Am I There Yet?

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.

Last week, @postsecret linked to an article written by a palliative care worker who shared “regrets of the dying“.  It was a very moving article where one of the 5 regrets that people  had (I think)  link to the early retirement crowd, “I wish I didn’t work so hard”.  To me, this is the main reason why my goal is to get out of the workforce sooner rather than later.

Although somewhat morbid, I think in general people tend not to think about their own mortality.  I don’t dwell on the fact that I won’t live forever, but I recognize that I only have around 50 years (hopefully) left to do what I want to do.  I would prefer at the end of my life to not regret the fact that I continued to work unnecessarily rather than doing things that I want to do.

The risk of leaving the workforce too early to live off of savings  is that I may run out of money before I die, or late in my life when I couldn’t make more (too old, or having unneeded skills).  To me, this is kind of a trade off – if you have a plan that has a reasonable (greater than 95% on FIRECalc) based on the amount of spending you’ve planned on with a decent emergency fund, I am more than willing to roll the dice on early retirement.

I would prefer to live an overly frugal lifestyle (compared to most people)  where I am in charge of all 24 hours of my day rather than give up 1/3 of that time at work.  Through work, or trying to get to some “magic” number, or full pension or some other goal based more on the fear of running out of money than looking at the significant positives that can be had by not working (namely more time to look after yourself and your own interests rather than other people’s).

So, rather than sticking around working until I achieve one of the goals above, I will probably end up taking a bit of a gamble around my retirement date.  Maybe I will have to cut my annual expenses significantly in retirement because my investments have crashed, but I would rather sit at home and read library books and get in better shape than sit at my desk an extra 5 or 10 years because I thinking  I need an extra $250,000 in capital for safety.

How safe do you need to feel before you’d leave the workforce?  Are you willing to gamble  in order to “get out” as early as possible, or do you have a goal that you are not willing to venture away from?

10 thoughts on “Am I There Yet?”

  1. I achieved total financial independence almost four years ago and waited to leave full-time employment until I did so. In retrospect, and after studying personal financial management intensely for the past decade, I came to the conclusion that I could have done things differently and achieved a better result sooner.

    First of all, total financial independence is a sort of over-kill for what many of us want to achieve–which is, namely, a more personally preferable mix of time spent earning money to support ourselves and the free time to do what we would rather be doing instead of earning money. You can achieve your own more preferable mix without first achieving total financial independence (TFI).

    In most cases, it is not the case that someone pursuing TFI does not want to work at all and few who do achieve TFI stop working for earned income entirely; I certainly did not. Instead I left the five-day, forty-hour workweek behind once I had the financial wherewithal to do so.

    But what I came to understand is that I could have achieved the freedom I was after simply by arranging my finances and cost of living so I could live comfortably on the income from a part-time job. And that is a much easier outcome to achieve than total financial independence.

    Best of luck!

  2. I like a lot of security, and if I just rely on my gut I’ll want a pretty solid full financial independence before quitting work – but I’m new to this community and I suspect my fears are at least in part a hangover from my upbringing and culture: Work forever! Retire with a full pension! Anything less means you’ll be a bag lady at age 80!

    So I am still learning and I hope to not be a slave to my emotions but rather to make a reasonable decision based on the facts and a realistic assessment of potential outcomes. As the previous commenter noted, many of us (me included) plan to work part time after FI so that builds in a lot of flexibility. But also some uncertainty!

    So far I still skew towards conservatism.

  3. interesting….but the fear of running out of money is a resonable one…no? Hubby and I want to retire in 2 years, at the ages of 56(which i still consider young..) We would love to go a year earlier but for us that last year, which will give hubby his magic number, is worth working. It makes a large difference in our pension, about $500 a month for life, and so we will do it and really enjoy the security of that extra income.
    The house (3 years old) is paid for, we have 2 vehicles paid for, no debt, the kid has been put through university (yipes…expensive everyone), hubs will have his pension, i have a small pension, we have money in the bank and it looks like we can do it with an estimated retirement income of between 55,000 and $60,000 a year until we are 100….or so the estimator says…that at a low 3% return
    We are happy with that…we can travel, play golf, go to the gym and enjoy the life we worked hard to get….and there were times when it was very, very hard.
    Hubby managed through many jobs losses and challenges and i lived through a life threatening illness…we are blessed and although we do not want to rush time that 2 years can’t come soon enough…

  4. I had a dollar figure in mind (which if all goes well I will reach next year at the age of 46) at which point I will be able to go part time for the rest of my life. I have no desire to just sit around the house for the rest of my life – I like having a job to go to, I’d just like to spend less time there.

