Good point, but if its friends or retiring five years earlier… well… I would have decisions to make :)
We’re looking to move when or shortly after I retire for a couple of reasons:
- we’re currently in a HCOL (high cost of living) area, and
- most of my wife’s friends are going to move closer to their children
- our only remaining family has moved south in Virginia
Since my wife might need decent medical care, she’s said she wants to move to a larger city where it’s warmer and the cost of living is lower. So far the leading candidate is Richmond, which is currently where my son lives.
Ancillary to this is the fact that if you guess wrong about how much money is enough, the job market is unforgiving for people who have gaps on their resume.
It is one of the big mistakes (I think) I see a lot with the discussions on early retirement forums. A commonly trotted out trope is, “Well, if the market goes south in the first five-ten years, I’ll just go back to work.”
Uhhh, no you won’t. Not if you were doing the type of professional job that tends to generate enough money to think about early retirement in the first place. I know, as an attorney, that you do not leave a law firm or similar position for 5-10 years and then go, “Ooops, I’m just going to start working again.” At that point, you are likely in your 40s/50s, and the job market does not look kindly on hiring someone of that age without a fucked up/weird resume with a massive gap, let alone someone with one.
I assume it would be similar in a lot of other professions. I cannot imagine, for example, that you could disappear for 5-10 years in the IT world, come back in your 40s/50s, and get a job paying anywhere near what you were making before. My understanding, again, is that plenty of people in their 40s/50s cannot find good jobs in IT even without a work history gap, just because of age discrimination.
Then there is the very realistic issue of how to keep your skills up during that time. Of course, again, a lot of them talk about how they’ll just do little side projects or work for fun. If you’re doing that, you’re not really retired. Realistically, I cannot imagine too many CPAs are going to keep up to date on accounting protocols just for funsies while they are retired.
I am honestly having this very anxiety producing concern right now. I am currently on leave from my work. While I am getting disability, you never know when they’ll just decide to cut it off (because they’re insurance companies, they have an incentive to say you are better, even if you’re not). I have no idea what in the hell I would do if they did, particularly given that the longer I am away, the less likely it is I could get a meaningful job, even if I could somehow do it.
For me early retirement would be retiring at 62 instead of 65. It’s not much, but it’s a few years early. My GF will be 58.
I don’t think we would expect to be hired back at the old salary level if we decided to go back to work. It’s more like we would look for temp jobs for extra money. I like the idea of doing something now and then. Maybe we work for a few months and save and then spend it on something fun, that kind of thing.
Yeah, as a minimum wage Amazon warehouse worker, peeing in bottles and living in a RV in a Walmart parking lot. I think I’d rather just keep working than take that chance.
As a Financial Advisor I would suggest that if you are legitimately concerned about outliving your money you should look into a life annuity.
It’s essentially the opposite of life insurance, you protect yourself from living too long instead of living too short.
You can either fund it with a big lump sum of over a few years and the insurance company will pay you a fixed amount for as long as you live.
This is the fear, exactly. At the same time, how long do you work to avoid this fear? I think most people also don’t want to give up years of their life that they didn’t need to, working jobs they don’t love in order to avoid that theoretical fate.
It would suck to end up with your described future. But it would also suck to work like a dog to avoid it, only to die at 70 with far more money saved than you needed, having worked through to 65 or 68.
Again, it’s that fundamental problem of not knowing, but if you guess wrong, it being too late. Other factors play in besides just your life expectancy. Who knows when the stock market might blow up again. Or when we end up with a major situation like Japan over the last 25 years.
Well, I guess you want to overestimate right? Because you don’t want to end up ninety years old facing the prospect of living on the street. But then you don’t want to starve yourself today for some nebulous prospect of a good life in thirty years. I worked with a guy like that, he and his wife just lived on very little and socked the rest away. Just seems like a bummer to me, but it worked for them. I guess.
I met with a financial planner a few years back when we had our first kid, he was explaining to my wife and I that he had put a plan together that would allow us to hit 90, hypothetically, or die should we not live so long, with eleven million in the bank. My wife and I kind of looked at each other and said, we don’t need eleven million dollars when we’re ninety. Maybe we can ramp that back a bit. You can go a little nuts with this stuff.
There’s truth in this, but I believe it’s also true that you can get back into the industry you left if you’re willing to drop a few ranks on the corporate ladder. After 5 years, I still get headhunters contacting me about everything from systems architect (my last position, fairly high level in the IT world) to contract programming (which can be many things, but generally entry level stuff). I have no interest so I haven’t followed up, but I’d be surprised if at least one of those wouldn’t pan out if I did decide I wanted to get back into the rat race.
