Why is Retiring So Hard?

It’s harder to retire than we’ve been told, and there are many reasons for it. 

Let’s start with what we see when we imagine retirement: unlimited time, travel, leisure, and the incandescent happiness that comes from not having to clock in, take that extra shift, answer to a manager, or deal with office politics. 

That vision is so new, it still has the tags on it. We’re really only two generations into a vastly different set of expectations for what life after work should look like than anything that came before. Pensions weren’t even a thing until the mid 1800s, and when they were invented they were designed to start paying out only once people were old enough that they were more likely to die than collect. 

Retirement is expensive and viciously individual (on purpose)

In Canada, retirement as a third act didn’t really establish itself in the public imagination until the early 80s, when what ended up being a 25 year long marketing campaign for Freedom 55 started. Coincidentally (except not coincidentally at all), it’s also when late stage capitalism, hyper-individualism, and austerity for the masses but not the shareholders bloomed, thanks to forty years of activism by economists like Milton Friedman and his disciples in the Chicago School, and the right word in the right ear that coalesced into the unholy triumvirate of Reagan, Mulroney, and Thatcher who systematically ground the collective gains of the post-World War II antitrust and welfare state into the dust of neoclassical economic orthodoxy that we’re still breathing in today like oxygen. 

The 80s turned retirement into a single-player game with a cutthroat philosophy of “your aging, your problem”. It made a good life post-work something you have to earn (if you’re a worker) and hoard (if you’re an owner). 

So one of the very obvious reasons retirement is so hard is because it’s so expensive for individuals working towards it on their own.

Retirement is hard even for the people who can afford it

But even people who have experienced the lucky combination of being healthy and able enough to work for a whole career at a good enough job with high enough income and low enough expenses and who have built up a portfolio that has benefited from the frankly insane profits corporations are extracting and paying to shareholders find it hard to retire. 

Their challenges are a little different for lots of reasons, mainly:

Complexity: it’s hard to retire because it’s usually a one-time thing that you haven’t had a chance to practice. Retiring includes making decisions about when to start getting Canada Pension Plan and Old Age Security. It includes deciding how much to withdraw from which account, and navigating the tax and account rules for income from TFSAs vs. RRSPs vs. non-registered accounts. It includes when to convert RRSPs and LIRAs to RRIFs and LIFs, splitting income with your spouse (if you have one), and deciding how to invest your savings to get the most out of them with the least risk.

Psychology: It’s hard to retire because you spent your working life understanding that putting money into savings is good and taking money out to spend is bad. That’s a deeply ingrained belief that can’t be flipped overnight. Even if you know for sure you have more than enough, you’re going to have trouble actually withdrawing money. Lots of very secure, well off people spend the first decade of retirement instinctively spending less than they planned to because it feels better that way. 

Disillusionment: It’s hard to retire because the vision of a worry free life after work has been sold hard, and stress doesn’t end with your paycheque. Things go wrong, the hobbies you looked forward to starting aren’t as great as you imagined they would be now that you have time to engage in them. Maybe you miss your colleagues, or the routine of getting to work, or the job itself. The truth about life after work is that anywhere you go, there you are, and we’ve been conditioned to experience our lack of total bliss in retirement as a personal failure. 

Purpose: It’s hard to retire because, sometimes, the work we do is part of our life’s purpose. Walking away from the mission feels like giving up a part of yourself. There’s real grief in coming to the end of something meaningful, and when the people around you don’t understand your grief it’s even harder to bear. 

Guilt: It’s hard to retire when you’re surrounded by people who can’t. When you’re aware of the lottery you won by virtue of your health, ability, family support, or the timing of your birth, and how the things that could have gone wrong for you really did go wrong for someone you could have easily been. 

Retirement is a team sport, actually

I truly believe that the more we make retirement and aging into a team sport, the easier it will be for everyone.

Yes, everyone. Not just the people who our current structures treat as if they’re disposable, but you and me and the luckiest people we know will be better off when we expand who is included in our definition of “we”. 

 It’s not a moral failing to have to keep working because you have no other way to feed and house yourself. It is, in the words of Naomi Klein, 

The consequence of economic and social systems precisely designed to produce cruel outcomes, systems that can be changed only if people drop the shame and unite toward a shared goal.

It won’t take any miracles to make the end of work less expensive for everyone. We have the theory and structures available to us already. 

It will take collective action and political courage to level the playing field between the profit makers and the rest of us. It will take fighting for people we don’t know, who don’t look like us or have the same background, assumptions, or history, as hard as we fight for ourselves. 

We have more in common with each other than any of us do with the people in power. Let’s start acting like it.