Category Archives: Retirement

The Oddity of Inheritance

As some of you may know from my various posts over the years that I haven’t included any inheritance in my early retirement plans except as a back up plan. Why? Well on the surface a windfall of money later on in your life could be very helpful for your funding your own retirement but it sucks from a planning perspective.

Why? Well in short you can’t control the amount of money you will end up with and you also have no control on when you might ever get it.  So both of those uncertainties makes an inheritance nearly useless for you to be able to depend on for planning your retirement. As an example for discussion let’s say I may end up inheriting $100,000 when I turn 50 or $25,000 when I turn 60. In either case that would have vastly different effects on the math of your withdrawal rates (if you feel so inclined you can play with your own retirement numbers to see what I mean).  Yet you really can’t know when or how much you will end up with the inheritance as there are too many variables involved.   So in short I really don’t recommended including it at all when you are doing your planning for your early retirement.

Yet now we have a bit of an oddity. Depending on how good your own parents or your spouses parents are with money you might end up with a significant amount of money one day out of the blue.  After all a $100,000 dollars (or what ever amount you get) is nice regardless of when you get it. But what should you do with it if you are already financially independent and don’t need the money for day to day expenses. Now there is two main options that spring to mind: enjoy the money or use it for the next generation.

The first option of enjoying it is, of course, the easiest. You can invest the money and use the extra funds to take a few extra trips or do a renovation on your house because you want to. In effect it becomes fun money to do what every you like.

The second option of using the money for the next generation also has interesting potential because if you invest the money and you can either hand it over in lump sums at key points in their lives or gift the entire portfolio to them when you feel they are ready for it. This has some significant advantages depending on the amount of money per child.  For example, they could graduate post secondary with no debt and have some seed money to have them save towards a house down payment. Or you can boost your own children’s retirement savings when they are young they could give them a leg up on working towards being financially independent or using it to fund their own business or further their education or what ever you deem important.

Or another option, if you prefer, is you can save the money and play the really long game of investing your your actual or future grandchildren’s education and seed money for their retirement savings.  Thus building the capacity of your family line to continue to be ahead of the curve of most people when it comes to student debt and retirement savings.  The major problem of planning this long game is there is no guarantees that your grandchildren will continue the tradition to their kids.

For me personally I sort of hate to choose and might end up doing a bit of everything.  It all depends on the circumstances of how old I am and where my kids are at in their lives when my parents die (not that I’m looking forward to this but as I turned 40 this year I’m aware it will happen at some point regardless of when I’m ready for it).

So have you given any thoughts to your legacy?  What would you like to see your children do with their inheritance? Or what would you do if you received an inheritance?

The Early Retirement Spring

Well folks I feel a bit bad that I haven’t been writing much here this month but in all honestly I’ve been rather busy in my yard for a good lot of this month.

Classic retirement advice is to leave work in the spring or summer and I now understand that advice…it is really easy to stay busy in your yard and not feel remotely bored.  We planted the garden and the flowers, then did some lawn maintenance (racking and fertilizing),  getting the lawn mower ready for the season and I fixed some settling in my backyard patio and I’m trying to stay on top of the weeds that seem to be growing faster than I can pull them.  And I still have a few other projects to do in the yard which I haven’t even bought materials for yet.  Rather than cramming this into my weekends I’ve been able to just keep working a bit on these items each day which is a lot more of a relaxed pace.

I also have spent so much time outside this month I actually have a tan that is better than I usually have at the end of summer. My brother even got me back in the habit of running again so I’ve also been doing that three times a week which again gets me outside even more.  It’s really nice to be able to wear shorts almost ever day and enjoy a drink on the patio in the afternoon with my wife.

So overall I am loving the entire concept of the early retirement spring perhaps the only downside of it has been the fact that a lot of writing projects have suffered because of it.  After all who wants to spend time in doors on a computer when I can be outside either working in the yard, reading a book, having a coffee or going for a walk while doing an errand?

So how about you?  Do you spend way more time outside in spring?  If so, what do you enjoy doing?

What’s It Like To Be Retired

Despite the simplicity of the question:what’s it like to be retired? The answer is a bit hard to explain.

I think also part of the difficulty of explaining what it is like to be retired is the default pictures you carry around in your head of what it should be. For the ‘I never want to retire‘ crowd it would be someone just sitting around not doing anything. For the ‘entrepreneur type person‘ it would be starting a new business idea. And for the ‘burnt out employee‘ it would be an endless vacation but of course none of those are correct.

So the short answer is: it’s like Saturday all the time. You still have stuff to do, but you enjoy your day because you have time to relax and not worry about your job. The long answer is a bit harder to nail down.

I think in part the difficulty lies in the flexibility of the retired lifestyle. The flexibility also means that things shift around a bit more than people are used to. I’m not required to get up at a specific time or do things in any specific order. Other than the occasional appointment or event in my calendar I often had days at a time with nothing booked per say.

I also suspect that it is hard to explain because people really don’t grasp the idea of how much Parkinson’s Law applies to your time. For those of you that forget the law states that a given task will expand to the time allocated to it. So now some mornings I’m into a the book that I’m reading and can spend two or three hours just getting dressed, eating breakfast and reading while finishing the morning pot of coffee.

Another issue that comes up is the fact that I let my inner curiosity guide me a lot more in life now. I’ll read about something in the news and want to learn more. So I’ll do a few Google searches on it, read a few articles and/or watch some YouTube videos on the topic. This can depending on the topic consume an hour or two or even days as I request a book for the library and do further research on a topic. All because I’m curious and I can.

And finally I think one of the major issues people don’t understand is the fact you won’t want to do nothing. Okay, you might be a bit lazy at the start but eventually you want to contribute to something and accomplish something else. People really won’t do nothing for years at a time. The desire to create, build or achieve something is still there after you leave work. Each person will do things that matter to them and not anyone else. So progress on their given goals can be all over the map. So I know retirees that flip houses or run for political office or start a business. Some might become an activist for a cause or volunteer for an organization that matters to them. Then specifically for the majority of early retirees we tend to be self motivated people who tend to like to take on long and complex projects like getting to early retirement. So to suddenly do nothing for years on end is just laughable.

So with all that said about what early retirement isn’t, what am I doing with my time? The same things I enjoyed doing prior to retirement. I read a lot, enjoy some movies and TV shows (on Netlix or DVD from the library), cook, brew wine and beer, visit with my friends, do family activities like playing a board game or going swimming and of course writing on this blog and other projects. I just tend to do more of those things and take my time to enjoy the present more. I know hardly earth shattering but that is what I care about.

What do you plan to do in your retirement? Or what did you end up doing if you are retired?