Finance fishing boats

Why do some people never retire, even though they have plenty of money?

By Luke Smith

I often meet people who have saved more than enough to retire. In my role as a financial planner, I share with them numbers that show that if they retire today, there is a high degree of certainty that they will never outlive their savings. I often tell them that if they ran out of money, it would be because capitalism failed, and they might as well learn to hunt and gather.

Yet few of these people retire. According to the Pew Research Center, only 17.1% of people aged 55 to 64 are retired, while only 66.9% of people aged 65 to 74 have left the workforce. Moreover, these numbers have been declining for decades, although – unsurprisingly – there was a slight increase amid the pandemic. Since the early 1990s, people have been working longer despite rising household wealth and falling poverty rates.

Why do we work, seemingly voluntarily in many cases? My own father, who is nearly 70, still runs his one-man plumbing business, digging holes and crawling under houses, whatever the weather.

Often, if you ask people why they keep working, they have a hard time figuring out why. Still, I’m doing my best to find out why. Everyone is different.

In my experience, some people just like to be helpful. Many of us want to feel useful, productive and important. This is certainly the case with my father. I’m not sure he would enjoy his retirement very much. He enjoys working with clients, finishing a job, and putting in a hard day’s work. In my opinion, people like my father should continue to work if that is what they want. Maintaining a healthy life balance, while enjoying the rewards of hard work, are great reasons to keep working.

Others will tell me that they don’t know what they would do with themselves if they retired. I believe we should all aspire to retire into something. This is where hobbies come in handy. I encourage clients to remember activities they used to find totally engrossing. We’re talking about things like drawing, fishing, writing, playing music, reading, woodworking, golfing, painting, gardening, hunting, traveling, walking, or just spending more time with loved ones.

For others, it’s the all too common inability to recognize what is ‘enough’. Have we saved enough? Have we accomplished enough? This concept reminds me of the story of the businessman and the fisherman.

During his annual vacation, the businessman spots a middle-aged fisherman pulling in his boat after half a day, then heading towards a group of family and friends who are listening to music, dancing and drinking wine .

The businessman asks him: “Why did you finish after half a day? You could fish all day, catch more fish, sell more fish, buy more boats, hire more people, and earn more money.

The fisherman replies, “Why would I want to do that?”

The businessman says: “After many years of hard work, you could have saved enough to retire and then spend your days fishing for fun, listening to music with family and friends, dancing and drinking wine”.

The fisherman was puzzled. “Isn’t that what I do now?”

Some of us go through life without ever defining ourselves enough. It is a mistake. My advice: Be more like the fisherman.

This column first appeared on Humble Dollar. It has been republished with permission.

Luke Smith is a CFP professional and a practicing financial planner. He creates personalized financial plans for every family he works with across the country. Luke pursued financial planning to combine his two favorite passions: finance and people.

-Luke Smith


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10-12-22 0602ET

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