Which Version of Retirement Are You In?

Every few years we begin to see headlines proclaiming the latest “New Retirement.”  I have to admit there have been so many versions over the past 20 years that I sometimes get confused as to whether they’re talking about the “new retirement,” the “new, new retirement,” or the “newest, new retirement.”  In fact, it’s become so confusing that I’ve begun to label the various versions of retirement numerically, like software releases.   Do you know which version you’re in?

Retirement 1.0 – The “Original” version of retirement was created when FDR signed the Social Security Act in 1935 and extended into mid-1950’s.  During this time retirement wasn’t viewed as something to celebrate, but rather as the somewhat public recognition that as a worker, one had very little left to contribute to society.  With the full retirement age set at 65 but life expectancies (at birth) averaging 62, retirement was viewed as having one foot already in the grave.

Retirement 2.0 – As life expectancies increased into the 1960’s and ‘70’s, Retirement 2.0 became known as the “Rocking Chair Retirement.”  Entering retirement with somewhat better health than their parents at the same age and on average living just a few years longer, retirees in the 1960’s and 70’s had more to give but little opportunity to do so.  Social attitudes and age discrimination still left many retirees of this era relegated to the sidelines with little to do but pass the time.

Retirement 3.0 – Thanks to better health, “The Golden Girls” and a lifetime of contributing through FICA taxes to someone else’s future financial security, retirement in the 1980’s and ‘90’s began to be viewed as a “20-30 Year Vacation.”  The mantra of the age changed from “He who dies with the most, wins!” to “He who retires first, wins!”  Early retirement became a sign of career and financial success.  These became the golden years where your only objective was to enjoy the luxuries and benefits of a lifetime of hard work.  As such, retirement began to be divided into phases:

Retirement 3.1 – “The Go-Go Years”  The early years of retirement where you could travel, take cruises and do all the things you had always wanted to do.

Retirement 3.2 – “The Slow-Go Years”  Over time the thrill of traveling to exotic locations was replaced by the desire to spend time with children and grandchildren, friends, and to create and leave a legacy.

Retirement 3.3 – “The No-Go Years”  With the rise in Alzheimer’s and other physical ailments, concerns over health care and assisted living arose along with an aging population.

Retirement 4.0 – By the early 2000’s, 60 had become the new 50, and people were “retiring” from their primary careers with more gas in the tank and a strong desire to give back and continue to contribute in a personally meaningful way.  Certainly the idea of taking that dream vacation still exists, but it’s not enough. Retirees no longer (as if they ever did) want to sit in a rocking chair or waste their talents on endless rounds of golf.  Retirement became a second chance to follow your passion and finally do what you had always wanted to do.  Phrases like “second act” and “encore career” came into the social vocabulary as the ideal for those who had the financial means to pursue their dreams.

Retirement 5.0 – But with the “Great Recession” of 2008-2009, many people lost the financial means to pursue their second act.  Rather than retiring at age 55, 60 or 65 as planned, many 50-65 year-olds are recognizing the need to work longer to create the retirement they envision.  The desire to give back and pursue a personal purpose has not lessened however, leading many people to rethink the retirement goal.  Rather than spend 10-20 more years in jobs they’ve grown tired of, many Baby Boomers and even Gen X’ers are re-tooling, re-training and reinventing themselves to enter careers they truly enjoy with the idea of working those careers well past “normal” retirement age.

If you’re already retired, you probably recognize yourself somewhere between versions 3.0 and 4.0.  If you’ve not yet retired, you might be looking at versions 4.0 or 5.0.  In either case, recognizing where you’re at and what your expectations are can go a long way toward setting a realistic plan to reach the retirement you want and achieving your most important life goals.

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