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A latecomer to early retirement with questions . . .
Old 07-05-2014, 03:44 PM   #1
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A latecomer to early retirement with questions . . .

Hi y'all.

Finally decided to introduce myself to the community after lurking in the shadows for several months. I’ve spent my time here reading and evaluating posts which seem even remotely relevant to my situation. It's amazing how much I've learned in this time as well as being entertained.

My story isn't that different from many others I've read here, except that I was oblivious to the possibility of early retirement before landing here.

I and my DW (56/54, no kids) have always been savers and lived within our means. Our retirement plans however were nebulous at best. We both participated in our 401k plans at work and had other savings but no pensions. Other than a mortgage, we stayed debt-free. We also spent freely on stuff - for ourselves, family and charity - really without considering the long-term value (or lack thereof) of the stuff we bought. We figured we’d pay off the house and retire at normal retirement age with SS and ample retirement accounts to last us. That was our plan - if you could call it a plan.

I don’t really know what brought it on, but around the time the mortgage was retired last year I began having thoughts about working less and doing more fun things. I discovered this forum and the Boglehead site. I discovered Firecalc and ORP. I realized that a not insignificant portion of our expenses were in fact wasteful spending that added no value to our lives. It was “convenience spending” to sooth the stress and fatigue from long work weeks. Seemingly all of a sudden, it became apparent that we didn’t necessarily have to work 10 more years before retiring. The premise that early retirement has as much or more to do with controlling expenses than with replacing income was an epiphany for me.

The past 20 years of our finances are logged in Quicken, but have rarely been given a second glance once the monthly statements were reconciled. For the last 9 months we’ve been tracking our expenses closely and have made modest efforts to reduce this “wasteful” spending with surprisingly good results. We want to determine what level of spending is required for a satisfying lifestyle and is sustainable with our resources. I am very apprehensive about drawing conclusions yet because this idea of early retirement still seems so new to me. It is not something I’ve been diligently planning for the last 15 years like so many here. For lack of a better term, I don’t feel like I’ve paid my FIRE dues yet. That being said, it definitely looks doable.

This long narrative leads up to these questions: For those who were latecomers to early retirement, how long did it take you to come to terms with the reality and feasibility of walking away from w*rk? Did you (have to) make a reduction in spending before pulling the plug? If so, has it been difficult to sustain this new spending level? Do you have any regret for not working a bit longer?

If you’ve read all this, thank you! Your comments will be appreciated.
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Old 07-05-2014, 04:18 PM   #2
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Welcome to the forum!

I had my eureka moment after receiving an inheritance in 2005. I spoke with several FAs and one of them said: "you have a lot of choices now". That stuck in my head. Since I am a planner by nature, that started me on a journey of research and analysis. I joined this forum in 2006 and have learnt a lot here. I began to look critically at my spending and became much more diligent about differentiating needs from wants. I definitely became more frugal and I also became more educated about tax efficiency and the withdrawal phase. It took until 2012 before ER but I was well prepared.

You have taken some important steps on the way to ER. My advice would be to focus on LBYM and get comfortable with it while taking time to research your options. You will find that w*rk becomes less tedious as you develop a plan to escape it.
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Old 07-05-2014, 04:31 PM   #3
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Welcome to the forum!

The paths to ER are many and you'll find that here. Some have pensions of varying levels of security, some COLA, some not, some a mixture of pension, SS, and investment income and the variations number almost as much as the people. And a sizable number saw it coming and planned for it decades ago and live off investment income alone.

We did have a sizable reduction in income but only a slight reduction in spending since we were LBYM decades ago so retirement meant only that the rate of saving slowed appreciably and sometimes stopped entirely. But that will correct in a couple of years when I start SS. Most of that will be gravy so padding the savings will be easy (as I write that I wonder "What for?") if we choose to.
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Old 07-05-2014, 04:58 PM   #4
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There's some conflict between the desire to ER and the desire to be sure you are really FI (often seen as OMY One More Year). One of the best suggestions I got was to try out your retirement budget for a year before doing anything like leave a job that would be difficult to replace. This gives a definite timeframe for when to ER, allows for OMY but with a well defined limit, and gives additional confidence (or not) that the retirement budget will really work for you.
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Old 07-05-2014, 06:46 PM   #5
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Welcome Boog.

