Is retiring without work backup "irresponsible"?

[Focus]

There are valuable insights in this post on the "Can I Retire Yet?" blog:

Early vs. Traditional Retirement

However, this particular statement rubbed me the wrong way:

To be frank, given the uncertainties around modern retirement, it’s probably irresponsible to leave a secure, good-paying career for early retirement, unless you also have the option to return to work if things don’t go well.

 

[W2R]

With good, thorough, "bulletproof" planning, I just don't see it as being irresponsible at all.

As long as you know that you will never have to leach off of others, I don't think retiring early would be in the least bit irresponsible. If moving into one's parents' basement and dropping into their dining room at dinnertime is Plan B, then I think his point might be worth considering.

 

[scrabbler1]

Part of my ER plan was to assure that I would never have to work again. According to the Fidelity RIP program, my financial outlook only improves greatly after I turn 60. SO how could I be irresponsible?

 

[samclem]

What he said next:

Unless you’ve saved a great deal of money, the range of possible investment returns, inflation rates, and health care costs over the long time spans involved in early retirement, introduce unknowable variables into most retirement equations.

I think he's generally right in this part, it's something we yammer on about here a bit. There really are a lot of things that could conceivably derail a retirement, even one that is well planned out.

But that doesn't mean it is irresponsible to quit working. Is it "irresponsible" to use assets wisely? Is your number of remaining days on this planet an asset? So, just how many of them should be traded for money? I'd say it's not "irresponsible" to quit working unless you are likely to become a burden on others (requiring them to trade away their own limited number of days to bail you out).

“Do not confuse "duty" with what other people expect of you; they are utterly different. Duty is a debt you owe to yourself to fulfill obligations you have assumed voluntarily. Paying that debt can entail anything from years of patient work to instant willingness to die. Difficult it may be, but the reward is self-respect.
But there is no reward at all for doing what other people expect of you, and to do so is not merely difficult, but impossible.
- RAH

 

[WestLake]

It's irresponsible not to save and plan for retirement many years in advance.

 

[2B]

No one can really plan for all the possible eventualities. A hyper-ER (age 40 or under) would have much more risk that a more "tradional" retiree of 60. The need to return to the work force would generally preclude returning to any of the lucritive professions I'm familiar with except possibly medicine. I know in engineering that if someone is out of the field for 5 or more years they would not be seriously considered except during periods of hiring desperation. The best bet would be starting a business but that would have to be done with little capital. Since if you weren't broke, why would you need income?

 

[Midpack]

The article is selling a book, by the same author. Funny how that's quickly highlighted to discredit the article/author in some threads here but not others...

 

[Dawg52]

Call me irresponsible then. I've been called worse.

If things get bad enough for me to lose everything, there probably won't be many jobs around anyway. Not saying I have a such a massive portfolio that something couldn't go wrong, but you can't live your life in fear. Of course there's always meds.

 

[2B]

The article is selling a book, by the same author. Funny how that's quickly highlighted to discredit the article/author in some threads here but not others...

I somewhat agreed with the article when the previous posts were discrediting it. I don't see where you would be able to resume a good career after a substantial time in ER so you better have a pretty good Plan B. The one I recall from a poster I haven't seen participating for awhile was "a trailer by a trout stream." Their obvious end game was to forage for food and other essentials hoping the end comes as kindly as possible. If you aren't willing to go there, it is irresponsible to be a hyper-ER.

 

[tuixiu]

It is my understanding that most fails on a SWR are from suckage early on, which should align with when my ability to panic and attempt reentry into the workforce is at it's strongest in terms of still having connections, a relevant skill set, somewhat current industry knowledge, etc.

I wouldn't want to rely on being able to go back to work, or (even worse) my ability to both be cognizant the portfolio is in trouble early and admit it, but is something to have in mind.

 

[2B]

Call me irresponsible then. I've been called worse.

If things get bad enough for me to lose everything, there probably won't be many jobs around anyway. Not saying I have a such a massive portfolio that something couldn't go wrong, but you can't live your life in fear. Of course there's always meds.

I agree with you too. I think we can all be "pretty safe" with the various calculators available as long as the option of some reasonable spending reductions are acceptable.

The big "who knows" are things that have happened to some countries in the past. Retirees in many countries have had all of their assets obliterated by hyper-inflation, revolutions and wars. The US, Britain and Switzerland (I think) are the only countries that have had continuously functioning stock/financial markets for more than the last 200 years.

 

[Midpack]

The big "who knows" are things that have happened to some countries in the past. Retirees in many countries have had all of their assets obliterated by hyper-inflation, revolutions and wars. The US, Britain and Switzerland (I think) are the only countries that have had continuously functioning stock/financial markets for more than the last 200 years.

The Amsterdam exchange is 400 years old, but I'm not sure number of years is the most important metric anyway.

 

[2B]

The Amsterdam exchange is 400 years old, but I'm not sure number of years is the most important metric anyway.

It didn't work so well during WWI and II. If my assets depended on that exchange, I'd have been out picking up brass shell casings as a retirement job. There are many old exchanges throughout Europe. The problem is usually a period of interruption and a significant readjustment period when they restart.

 

[easysurfer]

Never underestimate the joy of dawdling around doing nothing

 

[haha]

I wouldn't want to rely on being able to go back to work, or (even worse) my ability to both be cognizant the portfolio is in trouble early and admit it, but is something to have in mind.

This is a subtle point. I think generally we kid ourselves about how we will diagnose failure early, and move to correct it either by going back to work or other means.

