Why Saving for Retirement is a Bad Idea
For the purposes of this article I am going to ask you to pretend that saving money is not the best idea. In fact, I am going to encourage you to spend. Have I lost a few screws? Certainly not. At least, I don’t think so. There is a catch.
Saving It Til You Die
There is an elderly gentleman by the name of Carl Pohlad who owns the Minnesota Twins Major League Baseball team. The man is, by all accounts, a billionaire. He has more money than he could ever possibly know what to do with. He is hated by just about all Twins fans because he will not help the team sign proven veterans to keep them in contention year after year. The Twins, a financially strapped and extremely thrifty team, rely on a strong farm system to develop the homegrown talent necessary to compete year in and year out. They have made the playoffs four times since 2002, but have never made that extra push to get to the World Series. Many Twins fans will tell you that all Mr. Pohlad would have needed to do is shell out a small fraction of his net worth and the Twins would have world champions (perhaps more than once.) He could have been loved by the whole state of Minnesota.
Don’t be like Carl.
Deferring Your Life
Tim Ferriss, the author of The 4 Hour Workweek, talks about a group in the workforce he calls “deferrers,” who are basically people who work their whole lives, putting their free time for vacation, family, hobbies, and travel off until they retire. He argues that this is a big problem for individuals who have to suffer through years of putting off their lives for their jobs, finally reaching retirement age and realizing that they let the best years of their lives waste away in an office. I agree with him.
Here is my argument. The inherent problem with the model “work, work, work, save, save, save, then retire” is that you only get to reap any sort of reward for your efforts when you are almost too old to really enjoy it. After working hard for 30, 35, 40 years, you are no longer going to be able to unplug from the working world. You’ll have spent more than half your life as a cog in a machine. Many of your dreams, goals, and desires will have long since vanished, replaced by deferment to drudgery, sameness, monotony, conformity, and years of coping with the loss of your life.
The worst part is that given today’s volatile market and grim financial outlook (at least in the United States) there is no guarantee that a pleasant retirement will ever come. You’ll have been working hard, putting off your life for nothing!
The Alternative
If you can find the way out NOW (it’s never too late) you can have your life back, and nurse your desires back to health. All the things you have wanted to do (travel, explore, create, spend time with family, help your community etc.) can be financial possibilities in the PRESENT. You just have to make it happen. Read my entry Making Your Escape From Employment for some ideas on how to get started.
Saving is only good if you know what you are saving for. If you are saving for retirement, what are you going to do when you retire? Are you going to take a world cruise? Are you finally going to get to travel? Donate to charity? Help support a pro-baseball team? Finally get to spend quality time with your children? Take Tai-Chi classes?
You don’t need to wait until you are 68 to do these things. You can do them now, while you are younger. You just need to find the way out of your job (or negotiate for some days where you can “work from home!”) It is important that you continue to nurture the “you” who exists outside of your job. What you do for a living does not have to define who you are. This is why I hate the question, “what do you do?”
Don’t let self-doubt or the dreaded “shoulds” get in the way of creating a better life for yourself. You’ll probably encounter a lot of resistance from others in your quest for freedom. This is totally expected, because people will cling dearly to their imagined, self-imposed prisons, defending their lifestyle of “sacrifice and work ethic” to the death. Misery loves company. With your goal of freeing yourself, you become a threat to the establishment. I deal with this occasionally myself.
Remind yourself daily that it is the deferrers who often end up like Carl Pohlad. They put off their entire lives and save, save, save until there is nothing left. They miss out on a lifetime of experiences and no longer know who they used to be. The years of “sacrifice” for the good of others is just laziness in disguise. All they can do is cling to their dollars and wish they were 27 again.
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Charting Your Voyage Out of the Rat RaceMay 12th, 2010
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Jessie January 7, 2012 at 6:03 pm
This article was well written and straight to the point. Very helpful in backing up my current way of life and reassuring. Thanks!