Have you failed (financially) at ER and returned to work?

[FUEGO]

Spending the better part of the last 5 years at a staffing agency, I ran into a lot of stories from people who went back to work. There was every story imaginable and most of them were because they got bored and needed to get out of the house.

Around here, I can see the "getting bored" happening more often than running out of money given the high level of planning and factors of safety applied by the average poster.

However, one particular story stands out most. I was interviewing a man in his mid 50's who had retired in his mid 30's with a real estate portfolio. He made it through 20 years of retirement but he came upon hard times. If I recall correctly, the recession hit him hard and his real estate holdings were in a particularly bad area that saw major declines (not all from the downturn but because of the area turning lower socio-economic which affected his rents).

He came to our organization looking for temp work in his previous industry. However, being 20 years out of the workforce, he was basically unemployable for anything over 12/hour. He knew that his cash was running short and he was being preemptive in finding additional cash flows.

That's one reason why I've shied away from real estate. I might end up doing really well, or find out that in 20 years I've bought in a neighborhood/city/state that's stuck in an economic death spiral.

And that $12/hr might be me in 20 years too. Luckily, that would cover a significant portion of our early retirement budget, so the worst case of running out of money doesn't strike me as particularly bad.

 

[Midpack]

My scariest failure: dying or feeble with a big pot left over, and having missed out on all the things that could have been.

Scarier than running out of money? Not me. I'd like to 'die broke' but that's not possible short of annuitizing everything, and that's not without risk. I'd much rather leave something on the table vs coming up (way) short...YMMV

 

[CaliforniaMan]

Scarier than running out of money? Not me. I'd like to 'die broke' but that's not possible short of annuitizing everything, and that's not without risk. I'd much rather leave something on the table vs coming up (way) short...YMMV

You make a very good point, and if I were a very young retiree that would be my main worry. But money isn't everything, and after you're dead it isn't anything. I did put some thought into the comment. I think it would be pretty hard for me to actually "run out of money", with my paid off house, no debts, and SS enough to sustain me if I really had nothing else. I might have to cut back a lot, and would certainly do that long before running out. I do fear a big crash that would not let me do all I want but it is not what I fear most.

Having just been to my high school reunion planning meeting, it is scary how many of my old friends have passed away, some once vibrant ones now sickly and confined to wheelchairs. It would be very easy for me to be so frugal as to not want to spend anything. Live on the bare minimum until I am too old and feeble to do anything. So actually I find it harder for me to spend money, and take on the adventures that I would enjoy and that might benefit others.

It is very easy to put off things, and keep putting off until it is too late. On the selfish side we have a lot of travel we want to do, old friends and relatives we want to spend time with, and new things we want to do and to learn. On the less selfish (okay still selfish but in a different way) we will helping to start a school in a 3rd world country, try to be friendlier to people, neighbors). It is easy for me to procrastinate and just watch my portfolio grow (or decline whatever it wants to do), but in some ways it is harder to realize the reality that procrastination has a cost too. So if things get bad, we will cut back, way back, we wont run out of money. But eventually we WILL run out of time. So until then I will try to force myself to think less about the portfolio and more about the maximizing the time remaining. But hey, I will still spend under 4%, just in case I stay healthy and live a long time, and let the good times roll on, if it is in the cards.

 

[Balance]

So, I know of two instances that qualify as examples for the OP's question.

1. Husband and Wife that had more than enough to live out their lives comfortably, but could not dial down the lifestyle along with giving their kids to much assistance too early. They ended up living with one of their kids, using SS and needing their kids to kick money back in to help pay their bills. They are happy and the money the kids are giving back pales in comparison to what those kids were originally given. Bottom line, it will all work out OK

2. Husband and Wife who retired early with adequate but not inordinate wealth. Ironically, they both had in-depth discussions about life in retirement but when it actually happened, Wife reverted to a part time job for the social life and husband found himself going stir crazy, so he found a new career that was contract based which would give him flexibility in his schedule. Turns out the money they have made over the years has been used for both shoring up the nest egg in market down turns and "mad money" when things are good. Bottom Line, they are working because they did not have the same lifetime goals, but they seem happy and things will be fine.

My take away is similar to others in this thread. Early retirement has many positives but it's not for everyone. Clearly, having adequate funds and keeping your fixed costs low puts most retiree's in a good place for the long term. The real challenge is having a social and active life while keeping discretionary spending in check for the long haul. That being said, I have jumped into a small contract job and have another one being presented to me. I am doing it for the mental and social aspects. Now, the question is can I balance my work schedule with my new semi-retirement life schedule such that I will want to stay with it.

