to think this way, retirement simply becomes a thirty-year period of unemployment. Instead, we can embrace the concept of “reinvention” in our forties and beyond. By cultivating new skills, exploring second careers, or even starting our own ventures, we can embark on a fulfilling journey that seamlessly blends work, leisure, and personal growth.
The Social Security Safety Net
Let’s face it: the social security system is fragile. The stark reality is that it may not be able to provide the same level of support to future generations as it has in the past. Rather than relying solely on this uncertain safety net, it’s crucial to take control of our own financial destiny. By investing early, maximizing employer-sponsored retirement plans, and exploring additional income producing opportunities – such as becoming a paid online teacher, or even monetizing your skills on social media channels – we can build a strong foundation for our retirement years.
Not Your Father’s Financial Planner
I must be careful here, because at sixty-two, I am your father’s financial planner! However, my [much] younger colleagues and my own adult children are helping me see the world through their eyes and experiences, and there is a need for financial planners today to expand their toolbox beyond the basic financial ideas that worked for my generation. There are still immense opportunities for those who approach planning with diligence and foresight. By creating a holistic and flexible financial plan, setting clear goals, and regularly reassessing your progress, you can ensure a financially secure future. As the saying goes, “Plan or be planned for.” Life isn’t random, but a sequence of causes and effects that we get to set in motion to a large degree.
To conclude, rethinking retirement in light of the economic realities of our world today is not an easy task. However, by embracing adaptability, adopting a mindful approach to consumption, redefining the concept of retirement, and taking control of your financial future, you can create a life of financial freedom and fulfillment. Let’s face the challenges with optimism, sprinkling lots laughter along the way, as we navigate the path towards a life that aligns with our aspirations and the evolving landscape of the modern world. The key lies in recognizing that retirement is not just an endpoint but a new beginning—an opportunity to live life on your own terms and embrace the full spectrum. Yes there are forces beyond our control, and much of life will be lived in the zone of “Maybe,” but that is when the Serenity Prayer is something to always keep in mind: “Father, give us courage to change what must be altered, serenity to accept what cannot be helped, and the insight to know the one from the other.”
David Russell, CFP®, CSA® is Vice President and Trust Officer with Argent Trust in Ridgeland, MS. Argent is a leading, independent wealth management firm with thirty-five offices in twelve southern states. Responsible for over $40 Billion of client assets, Argent has the size and scale of a large institution, with the southern values and personal focus of a neighborhood office. For information, contact David at email@example.com or call 800.375.4646.