It’s been almost a year and a half since I left my job and just now I feel like I’m finally hitting my new groove to my life.
That might come as a bit of surprise to some people, but I would say honestly it really does take some time for you to adjust to your new retired life. The reason is you tend to go through a series of phases when you retire.
The first is the most obviously: the initial high of being retired. Let’s face it when you finally leave work after all that planning it feels fantastic. Your walking on air and the world seems to be brighter and happier. That phase can last anywhere from days to months or if your really lucky up to a year or so. Then it wears off and while nothing has really changed you start to think:is this all retirement is?
Ah welcome to being disillusioned. The next phase of your retirement. Here is where things start to go wrong and you often don’t know why. I personally hit this phase in six months (as you can see here). It was a crappy place to be. You can feel unhappy, anxious, lonely, and even in more severe cases outright depressed. I personally never got that bad but yes I did hit a low spot there where I was seriously doubting my decision to retire early. And yet oddly enough this phase of doubt doesn’t really get talked about all that much. What causes it? Basically you are missing things from your work life and you didn’t really understand how important they were for you life such as: a structure to your days, work friends, a sense of contributing to something bigger than you, and even goals with feedback on how well you did on your goals.
Yet after that low point you have a choice. You can give up and get a job again and return to something like your old life. Or you can push forward to building your new retired life. Here is where you start to make adjustments to your new life. You can add new activities, more social interactions, and even more structure to your life. You can search to do something you find meaningful and gives you a sense of progress on a goal. And know this search might take some time but don’t give up on it. Then finally after a time you will hit your new groove.
Which brings me back to where I started this post. I finally have a bit of routine to my life that makes me happy. I’m not bored or lonely. I feel productive working on writing material for my book which matters to me. I’ve finally built a new identity of the retiree not the worker without a job that I started at after I left work behind.
There is a long process to get to this point. It doesn’t come easy and while it can take years to get to a new groove it is possible. Just stay the course and give yourself some time. After all, you are retired right?
So retirees, how long did it take you to find your new groove?
This might sound odd but I am grateful for 2018 being a crappy investment year. Yes, you may now say: WTF?!?!
I think perhaps my greatest fear about my early retirement was the markets would go the hell after I retired and then I would be forced to go crawling back to my old workplace and beg for a job. Yet after that partly coming true in 2018: the bad stock markets part. I realized that I don’t have to go back to my old work at all. I still have a lot of money saved up, I can still live my life and find other means of making money that don’t involve my old job.
In short, I faced down perhaps my biggest fear about my early retirement and realized the greatest gift about early retirement isn’t really about having all this time off. The greatest gift is the choices that come from having financial stability. I have time to consider my options and try other things to make money. I don’t have to reach for my old career for a solution if I don’t want to. Simply put: I’m not limited by my previous choices in life.
Most of our adult lives we end up bound by our previous choices. If you buy a car you end up bound by your payments for it. Or if you buy a big house, you also end up bound by your payments for decades. And so very slowly you bind yourself to all these chains of monthly obligations that keep you at your job. You can’t quit without having another job lined up because your payments consume so much of your money each month and you don’t have much for savings.
Yet going for financial independence you in fact create the inverse of that situation. You pay off your consumer debt and you get more choices. You can invest a hobby like beer making to help save more in the future and still enjoy life. Then you pay off your mortgage and get more choices. Do you want to go part time instead of full time now your mortgage is gone? You save and invest your money and you get more choices. Do I really want to apply for a job in another industry? Until one day your investments earn enough you don’t have to go to work each day and your choices explode into a millions of pathways for you to choose.
Now this sense of freedom can be terrifying at first but over time you choose the life you want to live. I choose to write on this blog because I enjoy helping others get closer to early retirement and help those to adjust to life after retirement. I choose to help out at my kids school library because I get to spend an afternoon each week in a room just full of books. I choose my life one thing at a time because I enjoy them not because I need to pay my bills and I’m not afraid anymore.
So what is your greatest fear about early retirement?
Well that was interesting. I generally ignore the stock markets most of the time except for my monthly net worth posts where I login to my accounts and check the balances. Yet even the current media coverage on the stock market decline managed to pierce my fog of ignorance a bit earlier in the month than I’m used to. So yes, the TSX index is down like 10% or more from its recent peak.
First off, I don’t panic. In fact, I go back to my previous notes about my emergency plans and what the trigger is. You know that plan you wrote down when things were going well and you were calm and rational…unlike now where your mind seems to be moving like a squirrel on a double espresso. And there is black and write is my trigger point which is 10% decline in our portfolio, so while my TSX index is down over 10% I will need to check if my portfolio is down that far yet. Given my bonds I doubt that the damage will be that bad but I will confirm that tomorrow.
Yet the timing of this does suck. I was supposed to be re-balancing my portfolio next week and selling some investments to provide cash for next year. So what do I do? Well looking at my emergency plan the answer is simple: nothing.
Pardon?!? Yep, the answer is I’m doing nothing. I’ll just sit back and wait until the US mid-term elections are done and the world just calms down a bit. In the meanwhile I still have lots of cash in my savings account to live on in the short term and that gives me time to push off pulling money out of my investments until later on in November. Of course the delay is more psychological than real as I will be pulling money out the bond part of my RRSP. What I’m really delaying is the re-balancing of my RRSP accounts as I don’t want to re-balance to a stock market blip that will put my off my planned percentage split of investments five minutes after I finish the transactions.
So I might be “missing a buying opportunity” or “trying to time the market” by delaying my re-balancing but the fact is I wrote out a plan back when I was much more calm which said this: when your portfolio goes down 10% or more than you trigger the emergency plan. Don’t sell investments. Sit down, take a deep breath. Cut back on optional expenses (if you feel the need to do ‘something’). Use your slush fund to pay expenses in the short term (if required). Keep the long view and consider your options: perhaps pick up some part time work or a contract position and consider using debt as a medium term measure if the decline goes on a for an extended period of time. Keep in mind, you are in this for the long run so don’t do anything stupid in the short term. Sit on your hands if you have to but DO NOT touch that ‘sell’ button.
See “rational past me” knows “stupid panic current me” very well and wrote out just what I needed to hear: don’t do anything. Sit tight and if you need to do something work on something to give you some income or perhaps look at your spending in the short term to give yourself a sense of control in a chaotic time.
That is the real value of writing out an investment plan. It doesn’t have to be long or complex but it should be your ‘go to’ document when things hit the fan and you don’t know what to do. So what does your investment plan say to do right now? Or how are you reacting or not to this stock market decline?