I'm not retired yet, so I can't answer your questions.

I hope you make it soon, though. We would love to have a member with the forum name BoogER.
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Old 07-05-2014, 07:03 PM   #6
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We would love to have a member with the forum name BoogER.
That's just wrong!
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Old 07-05-2014, 09:27 PM   #7
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Five years of planning and then a four year execution plan. Things are going according to plan. Just like I planned 'cause I'm a planner.
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Old 07-06-2014, 06:59 AM   #8
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Welcome Boog! I retired in April at 58, DW retired 3 days ago on her 60th birthday. I began working on a retirement plan about 12 years ago, tracking expenses while gradually reducing work hours. About 3 years ago, I put the retirement budget into action while working part time. It seemed to work, and Firecalc haves us 100% results, so I retired fully. We may have cut spending a little over the last few years, nothing major - maybe just being a little more frugal across the board. So the reduction in spending is really not difficult to maintain. Do I have regrets for not working longer? - Looking back, I should have retired earlier, but my DW may not have liked the idea. Good luck in your RE journey!
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Old 07-06-2014, 10:59 AM   #9
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Quote:
Originally Posted by boog View Post
Hi y'all.


This long narrative leads up to these questions: For those who were latecomers to early retirement, how long did it take you to come to terms with the reality and feasibility of walking away from w*rk? Did you (have to) make a reduction in spending before pulling the plug? If so, has it been difficult to sustain this new spending level? Do you have any regret for not working a bit longer?

If you’ve read all this, thank you! Your comments will be appreciated.
Howdy Boog! I retired at 58. How long did it take? A couple of OMY years before retiring from a job that was growing more aggravating to give me comfort that ER was do-able, followed by a couple of years after of being tentative about occasional extravagances. I'm much more comfortable now about the occasional splurge, but splurges were occasional before retirement as well. DW and I lived modestly when starting out and incomes only provided for living so, but we found our wants did not grow much while our incomes did. That left us in good shape for our (slightly) ER. No real self-imposed reduction in spending before or after, but mortgage and college loan payoffs happened same year I retired. Regrets about not working longer? Zip. Zilch. Nada.
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Old 07-07-2014, 12:23 PM   #10
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Quote:
Originally Posted by boog View Post
I discovered this forum and the Boglehead site. I discovered Firecalc and ORP. I realized that a not insignificant portion of our expenses were in fact wasteful spending that added no value to our lives. It was “convenience spending” to sooth the stress and fatigue from long work weeks. Seemingly all of a sudden, it became apparent that we didn’t necessarily have to work 10 more years before retiring. The premise that early retirement has as much or more to do with controlling expenses than with replacing income was an epiphany for me.
The Consumer Expenditure Survey showed us that we could live a normal middle class life on much less than we were spending when we both worked full time. What is interesting is that is a normal middle class American life in the 2010s, which is still much more spendy than middle class households in most others parts of the developed world or other eras in the history of the U.S. Like in the 1950s people lived in 259 sq ft of housing per person on average and got by without 300 cable channels or as much fast food.

We've been in semi-ER mode and trying to live more sustainably with more free time and less consumer / mindless spending. We cut out things like 300 cable channels, commute costs, buying fast food because we were too exhausted from work, raised insurance deductibles, lowered our energy bills and probably a 100 other expenses like that.

So far we haven't missed much. Like no one in the house says remember the good old days when we had lower insurance deductibles or used 40 kwh of electricity a day? Even the kids didn't notice or complain when we installed low flow showerheads.

This is my favorite article on how much more expensive and less healthy it is working a lot of hours each week -

http://www.raptitude.com/2010/07/you...been-designed/

"The ultimate tool for corporations to sustain a culture of this sort is to develop the 40-hour workweek as the normal lifestyle. Under these working conditions people have to build a life in the evenings and on weekends. This arrangement makes us naturally more inclined to spend heavily on entertainment and conveniences because our free time is so scarce.

I’ve only been back at work for a few days, but already I’m noticing that the more wholesome activities are quickly dropping out of my life: walking, exercising, reading, meditating, and extra writing.


The one conspicuous similarity between these activities is that they cost little or no money, but they take time."
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