Early-retirement wannabe

RobStaffs wrote: »

We are led to believe a nice car, four holidays a year and other material possessions make for a good retirement.

I think that probably something that is inherent in society rather than specifically limited to those in or looking forward to retirement.

There are an awful lot of retirement threads out there that talk about how you need to achieve 75-80% of your pre-retirement income in order to enjoy a comfortable retirement. On the other hand there are (probably even more) blogs that talk about how taking a very frugal approach to spending in the route to early retirement and who shun every aspect of consumption.

I see things differently and essentially retirement (and early retirement) is about choices and expenditure is about being conscious about the reasons for the expenditure. Is expenditure an emotional prop for something which is missing in life or is it something you want /need. At the end of it there is nothing wrong with wanting stuff if that what's really makes you happy but (and this is the economist in me) there is an opportunity cost. That's what credit card companies live on.

I imagine our retirement expenses will fall considerably but thats because our lifestyle will change considerably.

The problem nowadays is that for any situation / problem there nowadays there is so much information on the internet and so many different view about the right or wrong way to do things. The challenge is sort the good from the bad and forming an individual opinion of how to best apply those views to your own situation.

With my 50th birthday approaching this Thursday I thought it would be worthwhile to reflect on a thread which I started almost four years ago and look to the future as to what comes next.
For many people retirement is a binary decision centered on financial security and whether they will have enough money to live on irrespective of what that might mean. “The number” thread has for some time focused on how much people need to live on but most answers seem to revolve around the minimum security level rather than on a particularly ‘desired’ income level or what some might refer to as a more comfortable retirement.

But what does a comfortable retirement look like?

I fear when we start planning for retirement (whether in our 20’s 30’s or 40’s) we see ourselves in retirement as our current self that is without the accoutrements of old age. I can’t remember the last time I didn’t have some ache or pain or was recovering from something or other – and I am a reasonably fit 49 year old! That has some consequences for retirement planning, firstly the obvious – what do you want to do and how long will you be able to do that activity to the level you would like? Secondly, a ‘comfortable retirement for me isn’t just about spending money per se, but whilst 20 years ago I might have been happy to backpack across Europe and sleep on a park bench, nowadays Mrs ML just wouldn’t get any enjoyment from that. But the key here is that you have to get the balance right between going when you have enough money and having the retirement you want.
I’m quite risk averse but other than waiting to reach 50 to retire for purely financial reasons (the vesting of some pension rights) I think we are now at the right point where we still have some very good years to look forward to and spend some time fulfilling an ambition to become a ski bum :j

On the other hand (from a financial perspective) I do think about a couple of things and those are 1) By retiring now I am sacrificing an awful lot of money (earnings) over the next 4-5 year 2) what responsibility do I have to those around me (children etc) to remain here to support them as they go through there next few years of getting set up. Those are quite strong motivations. I am more comfortable with the first decision point than the second as the first is simply a question of whether the pull (of not working) is stronger (it is). For the children the question is less clear and I’m sure this will play into the retirement decisions of many others. I hope the answer is a simple one – they will have no debt on leaving university, will have access to unlimited parental guidance (;-)) plus the safety net that at any point they can come home and (ultimately) a fairly decent inheritance. Whatever else happens is their choice.

So coming back to the opening statement on the binary decision. Finance is the main driver but what about those intangible life motivators? What’s important? What is our purpose? I met a colleague the other day who is 7 years younger than and has decided to quit. I asked him why and he said that someone had said to him three years ago to be sure that he had really found his purpose. He has spent the last three years thinking about that! ….and that got me to thinking. There is an awful lot of garbage talked about finding yourself (and most people will describe the process with a smirk using the “oh so you need to “find yourself” do you” kind of statement. There is also a lot written on the internet about how you need to have a retirement plan as to how you will fill you days. But I think the problem is this: Most of us live our lives on autopilot and the established wisdom is to spend your retirement flipping over to another autopilot – just filling in the days until death. I read this article (alright, I know its wikihow but it said something to me):

http://www.wikihow.com/Find-Yourself

So what did it say?

Well, it said to me that actually retirement should be the opportunity to get off autopilot and start to challenge what we want to be. It should be the ideal time as all of a sudden we become unencumbered from the pressures of making a living, performing the role of breadwinner, employee and so on. So, whilst I have some ideas about what I might do the challenge is developing an approach that helps me identify some of things that I don’t yet know are important to me.