 

[Birchwood]

I retired 4 months ago ( 64 yrs), with adequate savings and pension. I also had three years to study the plan including all the possible setbacks. The most important point is to be healthy(both you and significant other). We will then have the time and freedom to do whatever. We also set up daily schedules and core pursuits, and most does not include buying expensive stuff. We are just happy experiencing things without constraints of work. We see ourselves busy planning activities one after another.
We are also willing to compromise and adjust expenses depending on the market.

 

[brewer12345]

You could conceivably call me a failure. I bailed in January and started a contract gig two weeks ago. I was not looking for it, but it fell in my lap and since I knew I might be on the light side when I quit I would probably be better off if I found some sort of income over the first 5 to 10 years after quitting. I am trying hard not to let the paid work interfere with my chosen lifestyle too much and the contract is supposed to be done after a year. Of course, I got a call today from someone else dying to hire me as a consultant (I think I am legally prohibited from helping them until I have been out of the job for a year), so I could conceivably be working more after I quit my job than before.

 

[haha]

All the people I know who successfully retired early are on this forum. The ones I know in the physical world who retired early were all unsuccessful and either went back to work or were forced to reduce their standard of living.

Where I worked (abroad) it was common for people to leave work with large lump sums. They all had lofty dreams, yet almost all burned through the cash and in short time were back looking for work.

This is very interesting. I know people who retired early and stayed retired, but they are mostly hereditary rich. One other guy, my former roommate, retired from a lucrative orthopedic practice at age 60 with $10+mm, and he and his new wife, another doctor's widow, spend very freely and have no worries. He had no divorce, but stayed single until relatively late in life.

What many of us do or at least attempt to do here is harder. Retire from very early to early on middle class amounts of money, often with children.

Looking back I took wild risks, but was too dumb to realize it. The force was with me, which had nothing to do with me or my "plan" or anything else even semi-rational.

Ha

 

[FUEGO]

So, I know of two instances that qualify as examples for the OP's question.

1. Husband and Wife that had more than enough to live out their lives comfortably, but could not dial down the lifestyle along with giving their kids to much assistance too early. They ended up living with one of their kids, using SS and needing their kids to kick money back in to help pay their bills. They are happy and the money the kids are giving back pales in comparison to what those kids were originally given. Bottom line, it will all work out OK.

Thanks for that example. Spending more than you should and economic outpatient care for your kids can definitely kill the financial ER plans. Good to hear they have a roof over their heads and that they will be okay.

 

[FUEGO]

You could conceivably call me a failure. I bailed in January and started a contract gig two weeks ago. I was not looking for it, but it fell in my lap and since I knew I might be on the light side when I quit I would probably be better off if I found some sort of income over the first 5 to 10 years after quitting. I am trying hard not to let the paid work interfere with my chosen lifestyle too much and the contract is supposed to be done after a year. Of course, I got a call today from someone else dying to hire me as a consultant (I think I am legally prohibited from helping them until I have been out of the job for a year), so I could conceivably be working more after I quit my job than before.

Brewer, would you say you went back to work for "financial reasons" meaning at least 75% of the reason for returning to work was the need or want of more cash? I assume the position fills other purposes in your life (intellectual stimulation?).

I would certainly be tempted if an old colleague approached me and offered me a full time job (or contract job) that fit well and paid well. I did have two freelance gigs fall in my lap and I pursued both of them and named prices I thought were much higher than what would be accepted. One job kind of fizzled out after a few engagements, the other is still going strong (at 4-8 hrs/month). I'm not sure if I would say 75%+ of the reason is for more money though. Maybe 50%.

 

[brewer12345]

Brewer, would you say you went back to work for "financial reasons" meaning at least 75% of the reason for returning to work was the need or want of more cash? I assume the position fills other purposes in your life (intellectual stimulation?).

I would certainly be tempted if an old colleague approached me and offered me a full time job (or contract job) that fit well and paid well. I did have two freelance gigs fall in my lap and I pursued both of them and named prices I thought were much higher than what would be accepted. One job kind of fizzled out after a few engagements, the other is still going strong (at 4-8 hrs/month). I'm not sure if I would say 75%+ of the reason is for more money though. Maybe 50%.

I dunno. My plan assumed that I would be generating some income during the first 5 to 10 years of chucking the cube job, it just happened to turn up sooner than I expected. Would I be doing this if it did not pay well? Nope.

 

[FUEGO]

I dunno. My plan assumed that I would be generating some income during the first 5 to 10 years of chucking the cube job, it just happened to turn up sooner than I expected. Would I be doing this if it did not pay well? Nope.

Gotcha. I'd say you didn't fail at all but rather had planned on some income initially. You just got the timing fortuitously wrong.

 

[brewer12345]

Gotcha. I'd say you didn't fail at all but rather had planned on some income initially. You just got the timing fortuitously wrong.

