Knowing When to Get Out

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any.  Dave is from Ontario and is working towards his CGA certification.

I had a lengthy discussion with a family member this weekend that I think personifies the difference between my retirement plans and those of a conventional member of society.  This family member was basically counting down the months they had until retirement (they are less than 3 years away) and I questioned them out loud why they just wouldn’t quit now (I was pretty sure they could afford  it).  They basically stated that their pension plan was “handcuffing” them to continue working and there were penalties to retiring early from the pension.

The discussion continued for a little while, but I could tell that we were not necessarily going to see eye to eye on this issue.  I explained that my goal was to quit working as soon as I was able to afford it, whereas they were arguing that I would change my mind when I got older and money became more important.  It wasn’t that I couldn’t see their side of the discussion, it was more that they couldn’t see mine – that I think I can find better, more interesting things to do with my time than work the rest of my life.  I would rather give up a significant percentage of my income now and then later, live on less and do the things that I want to do (most of which do not cost very much money).

The bottom line of this discussion and with many people going into retirement is that they don’t know what their expenses will be.  This family member believes that they need 60% of their current income, plus personal investments, plus CPP to live on when I’m almost positive that they don’t require much more than their personal investments.  I know that my spending patterns may change over the next decade or so as I approach retirement age, but I don’t think these expenses will increase significantly (double or more for example).

Looking at the discussion I had in a different (and perhaps more morbid) perspective, this person is in their mid to late 50’s right now, planning on working for another 3 years.  Current life expectancy is 81 years – I’m not sure I would trade around 10-15% of my remaining days working at a job I didn’t really want to do for money that I probably don’t even need.  Time to me is significantly more important than money.  I could find tons of stuff to do during the day instead of spinning my tires at a desk.

Right now, I’m happy with my job, but to a certain extent I still “need” it (or some money coming in).  When I get to the point where I no longer need this or any job I don’t think I would be so willing to trade my time for money as there is only so much time out there to do the things I want to do.

How do you decide where your spending cut-off is?  If you want to retire early there are probably some things that you’d have to give up that you could have had if you would have worked for another 15-30 years full-time.

7 thoughts on “Knowing When to Get Out”

  1. Perhaps it boils down to semantics, that it’s time to retire the word “retirement” in your personal scenario and come up with something else. I’ve heard people use the term “getting on with my life”, life of course being what happens when you’re not required to show up somewhere you don’t want to be on a schedule you didn’t choose while working for someone you can’t stand.

    The difference is that you talk about still doing things and/or work you like to do versus slogging away a job you’re not 100% into every day, which in the strictest terms is nothing near retirement, whereas other people like your relative think of retirement in terms of doing zip all day. These people have zero intention of doing anything that could theoretically bring in at least some money, but will still be continually paying out all the time for stuff they’re addicted to buying for the sake of buying and the resulting bills.

    The term “active retirement” doesn’t really cover what you’re talking about, either.

  2. Can you try 6 months or a year or two off and see how “retirement” feels? It may not be quite as good as you imagine. But time off now would be more valuable while you’re in your healthy prime and sharing it with your young family. And what if you’re hit by a bus and had spent all your time saving for the retirement you never get.

  3. This post has some great ideas on why people leave work. I was, by a set of very fortuitous circumstances, able to actually retire just past my 45th birthday. Did not win a lottery but many things came together. Whole point is, time! Time is the one factor you cannot save. The central question should be, ‘how do you want to spend the time you have left?’ Rushing to get to a work place, that you can’t stand, to be with people who for the most part you don’t care very much about, doing work which causes your eyes to close and your head to hit the top of your desk at 3.00pm from boredom every work day!! If you were a person involved in saving people`s lives each day and their was a real consequence to retiring, or you were involved in directing a large business interest that really held your interest or attention, then, that might be a different matter. Most of us simply work at places, where we can, to earn enough to exit the work paradigm when we can. Forgetting health issues, the worst day being retired beats the best day of working, hands down, no question. I am with my wife all day! What could be better than that? Course, that might cause some people a lot of problems. But that, however, is another issue.

  4. I am a 46 year old woman (unmarried, no children). I left my last job 2 years ago. I live a frugal life and am able to get by on what I have saved from the years I have worked, and by my own calculations will be able to do so for the rest of my life. I LOVE not working, love the fact that I am in control of how I spent my time. I have absolutely no desire to ever get another job, or even “work for myself”. I don’t want to sell anything, I’d rather give away my time for free (and I do). There is only one problem, and that’s the reaction of other people, or at least what they think, even if they don’t say it. They don’t understand what I do all day, how I can be fulfilled without work. Unfortunately this does bother me, because the implication is that I am a lazy and uninteresting person. If truth be told, it bothers me so much that I feel I have to “unretire” even though I neither need nor want to. We are so defined by our jobs!

  5. Sounds like the other people are envious and wish they could do what you have but don’t want to put in the frugal effort. Obviously you are not lazy because you did put in the effort and you are interesting because you are doing what you choose with your life and enjoying it rather than wasting it starting at a wall.

  6. I read the article in the Toronto Star, this morning. I have been following the articles but only remember them vaguely. I don’t believe your investments went up 29% in one year and I don’t believe you paid $39k off your mortgage. If you are the investment expert you purport to be, you should borrow against the value of your home, invest it, (while writing off your interest you pay). With astronomical returns you will meet your goals much earlier. However like I noted, I don’t believe you!

  7. @ Bob,

    I can’t make you believe me. All I can do is provide the information and answer your questions. I never said I was an investing expert anyone on this blog…actually if you read the disclaimer on the bottom right hand side you will not I claim not to be that great. I just happen to have a good year. It happens once in a while to people. Yet like I said in the article on the Star: I fully expect some bad years as well.


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