Retirement … it's what we've all been working so hard for.
Except maybe not. The retirement prospects for Generation X are not rosy at this point.
Between raising kids and caring for aging parents, paying off debt, and recovering from the Great Recession, our retirement planning has taken a back seat:
According to a 2018 survey from TD Ameritrade, 43 percent of Gen Xers say they're behind on retirement saving and only one-third of 39- to 53-year-olds expressed confidence in being very secure financially once they retire.
It’s not too late to get back on track for retirement, but it will take careful planning and discipline. It’s smarter to think of it as building your financial base rather than dreaming of an idle retirement, though.
The real question to ask yourself is, do you actually want to retire? Yes, you may want to do something other than what you're doing now, but do you want to completely stop working?
The current crop of Baby Boomer seniors are already turning retirement on its head. They’re in great shape, still feel young, and most importantly, many have no desire to stop working.
There's more. According to Joseph Coughlin, author of The Longevity Economy, the entire concept of “retirement” was fabricated at the same time Social Security was introduced in 1935. The idea was to provide assistance to older people, yes — but also to force them out of the labor market.
Who you calling old?
There’s nothing significantly “old” about the age 65. It was just a number chosen by economists back in the 1930s, when the job market focused much more on physical labor than our current knowledge and information economy.
Now people are living longer lives, and more importantly, gaining more active years, free of debilitating illness. Their biological age is much lower than their chronological age.
That means it’s time to think differently about aging, and specifically the idea of retirement.
For Gen X, the prospect of even greater longevity and vitality is bright, as long as we take care of ourselves now. So, it stands to reason that many of us will see no reason to stop working at 65, 70, or higher — if we’re still into what we’re doing, which is key.
Given the lack of retirement savings for many, this is a welcome ray of light. More immediately, there are things other than retirement that we should be concerned about as our cohort approaches the fifth decade of life.
Don't fear the robots, beware the humans
As we head into 2019, there is plenty of trepidation about the impact of artificial intelligence and automation on the employment market.
Human jobs will most certainly be lost in the coming years. If history holds true, however, many other jobs will be created from what’s been dubbed the Fourth Industrial Revolution.
For a lot of us, algorithms likely won’t take our jobs at all, but they will definitely change them. This has sweeping implications for the skill set you’ll need to succeed, whether in traditional employment, as a freelancer, or the founder of a product-based business.
So don’t fear the computers; let them help you perform better. If you have a corporate job, though, you definitely need to watch your back — from the humans higher up in the organization.
One of the more important keys to a successful retirement is being able to earn at least what you're making now right up until you’re ready to retire. Age discrimination, not an algorithm, is more likely to disrupt your career and earning capacity before then.
“We’re talking about the wrong issues,” says economic commentator and author Anne Colamosca. “Having a stable job with good wages is more important to most people than what’s in their 401(k). Getting to the point where you can collect Social Security and Medicare can be every bit as hard as trying to live on the benefits once you start getting them.”
In a sobering piece from ProPublica, data reveals that once you’re over 50, odds are the decision to leave your job won’t be yours. Although age discrimination is illegal, companies use layoffs and coerced “early retirement” to shed themselves of older employees.
When recently retired survey respondents are asked whether their retirements were “something you wanted to do or something you felt forced into,” the response of being forced out has risen steadily. It's gone from 33 percent in 1998 to 55 percent in 2014, which was the last year comparable figures are available.
The joke is that the best time to start thinking about your retirement is before your boss starts thinking about your retirement. But perhaps the smarter move is to avoid having a boss at all.
Eggs, basket … dropped
To me, the idea of being subjected to the whims of a boss or a corporate committee is much worse than the prospect of working past 65. Putting your faith in a single employer hasn’t been a smart move for our entire working lives, so why would it be a good idea when we’re older?
Spoiler alert: It’s not.
Why would you ever put your economic viability in the hands of a single source? Worse, that source is likely an organization that functions only to maximize profit, and will spit you out as soon as it thinks the bottom line will benefit from your absence.
Think about it in terms of basic investment strategy. Putting all your cash into a single asset is dangerous. You should instead diversify your portfolio to spread the risk around.
Or consider any corporation that you would consider working for. A business that depends entirely on one product or client is vulnerable to bankruptcy as market conditions change. That company would work hard to develop alternative revenue streams not only to protect itself, but to also (ironically) make it more attractive to employees like you.
Diversification is the way to think about your own livelihood. And it will likely be the way you have to approach it in the near future whether you want to or not.
Don't let that shake you — this can be a very good thing as long as you maintain the proper perspective.
The rise of the personal enterprise
Approaching your economic needs as a personal enterprise is that perspective. The term was coined in the book Unscaled by Hemant Taneja, and he means that the key to navigating the coming economy is to live an entrepreneurial life.
His use of “entrepreneurial” is a bit different than you may be thinking. Taneja is a venture capitalist who sees the full-time job disappearing, replaced by just-in-time contractual talent that operates via enhanced technology.
Instead of a crafting a resume to land a single employer, Taneja sees a mix of long-term contracts, short-term projects, side hustles, and other entrepreneurial products and services that you develop with the aid of AI and automation. In short:
Find the things you really want to do — the things you’re really good at — and market them to all comers.
Will this be a challenging shift for more job-oriented people? Yes. But it also presents an opportunity to craft a more meaningful set of activities that make you money, while providing greater flexibility to bake-in health and personal growth initiatives.
Even if you manage to maintain a traditional “real job,” all the current career advice says you’re still going to to have to perform like an entrepreneur to do well. The problem is, with just one change of heart (or lack thereof), that single employer can smash all your proverbial eggs. Meanwhile, the personal enterprise approach simply looks for a replacement egg to add to the mix that maintains your income.
For me, the best part of being a serial entrepreneur is not past successes or the prospect of future triumphs. Instead, it’s knowing that one way or another, I can always find a way to support myself and my family. Spotting ways to make money just becomes part of your DNA.
If push comes to shove I might have to do work that's not my ideal, but the self-determination aspect alone makes it preferable to the same set of tasks dressed up as a “real job.” As long as I have choices, though, I’ll always be looking for meaningful ventures that burden me with glorious purpose — while blessing me with money.
That, my friends, is the key to a long life worth living. And one you can continue to afford.