"How much money do I need to retire?"
"How much should I be saving per year toward my retirement?"
"Should I save for my kids' education first, or my retirement?"
If you're on a quest for financial stability, chances are you've asked yourself questions like these (and many more). Of all the juggling balls we try to keep in the air, retirement often seems the biggest.
But focusing too much on your retirement could lead you in the wrong direction. Consider these four big reasons why retirement is overrated.
1. Tunnel vision blocks other opportunities
The financial industry sometimes hails retirement as the primary goal of good financial planning. But "healthy finances" encompasses everything from paying off your debts to buying a home to preparing your children for college. Retirement is but a single (though important) piece of this larger picture.
You need to take into account all aspects of financial planning, and this could mean prioritizing certain goals over others based on your current life circumstances. If you're burdened with high-interest consumer debt, focus on paying that down as quickly as possible. This will free you to pursue other goals down the road. If you have three growing children, make sure you're saving enough for their college funds. That doesn't mean you should prioritize their education over your own retirement; it means your retirement shouldn't be the singular focus of your financial plan.
You can still save for retirement while going after these other goals. Make sure you don't get tunnel vision and focus exclusively on one goal to the detriment of others.
2. You shouldn't defer your dreams
If you spend a lot of time daydreaming about the things you want to do when you retire -- travel, read, exercise, paint, learn to play the guitar -- then you're guilty of dream deferment.
Many people adopt a "nose to the grindstone" mentality for the majority of their adult lives, assuming they need to be "all work, no play" so that when they reach that magical golden age, they can finally pursue their passions.
But who says you have to wait?
In reality, it's far better to start living now, in the moment, rather than deferring all enjoyment to a later date. You don't know what your "golden years" will bring; you may not be healthy enough to take those dance lessons or enjoy that European cruise. So don't put everything on hold until retirement. You may need to trim back your current working hours in order to find the time to pursue other passions, but it will be worth it. Neglecting the present is every bit as bad as neglecting the future. Find a healthy balance in the middle.
3. Not working isn't all it's cracked up to be
Many of us know someone who reached retirement age only to realize they weren't cut out for retirement as we traditionally define it. Plenty of people who have spent their lives working hard find the prospect of unstructured, leisurely days mind-numbing.
Our time-honored practice of working hard until we reach a certain age, and then never working again, doesn't work for everyone. Some people throw themselves into charity work after retirement; others take a part-time job to keep busy.
Rather than focusing on working like a dog until you're 65 and then doing nothing, focus on achieving a work/life balance that allows you to contribute positively to the world while also fulfilling yourself personally. It's a much healthier strategy, and it will allow you to find happiness whether you're 65, 25, or anywhere in between.
4. "Retirement" is a circumstance, not a milestone
Finally, retirement should not be an artificial cutoff date that has nothing to do with your ability or inclination to continue working. Rather, it should be the point in your life where you cannot (or choose not to) work anymore, whether it's due to health, family, or sheer lack of desire.
The age at which you reach this point in your life is a highly personal choice, and you can't always predict it. The best way to prepare for it is to live a life that brings you joy now while also setting aside enough so that you'll be able to live comfortably when you reach the point at which you can no longer work.