What is Retirement?

It is a stage when you do not do any WORK to earn money. The other way to look at it is to say ‘your MONEY accumulated is enough to feed you and meet your other needs – from a combination of income and capital gains’.

So for a working couple, when is the Retirement complete? Well, well there are a few stages when you go :

Let us say you are in your late 20s and want to retire in your mid 40s. It is difficult to be more ambitious given current life styles…

1. Both husband and wife working: earning just enough to pay for housing EMI, school fees, car payments,…etc. and saving a small amount of money for retirement.

2. H and W working, having a surplus and investing the surplus in nice assets which give a REAL but volatile return.

3. H and W working, creating extra income and H starting to earn some extra money from his passionate hobby. Could be photography, web designing, SEO, copy writing, ….etc.

4. The Income from H’s business, dividends,  and W’s income is now enough to pay for all the expenses

5. H leaves his job!

6. W starts some side business – H taking the burden of running the house physically too – as he is now self employed.

7. W’s business income is about 50% of her salary income….and she is feeling confident.

8. H’s business is doing well, investment income is flowing well, W leaves her job.

9. NOW you have really retired.

Retired means you have created a few sources of income – in this case 3, you are working for yourself AND YOU ARE happy. No soulless corporation chasing you….all EMI over, a nice corpus in well allocated assets, having rental, dividend and interest income ENOUGH TO take you through a simple life. Money flow coming from both BUSINESSES that you enjoy (hey you are retired, but working in jobs that you enjoy!)…

this is the retirement transition…


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  1. re·tire·ment

    1.The action or fact of leaving one’s job and ceasing to work.
    2.The period of one’s life after leaving one’s job and ceasing to work.

    What I noticed from this article that there is no such thing as “retirement”. Just a change of job that gives a “feeling” of retirement. Continue to actively work and earn money as long as you can , alive or dead! I guess you do not agree with the spirit / idea of retirement. 🙂 [seriously who has a passionate hobby as SEO???]

    Why can’t there be a corpus and investment/asset alocations with a suitable lifestyle that is good enough to last for 50 years? 🙂

  2. Hi SR,
    I understand what you are saying is textbook version of retirement. Just notice that lot of businessmen who have wealth for many generations still working…. I could think of two main reasons:
    1) They like/enjoy what they do EVEN if it is not directly realted to money but for socializing, self-reliant, etc…
    2) Even if they stop what they do for any reasons, there is ZERO financial implications.
    That is ‘Retirement’ i.e, ZERO financial pressure throughout your life, irrespective whether you are pursuing hobby, working in NGO, just talking gossips and kill time, travelling to exotic places, working for social cause, working in job which you always dreamt, etc.,

    That is why Subra is telling us atleast get a hobby to survive after 58th birthday 🙂

  3. I agree with the definition of retirement here. Moving from doing things that we may not like to doing things that we like which also gives money for our needs. We cannot simply sit at home forever without an active hobby.

    A pre-requisite for this could be to have diverse income streams like FD, Annuity, Dividends, Tax free bonds, rental income,MF’s etc..

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