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What is Retirement?

There is a battle raging in the financial community. The battle lines are drawn between “the retirement police” and the FIRE community. The question? What do you consider truly retired? What is your definition of retirement? I have read considerable posts on this matter and wanted to weigh in.

The Disclaimer, Retirement is Internally Focused

First, let’s get this out of the way. I disagree strongly with “the retirement police” stance. They go around critiquing those that say they are Early Retired. They point out the person has some source of income, and then criticize the FIRE writer as a fraud. Regardless of how I define retirement, I find it disrespectful and a waste of time to disagree with how an individual defines themselves. As such regardless of my personal take on retirement, I do not begrudge any an all members of the community from labeling themselves as such.

The following writeup is purely from the aspect of how I view retirement in respect to myself. I will use some examples without names to give my take, but any resemblance to another blogger real or imagined are purely coincidental. These are not judgements on anyone else positions. With the disclaimer out of the way let us proceed with the question.

Both Members of a Couple Needed to Equal My Definition of Retirement

Now I have seen many in the personal finance sphere write that they are retired while their spouse works full time. In some cases their spouse needs to work, in others their spouse wants to work. In either case I have a tough time labeling this as retirement for me personally. While my wife spent 6 months of the last year as a stay at home mom, her pursuit of such a step had nothing to do with retirement. We still needed and I wanted my current employment. So in my mind I can not in good conscience label her as retired, even if it had become a permanent move  (it did not). For me to truly consider myself in retirement both me and my wife have to be in the same state, since in my opinion the financial positions of my household are inseparable by household member.

The Definition of Retirement as Significant Change in Life Phase

But can we still work in retirement? Our Next Life argued a while back that if you continue to work but it’s not about the money that in effect you are retired. My problem with this definition is two fold. One, I already have a definition for this state, Financial Independence. Once financially independent you can choose to work, retire, work part time, run a business, or anything else. Two, retirement and choosing to work for money in my honest opinion are two separate things. If I work 40 hours a week today and 40 hours tomorrow and cross to financial independence overnight, then at least fundamentally my day to day has not changed. I still go to work in the morning and come home. Politics are still there, the good and bad of a job. I can always quit if I am financially independent. But if I do not do so, then it does not truly change my situation.

To me retirement marks a pass into something different from your career or work. It’s more of a phase of life where fundamentally your day to day, and that of your family should change. You no longer wake up on a daily basis and go to work, nor does your spouse. You do not have anywhere you have committed to be in exchange for delivering work. (I may make an allowance here for volunteer work). The form and function of your day has changed. Financial independence also has to present, otherwise we are more likely talking about either a gap or unemployment. But Financial Independence is not the only change needed.

The Limits of Work in Retirement

But what about part time work or side hustles? Here is where things get interesting. If you worked 40 hours a week and go to working a few hours a week your situation has fundamentally changed. I could make an argument that when coupled with financial independence retirement has been achieved. People like ThinkSaveRetire that dabble in a blog and some side projects while traveling are in my opinion retired. But there is a line. If you were to start a side hustle for 5 hours a week and it turns into 40 or a significant money maker then I believe you are no longer retired. Even if you are doing your side project or hustle for fun, if it crosses the line from a few hours a week to a principle part of your life in my opinion you are no longer retired.

The Definition of Work: Volunteerism?

But how do you define work? If I volunteered 40 hours a week would I still be retired? Well this one is a difficulty with my model. In theory volunteering can take the form of work. But I give it an allowance realizing that such “work” might more be about the help you provide others then either the work or the consistency. Besides I doubt I would commit to volunteer work that would consistently consume 40 hours a week, so it’s a moot inconsistency.

The Definition of Work: Hobby?

What about if I had a hobby that consumed 40 hours a week but made a modicum of cash? Well in my case my personality would not allow me to spend 40 hours a week every week on the same hobby. I personally have a mindset of needing constantly changing inputs and tasks. This is why I have my chosen career, every day is different and often not as expected. Routine will not work for me. As such again I don’t have to deal with this inconsistency in my definition.

Beyond my own perception I guess it really depends on the definition of modicum of cash. If I make 20 dollars on a hobby working 40 hours a week then I’m probably retired. If I make 20K dollars on a hobby working 40 hours a week, even if I do not need the money, then personally I believe I can no longer call myself retired. After all that 20K can significantly supplement my financial needs. I have not thought too deeply about where that dollar line would cutoff, but again I do not need to within my personal model as my future does not hold that scenario.

The Definition of Retirement is Personal

I realize a lot of people in the FIRE community will disagree with my definition of Retirement, and that’s fine. They are entitled to their own definitions and defining themselves as they choose. However the day I personally announce my retirement you can be clear I mean something like the above. After all, the definition of retirement just like what you do with it is yet another aspect of the personal of personal finance. It truly is your choice.

How do you define retirement? If you are similar to me where do you draw the line on amount of time worked or money received?


  1. Joe
    Joe March 5, 2018

    It’s a murky line. I work on my blog a few hours every day so that’s not really retirement. I guess it’s semi-retirement. I don’t like that it’s tied to the amount of money made. Why does it make a difference if I make money or not? Seems arbitrary to me.

    What about age? If I’m doing the same thing and I was 65, people wouldn’t have any problem when I say I’m retired.
    It’s tricky.

    Also, I’m pretty sure Steve (ThinkSaveRetire) works much more than a few hours per week.

    • FullTimeFinance
      FullTimeFinance March 5, 2018

      Very tricky question. If I expand it beyond myself I’m not sure any model really holds. I guess that’s the unstated point of this post. Retirement is what you make of it.

  2. Lily | The Frugal Gene
    Lily | The Frugal Gene March 5, 2018

    I can’t picture not doing anything. And once you learn how money works, there’s a lingering thought of monetization constantly. If I grew a perfect garden for fun, but I can teach others in a class at the local community college for a few hundred bucks then I would definitely do it. Then turn it into lecture tapes etc. I think retirement is just a empty glow word.

    • FullTimeFinance
      FullTimeFinance March 7, 2018

      Interesting, your response does make me wonder what the line is between one more year syndrome and your philosophy.

  3. BusyMom @ CountdownToTranquility
    BusyMom @ CountdownToTranquility March 8, 2018

    We are going to “retire” in May 2023. What we actually mean is this. Both of us will leave our current high paying jobs. However, depending on what the stock market does between now and then, we may not be FI. Since both of us cannot even imagine doing nothing, we have decided that we are okay with leaving our jobs even we are not FI. Whether or not we are FI, we will find some job, or some income stream to make us some money. May not necessarily be our whole expenses, but some money for a while (until we get fed up with that). In the process, we will get to FI sometime.

    What should I call this?

    • FullTimeFinance
      FullTimeFinance March 8, 2018

      That is a tough one. I’d call it exploring an alternate work life balance… 😉

  4. I think my line is “would you do it for free?” If I make money blogging when I’m “retired” but I’d still do the same thing even without the income, I’d consider the person retired. The second you start doing things you don’t want to do for money, or you pass on things you prefer to do to get stuff done for your “hobby,” that’s when it becomes work.

    • FullTimeFinance
      FullTimeFinance March 17, 2018

      Interesting distinction. Pulling at the thread a bit though, what happens if there is an aspect of blogging you don’t particularly enjoy. If you do that as a small percent of the overall hobby are you now employed?

      Appreciate the comment, it’s really an interesting subject to hear others opinions.

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