Tenting in Retirement

On Friday, I took my three kids camping. It was a “fathers and kids” camp, so my wife (gleefully) stayed home. I went grocery shopping, packed, loaded the kids into the car and, as I left the city, thought of all the things I had been meaning to bring but forgot. I forgot a plush toy that I was hoping would help my 3 year old get to sleep, I forgot a box of crackers for late night snacking (but I remembered the marshmallows!) and I forgot my own pillow. I didn’t even think of bringing band aids, and it’s a good thing another father had a supply and was willing to share.

It occurs to me that retirement, or rather leaving your job, is like leaving on a camping trip. Retirement planning is like making a packing list. There are some things that you need to prepare, some things you’ll forget and some things you can’t plan for. It’s also possible to get so carried away in preparing that you never leave. What if, instead of taking my kids camping, I had decided to get a job, earn money and save up to buy a super-fancy RV or, better, a resort hotel?

There are two ways to approach the retirement decision. The more common is to wait until you turn 65, then try to figure out what you can afford. In some ways, that’s how my camping went. I borrowed a tent, grabbed our air mattresses and sleeping bags, bought some food and roasting sticks and left with a change of clean clothes. From that point, we had to make do. We had a lot of fun with sticks, rocks, fire, water and friends. I’m not sure that the families that came with tent trailers or RVs were any happier than we were.

The other possibility is to plan the bare minimum type of life you’d like to have in retirement. For me, I don’t mind continuing to cook my own food, shop sales and travel only once a year (or in a tent). An important step is to add a margin of safety of at least 10% to the minimum. There will always be unforeseen issues, but resourcefulness and some saved cash should be able to address most of them. As soon as you have saved and invested to produce the minimum (+10%) income you need, you’re ready to wave goodbye to your day job.

But… what if? Insurance salespeople play up fears in order to sell their product, but financial planners also tend to be cautious in planning. What if you are injured? What if you become ill? What if you live longer? What if you need long-term care? On the other hand, what if you die two weeks after you retire? That’s not to say these aren’t good questions, but if you spend your whole life planning for every possibility, you may never be able to enjoy your retirement.

I’ve heard a number of anecdotes about people dying within a year of retiring. That’s one reason I would rather have a less extravagant retirement and start earlier. When I forget to pack stuff for camping, the solution is to either go without or buy (or borrow) what we need. In life, I can either do without or go back to work. For now, I’m enjoying the trip.

How do you plan for potential problems in retirement? Would you rather retire earlier with less security, or later with more certainty?

6 thoughts on “Tenting in Retirement”

  1. that is a very tough question that I haven’t been able to answer. I am on track to being financially independent by 30, but I know that I do not want to “retire”. However, I have instead been plotting what projects to work on or what other education or careers I can have. If I have 30 years to learn various skills (law, accounting, car maintenance), I’ll become much more self-sufficient … so that’s the goal for now. IMO that will give much more certainty simply through understanding. And a healthy safety margin will help, too.

  2. It also sort of irks me that we’re always told to plan for all of these potential downsides / problems – but what about planning for some unexpected great things that happen?

    I love winging it when I travel too Rob – except in a fancy (small) RV. 🙂

  3. I just turned 40 and our net worth is approaching 1.5 million. I know that I could probably stop work tomorrow and things would be more than okay… especially since my wife has no intention of quitting anytime soon – and she makes a very tidy 90k salary. Yet, I keep working – for now – in order to boost our nest egg further, to have “more than enough” , in order to cope with whatever challenges my lie ahead.

    My greatest nightmare would be having to go back to work because we underestimated what we need for ER. I simply don’t want to stress about money down the road. So, to answer Robert’s question – I am working a bit longer than I really want to in order to increase the likelihood that our ER plans will succeed.

  4. Jon, I wouldn’t disagree with your assessment of your situation. I simply try to ask: How much is enough? At the same time, it doesn’t sound like you’re rushed to retire as early as possible, so enjoy the social aspect and the challenges of work while they last.

  5. I built in a large cushion, or surplus, in my ER plans. This assured me of being able to easily maintain my spartan, LBYM lifestyle I always had. My cushion included a month-to-month surplus in my budget (for smaller, unforeseen expenses) as well as having a slush fund or two out there I could tap into if a larger, unforeseen expense arose.

    Another part of my ER plan was to be able to live off only 2/3 of my total portfolio, as the remaining 1/3 is in a TIRA I cannot access until I turn 59.5, 10 years from now (and 14 years after I first ERed).

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