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Definition

Retirement

What is Retirement?

Retirement refers to the act of resigning from employment and discontinuing to take new jobs, typically because you may have come of age.

Understanding Retirement

The term "retirement" refers to the act of simply stopping work or ending a person's professional engagements. The terms "retirement" and "monetary freedom" are frequently used similarly. Both of these are possible if you have sufficient money in savings, investments, and/or a plan to support your daily expenditures.

In most cases, retirement entails departing the job completely. Based on their personal finances and capabilities, the person will probably join in other hobbies once they have left. For example, several individuals value trips, while others love to spend family time. 

Many individuals are compelled to spend time with their families, while others are expected to switch into group homes due to poor health. The conventional age of retirement was 65 though the legal age for that varies, and most individuals live for 15 to 20 years after that (on average).

When creating a personal savings strategy, it's critical to consider how much earnings you'll require in retirement to survive and thrive. Expenditures as to whether or not a monthly lease obligation will be made, but again, how much would be paid, must be addressed. To enhance their overall lifestyle, retirees will generally require 80% of their income.

Practical Example

Diana was the Product Head of a multinational company for almost 20 years. It reflected the background of her financial plans as she reached her retirement age. When she started working in that particular company, they already had an Employer-sponsored retirement account facility. Therefore, every month she kept a specific percentage of her salary in that account so that she would enjoy her time after her retirement without any financial struggle. 

In Sentences

  • Retirement occurs when individuals have reached an age or they stop working for personal reasons.

Webster Dictionary Meaning

1. Retirement
- The act of retiring, or the state of being retired; withdrawal; seclusion; as, the retirement of an officer.
- A place of seclusion or privacy; a place to which one withdraws or retreats; a private abode.
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