Comfort zone and risk
The purpose of work is to make a living and build savings for retirement. Once we stop working and start retirement, then what purpose are we doing "retirement" for?
The expected answer would be: to enjoy life.
And what does "enjoying life" look like?
The answer is different for you and me. Each to their own.
"Enjoying life" is different from "easy life". Easy means I do not go out of my way - I stay safely well inside my comfort zone. An easy life is great, but would it not be boring if it is easy all the time?
For me, it would.
On the other hand, stepping outside my comfort zone carries risk.
What if I fail? What if I lose my savings? What will people think of me? Who will bail me out? What if I cannot get back on my feet?
I do not know.
I think some sort of trust / faith is unavoidable.
Faith in the "system"
I first learned about this topic from reading Anton Podviaznikov's post - "non-believers". Retiring implies a certain level of "faith". Faith in the retirement benefits system. Faith in the financial system. Faith in the social system. Or for many, faith in the familial support system.
But as history has shown, sometimes those systems did not deliver. Sometimes they failed. A failure at such scale is beyond my control, obviously, but it is a scenario that is not of zero probability. I hope they don’t happen to you and me.
How would I mitigate this risk?
Diversify sensibly. Do not rely 100% on one source for retirement plan. See:
If you are very wealthy and not concerned with financial constraints, you can lead an interesting but easy life. I can only presume.
In my case, I have financial constraints. Thus I need to make choices.
Do I choose to stay safe well within my comfort zone? Or do I choose to step out of it? Do I even know the boundary of my comfort zone?
That last question is very important. I had always believed that I had no choice but to step out of my comfort zone. Not only while actively working, but also during retirement.
But it is also important to define what comfort zone means at the different stages of life. It does not need to be, and should not be, the same throughout my life stages.
Active income stream (from employment, business, etc) allows for extra safety net that is not present when retired. The definition of comfort zone should reflect that.
If there are children and/or dependents still to support, the definition of comfort zone should reflect that too. And other scenarios that might be unique to you and me.
So far I have ambled along not thinking about this. I intuitively understood that my risk profile continues to evolve, but did not connect it with my definition of comfort zone.
They are two sides of the same coin.
Returning to the question, what purpose will it be for me retiring?
Same as the purpose for me living, actually. Retiring is only a life stage. For me, it does not change the purpose of my life.
Different stage, different constraints, different activities, but same purpose.
Have a great day.
Disclaimer: Anything I share is not intended as financial advice; I am merely sharing personal opinions and experiences. The information is of general nature and you should only use it as a place to start your own research and you certainly should do your own due diligence. You ought to seek professional financial advice before making any decisions.