Its not a bad gig aside from the dull work. I still had time to walk the dogs, walk the kids to and from school, make Russian black bread with home ground flour, and make a couple pounds of fresh butter with my daughter. That was all today.

 

[GravitySucks]

I failed at returning to work. they made an offer 3 or 4 years before I was ready, but I bit on it expecting I'd get a contract gig offer after the mandatory 1 year waiting period. I accepted an offer at 1 year and a week and after 4 days of w?rk I was so fed up with the lying and abuse I gave my 2 week notice.
I'd rather cut back on vacation plans than put up with a crap 9 month assignment. The joy in having f u money!

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[FUEGO]

Its not a bad gig aside from the dull work. I still had time to walk the dogs, walk the kids to and from school, make Russian black bread with home ground flour, and make a couple pounds of fresh butter with my daughter. That was all today.

And what did you do AFTER breakfast?

 

[2B]

However, one particular story stands out most. I was interviewing a man in his mid 50's who had retired in his mid 30's with a real estate portfolio. He made it through 20 years of retirement but he came upon hard times. If I recall correctly, the recession hit him hard and his real estate holdings were in a particularly bad area that saw major declines (not all from the downturn but because of the area turning lower socio-economic which affected his rents).

I'm not sure what happened with him; he wasn't cashless yet, but he knew he couldn't sustain his portfolio for much longer. This hit close to home as my own plans had been heavy in real estate holdings for ER.

I've run across a number of people heavily into real estate. There seems to be a mindset with RE investors in single family homes and apartments that makes them believe properties only appreciate. Nothing is further from the truth.

A 30 year rent house or apartment is not going to be worth as much as a comparable new version even though the older asset may be worth more than the original purchase price. I've seen people dump a ton of money into fixing up and older house to be able to rent it.

The big risk is shifting socio-economics. Houston is full of formerly expensive neighborhoods that are now gang infested. Rents and property values are in the toilet. I suspect most are worth well less than what they were worth ten years ago despite Houston's booming real estate market.

It's always dangerous to depend too much on any one asset class especially one so location dependent.

 

[Free To Canoe]

You make a very good point, and if I were a very young retiree that would be my main worry. But money isn't everything, and after you're dead it isn't anything. I did put some thought into the comment. I think it would be pretty hard for me to actually "run out of money", with my paid off house, no debts, and SS enough to sustain me if I really had nothing else. I might have to cut back a lot, and would certainly do that long before running out. I do fear a big crash that would not let me do all I want but it is not what I fear most.

Having just been to my high school reunion planning meeting, it is scary how many of my old friends have passed away, some once vibrant ones now sickly and confined to wheelchairs. It would be very easy for me to be so frugal as to not want to spend anything. Live on the bare minimum until I am too old and feeble to do anything. So actually I find it harder for me to spend money, and take on the adventures that I would enjoy and that might benefit others.

It is very easy to put off things, and keep putting off until it is too late. On the selfish side we have a lot of travel we want to do, old friends and relatives we want to spend time with, and new things we want to do and to learn. On the less selfish (okay still selfish but in a different way) we will helping to start a school in a 3rd world country, try to be friendlier to people, neighbors). It is easy for me to procrastinate and just watch my portfolio grow (or decline whatever it wants to do), but in some ways it is harder to realize the reality that procrastination has a cost too. So if things get bad, we will cut back, way back, we wont run out of money. But eventually we WILL run out of time. So until then I will try to force myself to think less about the portfolio and more about the maximizing the time remaining. But hey, I will still spend under 4%, just in case I stay healthy and live a long time, and let the good times roll on, if it is in the cards.

Had to bump this thread because there were so many good replies.
I was looking for a thread to bump to add the future of work article to. I will probably start another thread.

To answer the OPs question, no I did not fail financially and I am still retired but I did receive a scare in 2008.

I am thankful every day that I am still financially independent.

 

[Free To Canoe]

An interesting article (also rather long) that tries to answer the question of what the work world will look like in the future for the USA.

The end-of-work argument has often been dismissed as the “Luddite fallacy,” an allusion to the 19th-century British brutes who smashed textile-making machines at the dawn of the industrial revolution, fearing the machines would put hand-weavers out of work. But some of the most sober economists are beginning to worry that the Luddites weren’t wrong, just premature.

The transition from labor force to leisure force would likely be particularly hard on Americans, the worker bees of the rich world: Between 1950 and 2012, annual hours worked per worker fell significantly throughout Europe—by about 40 percent in Germany and the Netherlands—but by only 10 percent in the United States. Richer, college-educated Americans are working more than they did 30 years ago, particularly when you count time working and answering e-mail at home.

