What Is the Pot Of Gold That Justifies Spending the Best Years Of Your Life Hoping For Happiness In the Last?

by Vinaya HS on April 23, 2012

in Finance

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One of the questions from The 4-Hour Work Week (note: there’s still some time left to participate and win a copy of the book) that really struck out was –

What is the pot of gold that justifies spending the best years of your life hoping for happiness in the last?

Déjà vu, because, a few months back, I had asked pretty much the same question when writing about the fallacy of traditional retirement calculations and had then followed-up on that post with this exceptional art of finance sketch by D –

An art of finance sketch depicting the fallacy of traditional retirement

I stand by all of those questions that I asked back then (in fact my conviction in them has only grown stronger). And then to add –

  • This problem is further compounded by the fact that the media is often plastered with ads (such as the one below) for traditional retirement that lure you towards that hypothetical pot of gold that magically appears out of thin air and falls into your hands the moment you turn sixty. But in a twist of fate, you then realize that due to some weird and arbitrary commuting (withdrawal) laws and fractions and compulsory annuity for the remaining fractions things don’t really add up to that pot of gold.

Image of an ad for Traditional Retirement

  • I haven’t invested even a rupee this far in any of those multi-decade pension (deferred-life?) plans and I don’t have any plans whatsoever to do so in future. Not even in the New Pension Scheme (which given the way things stand today could very well turn out into a No Pension Scheme).

  • Early retirement to me means voluntary paid/unpaid work be it of my own industry or for someone else (if you look around there’s an incredible amount of that available) and certainly NOT NO WORK or WORK FOR WORK’S SAKE (W4W as coined in the book)!

Finally, here’s another point from the book to ponder over –

[Traditional] Retirement as a goal or final redemption is flawed because most people will never be able to retire and maintain even a hotdogs-for-dinner standard of living. Even one million is chump change in a world where traditional retirement could span 30 years and inflation lowers your purchasing power 2 — 4% per year. The math doesn’t work. The golden years become lower-middle-class life revisited. That’s a bittersweet ending.

A commentary of thoughts running in my head…




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{ 4 comments… read them below or add one }

Rakesh April 23, 2012 at 10:32 PM

@Vinaya,

Good one, i think by the time we retire in 20-25 years even 3 crores would not be sufficient.

pattu April 24, 2012 at 9:25 PM

I am against these tailor made retirement plans. But the bottom line is one must have enough corpus to retire whether it is early or late. So whether one likes it or not one will have to work until they have enough whichever way they invest.

“most people will never be able to retire and maintain even a hotdogs-for-dinner standard of living” This is true because of spending/saving practices and absolute earning. This doesn’t mean having retirement as a goal is incorrect.

I think the use of deja vu in the sense that you have used is incorrect. I understand what you are trying to say but that is not deja vu.

Vinaya H S April 25, 2012 at 12:41 PM

@pattu –

Good to see a comment from you after quite a while! Perhaps “flashback” would have been a better choice of word. :-)

But one of the popular online dictionaries defines déjà vu as something overly or unpleasantly familiar.

pattu April 25, 2012 at 12:44 PM

déjà vu refers to a current event which resembles an event previously imagined. Since ‘D’s sketch is real it cannot be déjà vu. This is a common mistake.

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