Regardless of your age one financial truth for everyone who is still working: the need to save for retirement. Sometimes however when you are young, retirement sounds so far away that you think it isn’t important. Maybe it’s time to view it as planning for vocational freedom rather than retirement.
What is the difference between vocational freedom and retirement?
For some there might not be much difference however for many the subtle difference is that vocational freedom means you no longer need to work, you are working because you want to work. You have built resources and have your expenses under control so that your income from employment is no longer needed, this is when you have achieved vocational freedom and that can be at any age.
How does it help to consider vocation freedom as the goal rather than retirement?
For many people, it isn’t they want to quit working it might be that they would prefer to do work that is more holistically rewarding rather than monetarily rewarding. That can happen at any age, not just as 65. Changing this focus often leads to a greater commitment to saving for that outcome rather than retirement, when we have a goal that matters we are more committed and make better decisions.
What are some of the steps to achieve vocational freedom?
It starts with building a plan and setting goals on all aspects of your financial life from what type of house you want to own, cars you will drive, types of vacations you will take and how many kids you plan to have. From these goals you can then determine what you need to save so that you can achieve vocational freedom at the age of your choosing.
Is this related to the FIRE or financial independence retire early ideas?
There are several common concepts however vocational freedom isn’t necessarily about retiring early it is just more about reaching a point that your work is about the work and not about the paycheck. FIRE is about reaching a point that you no longer have to work at all.
For those wanting to reach vocational freedom early, what are some of the key considerations?
First and foremost it is building sources of income that include savings, passive income streams and other ways to have monthly cash generation. Next, healthcare is extremely important to solve because it will be the biggest unknown expense later in life. Finally being comfortable with the lifestyle that fits your income is key. That’s why thinking of it as vocational freedom rather than retirement is important, one might choose to work into their 70’s or longer, not for the paycheck but for the difference they make and the relationships they have built.