A World Without Work - The Atlantic

 

[NW-Bound]

I like to bump threads, if I run across one that is on the same subject.

Just curious. I imagine those that did figure out they were undercapitalized might be busy working and not posting at ER dot org.

I'd be curious about anyone you know that retired then had to go back to work for financial reasons.

For those interested in picking a nit, "going back to work for financial reasons" means at least 75% of the reason for returning to work was the need or want of more cash.

As for defining "work", I'll leave that up to your creativity.

And I want you to define "failure", because it depends on what the meaning of the word failure is.

If a person runs short financially, but manages to scrape by on just SS but does not go back to work, does he still fail? If a person does not need money, but wants to work for fun, is it OK?

So, let's define retirement failure as something that happens when one's retirement does not work out as one plans. Sounds fair? This is broader FAILURE, and it is not necessarily about money.

Heck, there are people like me who do not have a written down plan. I do not have a bucket list that if not fulfilled would qualify me for failure. I do not know if I will die a decamillionaire like my most fortunate FIRECalc runs, or become a thousandaire like the FIRECalc cases that skim the zero line like an Exocet missile. I do think that if I end up under a bridge, then I definitely have failed. But it's not failure if I end up in my RV, parked under the open sky of New Mexico on a state campground. That's always my plan C.

And there are more ways that my retirement may not work out like my broad plan. If I croak tomorrow, that's FAIL. But what if I succumb to a disease at an early age of 70? That's probably partial failure. How about 75, or 80? What if I live long, but in pain and misery?

I dunno. I don't know how to define failure, nor success.

 

[FUEGO]

And I want you to define "failure", because it depends on what the meaning of the word failure is.

ER failure is defined as "going back to work for financial reasons" where at least 75% of the reason for returning to work was the need or want of more cash.

Per my OP.

I'm sure many early and traditional retirees occasionally want more money. My question is really concerned with whether they actually go back to work to get more money (15 hrs/wk as a walmart greet or returning to FT work in their old careers or whatever).

 

[NW-Bound]

I understood your question, actually.

I was just trying to divert the attention to other kinds of failure that may be more important than monetary kinds. Sorry for the subtle thread hijack.

 

[NW-Bound]

I remember a thread a while back where the OP talked about going back to work for monetary reasons. It was during the market crash of 2008-2009. I don't know I can find that thread anymore. He provided quite a bit of details.

And then, all of us remember Lazybum. There were also some other frequent posters who disappeared, but not before lamenting about fund shortage. And then, there are many infrequent posters who dropped out but we would not know as they were passive forum readers.

So, it would not surprise me that there are quite a few to meet the criteria, but it is not easy to get an accurate count.

 

[clifp]

My brother-in-law failed twice. He took of with 2 fraternity brothers on a sailboat at about the age of 30 taking my 21 year old sister with him. The trip was wonderful adventure of 3 years. When the got back to the states he tried to keep from working by trading stocks from his remaining saving and most sized inheritance. That lasted about 2-3 years before he got an engineering job.

They retired to Hawaii when was about 53 and that last for 5 years till the bear markets of 2000,2001 got him and he we back to work. He finally retired for good at 65.

 

[pullmyfinger]

I'm not sure that I'd say we failed, but we attempted RE back in 2007 with a much smaller portfolio. We were 38 and 40, both with toxic jobs. We had 1M portfolio and a paid off house and annual spending of about $24k. One very small pension that had already started, and two slightly larger ones to start at 65. Maybe it could have been done, but about 6 months in I realized that was way too tight for my comfort. This was also before the ACA. We would have committed ourselves to a very small budget with no wiggle room for any big unexpected expenses. We also probably didn't put enough thought into how we would access those funds - did we really have enough in taxable funds to tide us over?

So I went back to work first and DH followed the following year. In 2014 we retired for good with a SWR of 1% and fewer years to fund. So maybe it was a close call. I'm glad we sorted things out right away while we were still employable in our fields.

 

[mh]

I "failed" in that I went back to work when a low stress gig fell into my lap that's just a few miles from where I live.

I decided it would be worth working a couple xtra years to boost my travel budget. No regrets so far but I don't think I'll go beyond my TMY (two more year) plan


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[Mulligan]

My brother-in-law failed twice. He took of with 2 fraternity brothers on a sailboat at about the age of 30 taking my 21 year old sister with him. The trip was wonderful adventure of 3 years. When the got back to the states he tried to keep from working by trading stocks from his remaining saving and most sized inheritance. That lasted about 2-3 years before he got an engineering job.

They retired to Hawaii when was about 53 and that last for 5 years till the bear markets of 2000,2001 got him and he we back to work. He finally retired for good at 65.

All in all a good run still. An employable skill definitely can mitigate a premature or unfortunate ER.


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