  5. I like the suggestion of getting to a certain point and then working part-time; however, I have a couple of concerns. The obvious one is health insurance because it can be difficult to get on a group medical plan when you’re not considered full-time … although I guess an option is to sign up for an individual plan, perhaps HDHP or catastrophic, and have a decent enough emergency fund to cover any up-front medical expenses. Another concern that I don’t hear talked about very often is the level of personal fulfillment (or lack thereof) that a part-time job would bring. My impression of part-time work is boring/mundane/tedious with overall menial tasks and without challenge. How do you see your future part-time job in those terms? Even if it is less fulfilling, is it still worth it because it doesn’t suck up so much of your life week after week?

  6. I wanted to make sure I had a sufficient cushion, or surplus, in the early years of my projected ER budget (until age 60 when the first of my reinforcements such as unfettered access to my IRA) to make sure I could cover any moderately sized, unforeseen events.

    To make that happen, I was waiting for the value of my company stock (ESOP) to reach $300k in order to cash it out. That occurred in late 2008 just when I had found an affordable (at the time) individual HI policy so I knew I was set and could ER.

    I did not want my ER budget to be needlessly tight so the cushion gives me great peace of mind in my day-to-day activities.

  7. I also read the shared article you mention. I connected with it as it encouraged living your own life, rather than the one that is expected of you. Something that is key for frugal minded early retirees. As uncomfortable it was to think about it certainly focuses you on the important things.

  8. Preparation for retirement is about (or should be) more than just money. I will be retiring at 53 with TFI in three weeks but I do have the option to work part-time. It is not clear to me if I will want to exercise that option but it is comforting to know I can.

    When a person retires, they are not that “title” they once were – boss, manager, teacher, etc. That can feel like a loss. It may not be a good enough reason to keep working if one is truly “done” but it is something to consider as you leave. I know I need connections and I am making plans for that.

    I’ve heard both sides of the early retirement story … those were glad they did and those who wished they had not (and some who wished their spouse had not!). A gregarious retiree works at our local grocery store bagging groceries – seems to love people. He cut back to working four days/week instead five and that lasted two weeks … he is back to five days. Obviously, full retirement is not for him.

    Just some thoughts about “am I there yet?” …

  9. My personal “safety” number was $500k net worth before I felt okay to not work full-time or to stop accumulating. Thanks to good markets and good jobs, I’ve overshot that but don’t regret setting that as my personal “sleep well at night” target.

    What has felt odd to me these last 18 months of times of being part-time and times of not working at all has been the loss of the emotional investment that I had in my career. I really do kind of miss that feeling. But I’ve been trying to turn it into more of an emotional investment into LIFE itself.

    Dave, the other thing that I’ve noticed – and you might too – is that once you have all this time on your hands and very little stress, is that you start getting really creative again in thinking of ways to make earning a bit of money in a fun way. That’s another of the bonuses of pulling the plug earlier rather than later I think. You still have the energy and enthusiasm to do that kind of thing. I’m not saying that older people don’t – but I just think it’s a bit harder when you’re 65 to do something entirely different that’s a bit of a stretch than when you’re 45.

    I often think that one of the mistakes we all tend to make is assuming that the stage that we’re at in life right now is the one that we’ll stay at forever. A 30 year old that’s starting their career can sometimes just not imagine how they would want to stop working and assumes that they will have all the energy in the world for years and years, so saving can come later. Sometimes it takes a few crappy bosses or a couple of boring jobs to change your mind. Fortunately, most FI / ER oriented people don’t think this way – they want to give themselves choices.

  10. Katherine, I am Canadian so I am not worried about the health insurance costs so much. As for level of fulfillment, my current full-time job is already completely boring and unfulfilling – I can’t imagine a part-time job would be any less so. My job is a very small part psychologically of who I am so loss of my current title/position won’t affect me much – I just know that for myself, I get depressed sitting around the house 24/7, so I will need some activity such as part-time work. I look forward to spending more time with my pets and family.

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