Probably it would be a lower-level position to start, but once you get in and do a good job (experience helping here) then you’ll move up quick. Might take a few years to get back to where you’d been, or maybe you never get that high again, but making a living shouldn’t be impossible.
Also, you can mitigate those gaps to some extent, if you want to. I keep my hand in with some IT volunteer work. Doesn’t take a lot of time, and it’s something I enjoy (wouldn’t do it otherwise). It’s not high level systems architecture, but it’s something I can put on the resume if I need to.
Well, I admit that I have not worked in the IT world, and am only extrapolating based on what I have read for that. Perhaps law is a much more conservative profession, as I cannot imagine an attorney retiring for any significant number of years and ever being able to reasonably expect to get back into a major corporation as in-house counsel or into a non-small law firm as private practice counsel.
It’s impossible to plan for everything. I also think work is important. It adds structure to our lives. Still, there’s a time to ease back and free up time for other things. The idea of retiring at 45 or 50 seems tricky to me. I wonder if a better route would be to change jobs to something that’s more interesting, even if it pays less? After all, if you feel financially secure enough to retire at 50, choosing instead to work in a lesser-paying, but more interesting job might be something to consider.
Even in retirement I feel like I will need something to do. Maybe I’ll keep a travel blog and write about the places we go in Europe. There are a lot of interesting little stories there. I remember in Florence we dined at a steak house where the specialty was, as you might expect, Florentine steak. I believe the manager we talked to, who showed us the kitchen and a few other things, said it was the only restaurant in Florence allowed to use the old style charcoal in their ovens to cook the steak. They were grandfathered in once the laws changed and a different kind of cooking element had to be used. There are little stories like that out there.
Regardless of whether you’d actually need it, I’m curious what plan this guy put together that would get you 11M in the bank, after you retired at presumably 65-ish or earlier and stopped pulling in income. Perhaps your income was/is incredible—but other than that, I can’t fathom how this guy thought he’d pull that off unless he was promising some sort of Madoff level returns, year on year.
No, my income isn’t incredible, especially by Seattle area levels, but I’d call it comfortable if I had to choose a word. I forget the details, but he did probably have suggestions for more aggressive investing than I cared for.
I am 45, in IT, and I am bored to death in my current job. It pays decently well enough but the job is brain dead, not challenging at all. But, it is 9-5 job, so technically I should not complain because I have time to spend with the family, no late night calls or demented bosses calling you at night. Yet, because it is so brain dead, I find myself losing my mind, my mind is rotting and I feel myself getting stupider. I am looking out but I fear that I might not be able to cope in a fast and challenging environment. I probably have 10 more years to go in the job market so it will be a shame to ‘retire’ in a dead end job.
I have friends like that from 2001-ish who never left GlaxoSmithKline IT. They were essentially wearing golden handcuffs; job was simple, paid like crazy, people were friendly enough … and it was easy to keep on keepin’ on and make bank every year.
I have to tell you, It did not end well for them.
Yeah, I realize that … it’s a reason I am looking out. Hopefully by looking out and landing a job, I will not be in the “did not end well for them” category, which, in all likelihood, I might because the world out there is vicious! What happened to your friends? Did they get axe and failed to survive in the ocean or they jumped off the ship too soon? Either way, they are still drowning!
I’m still in my 20s but doing well enough. I’d like to retire with a house south of Missoula, MT, in the general area where I grew up. Be great to spend my time hiking, fishing, and riverboarding. Having a cabin near Pinedale, WY, Bondurant, or Lander is the true dream…and if I have saved enough, a little homestead in the South Pacific.
We’ll see. Never know when a semi tractor’s going to schmuck you or whatever.
You guys really should look into other countries, if you can deal with being away from your friends / family / country.
Because, for instance the country I know best, my own, Portugal. Minimum wage is less than 600€. It’s in the EU. Fairly safe. Healthcare is decent, though for non EU nationals you need insurance, still cheaper than the horror stories I hear about the USA. It shouldn’t be too hard to get a visa to live here if you’re a retiree with enough money to live decently.
And we’re talking a country in the EU, there are cheaper places outside the EU that are still decent places to live in.
Personally, I’ve found that when put into a challenging environment I’ve enjoyed the extra challenge. However, you have to be in the right kind of challenging environment: the kind where you’re challenged because the task is challenging, not the type where you’re challenged because everyone around you is a moron!
I’ve read up on it a bit. It really does seem like a nice spot to land. The Algarve area has a lot of ex-pats so English is very common. Housing is very affordable. Climate is great. The beach is a short drive. Stable country. It’s on our short list.
Still not sure how this works. We will have some money. We can show an income with our pension, etc.
I don’t know if we want to relocate permanently, but we are comfortable signing a year lease at some point.