Forget the 3-Legged Stool—Here’s the New Model for Retirement Security
Recent years have been rich with stories chronicling the collapse of the three-legged stool—you know, that trite metaphor employed to define a secure retirement based on a pension, employee savings, and Social Security.
Well, we all know Corporate America sawed off the pension leg years ago in cutting costs for the benefit of Wall Street. And the employee-savings leg was always spindly, at best. Which has left only Social Security as the leg upon which so many retirees rely on for something resembling stability…though, now, politicians are outwardly declaring war on Social Security benefits.
Thus, we need to come up with a new strategy for retirement, which means a new metaphor. We have one support post representing Social Security, and we have another support post representing something that resembles savings, so what we need is something in the middle to bridge those two, to provide stability.
What we need to build is what I’m calling the Retirement Bench.
Think about a physical bench. Its stability derives from the fact that it has multiple points of contact with the ground, and support braces connecting them all, be that crossbeams or the plank on which you sit. Basically, it’s wide and it’s sturdy, which is exactly what you and I want in retirement—an income stream that’s wide and sturdy to support our lifestyle and provide a sense of security.
We can’t change the size of the nest egg we have when we hang up the lunch pail for the last time. And we have zero control over Social Security, other than voting out the scoundrels who seek to hack it to pieces in service to a bloated defense budget and useless pet projects.
But we do have control over the support braces of our bench that connect savings and Social Security.
And what are those braces?
Multiple sources of income.
I’m not talking about dividends or an annuity—though those are important, and I will address them tomorrow. What I’m talking about are fresh sources of income that flow to us in retirement. To the degree possible, we want a deep bench of income opportunities across a range of sources.
For instance, I just signed up at Fivver, one of the numerous freelancing websites that exists these days. And I’ve had an account at Upwork for about a year now. (Note: I don’t mention these as recommendations; they’re just personal examples.) In both instances, I take on writing jobs. But those jobs are coming from all over the planet: Australia, Canada, the U.S., Ukraine, and Switzerland, so far. Some are one-off gigs, others are ongoing relationships in which I do regular, if infrequent work.
I’ve been in contact with former newspaper colleagues, as well, and I’m doing freelance writing on the weekends when the opportunity presents itself for various newspapers and websites.
It’s not a career in the typical sense of what you and I grew up with. And my primary job writing for The Savvy Retiree and International Living remains my career. Nevertheless, it is a career in the modern sense in that I’m building a stable of side-hustle connections and income opportunities across a broad spectrum of countries, industries, and/or sources. It’s a very millennial approach to funding your life. And as retirees, or those of us who can see the door to retirement in the near distance, learning from this millennial take on life isn’t a bad thing.
Maybe I don’t write a walking tour this month, but maybe a newspaper or magazine buys that travel idea I pitched. Or maybe the real estate investment firm in Southern California emails me with a request for another blog post. Or maybe because of my high ratings on Upwork, some company somewhere in the world sees my profile and sends me a request for an income-earning opportunity I otherwise never would have known about.
Whatever the case, I’m building my Retirement Bench by putting in the support braces that will help strengthen my retirement savings and my Social Security one day.
And I’m not saying you have to be a writer to make this work. Not at all.
Maybe writing just isn’t your jam. Maybe you don’t have the eye for photography or the hand-eye coordination to be a graphic artist. But you still have a skill set of some kind—everyone does. And these days opportunities abound for exploiting that skill set, whether that skill set ranges from handyman to computer coder.
There are people making five and six figures running a dropshipping storefront online. Drivers for Uber and Lyft are earning $15 to $17 per hour, if studies of this are to be believed. You can teach English online or sign up as a host for Traveling Spoon, which connects travelers with those who want to teach local cooking techniques.
The point is: So many possibilities exist these days for earning income a bazillion different ways.
You won’t necessarily dial up a paycheck every day, or even every month, with each side-hustle. But every day, each side-hustle will be working for you so that when the opportunity arises, you have a chance to turn your skill into a few—or maybe many—dollars.
In doing so, you will have tossed out that rickety old stool and replaced it with a study bench you can rely on for your future stability.
Written by Jeff D. Opdyke