Irresponsible is a strong word, and it applies more to ethics and morals than to anything else. If all that is being risked are an individual's or couple's well being, so be it, adults are allowed to go mountain climbing, etc, etc. which to me appears to be a whole lot more risky than retiring even very early.

So irresponsible? Who knows. Risky? Almost certainly yes.

When a human strongly wants some behavior, and wants to at least to pretend to being rational about it, he will very often allow only a truncated set of possible future states. Then he can reason, feel good that he did his due diligence, and still be guaranteed of having his desired action approved. This however may not have a lot to due with how well it works out over time.

The other thing I am not so sure about is this idea that if you don't crap out early, you are OK. I'm approaching 30 years, and it still seems to me that a number of very negative events could make my continue pleasant retirement a question mark at best.

I do think that a reasonably well financed retiree's life has more risk from his body giving out than his portfolio, but not I'm not sure. We all will die, whereas it is likely that very many of us will not run low on money. It does seem that most of us have likely heard of more relatively young people who came down with heavy duty illnesses, than formerly retired people who had to go try to find a paycheck.

Ha

 

[Focus]

When a human strongly wants some behavior, and wants to at least to pretend to being rational about it, he will very often allow only a truncated set of possible future states. Then he can reason, feel good that he did his due diligence, and still be guaranteed of having his desired action approved. This however may not have a lot to due with how well it works out over time.

An interesting, astute observation. It appears to me that the urge to exert control over one's situation or environment -- sometimes well hidden but there nonetheless -- appears to be a universal and primal human trait. And we see that expressed in our financial planning and the extent to which we try to quantify and control the unknown, which in the end can override any best-laid plans. Retiring early is ultimately a leap of faith.

We all will die, whereas it is likely that very many of us will not run low on money. It does seem that most of us have likely heard of more relatively young people who came down with heavy duty illnesses, than formerly retired people who had to go try to find a paycheck.

Very true. I think averages in terms of estimated lifespans and the like provide false assurance. I've seen too many people die early -- and without warning -- or have to deal with major illnesses. It's definitely a major driver in my aspiration to retire early.

 

[daylatedollarshort]

No one can really plan for all the possible eventualities. A hyper-ER (age 40 or under) would have much more risk that a more "tradional" retiree of 60. The need to return to the work force would generally preclude returning to any of the lucritive professions I'm familiar with except possibly medicine. I know in engineering that if someone is out of the field for 5 or more years they would not be seriously considered except during periods of hiring desperation. The best bet would be starting a business but that would have to be done with little capital. Since if you weren't broke, why would you need income?

I don't worry about this because I have done it in the past when I was off work to have kids. Being off actually gave me an advantage over my former co-workers because I could go back to school and study the areas of IT that were new and in demand. Then I hung out online in forums where people were actually doing the kinds of work I wanted to do and they gave me all sorts of mentoring and free advice.

I guess if I lost my mind in retirement I wouldn't be able to do that again, but otherwise I think between online classes and being a knowledge worker I could always find some ways to support myself even without leaving the house. I just have to be able to type and think.

 

[chief04010]

I don't really have a problem with this article with the exception that I feel it is difficult to place retirement in two catagories as he has done. I guess it's the over simplifacation that early retirement or traditional retirement is all there is. I have found that retirement is not one size fits all or even two sizes fit all. The author seems to start well when he described the various scenarios but then he says ok here are two, pick one. Also the statment " Unless you’ve saved a great deal of money" seems pretty vague, how much is a great deal of money? Pecentage of income, over 1 million, or Mitt Romney rich? Anyway that's my two cents.

 

[FIREd]

Like others, I feel that the word "irresponsible" is used inappropriately here (I might feel differently if I had a family to support). Is retiring early risky? absolutely. I've been out of the workforce for several years now and I know that it would be all but impossible for me to go back to my old, good paying career (which was never secure). That's a fact, and one that should not be minimized. I took a chance and there is no going back. Maybe it'll blow up in my face down the road and I'll have to deal with the consequences of my decision. But that's what taking risk is all about.

 

[daylatedollarshort]

I actually went into work that paid much better per hour than the old megacorp job. If you like taking classes and learning new things there are always new careers that pay well where the demand exceeds the supply.

 

[butterfly]

With good, thorough, "bulletproof" planning, I just don't see it as being irresponsible at all.

As long as you know that you will never have to leach off of others, I don't think retiring early would be in the least bit irresponsible. If moving into one's parents' basement and dropping into their dining room at dinnertime is Plan B, then I think his point might be worth considering.

LOL. Classic imagery. I agree that irresponsible is possibly the wrong word. Risky, yes, irresponsible; not so much.

It's irresponsible not to save and plan for retirement many years in advance.

Oh yes. I have been planning since I was 20. My friends thought I was nuts. 18 years later: here I am with FI and a plan(s).

Like others, I feel that the word "irresponsible" is used inappropriately here (I might feel differently if I had a family to support). Is retiring early risky? absolutely. I've been out of the workforce for several years now and I know that it would be all but impossible for me to go back to my old, good paying career (which was never secure). That's a fact, and one that should not be minimized. I took a chance and there is no going back. Maybe it'll blow up in my face down the road and I'll have to deal with the consequences of my decision. But that's what taking risk is all about.

Really? We have two young children (4 and 6yo) and I have not thought our decision irresponsible, rather an investment in our children to have a mum and dad around to help them learn and see the world.

I think there is risk in everything; that is life. There are so many variables that I think with well thought out planning and afew backups there is a choice to live in fear of what could happen or ride life's bumpy road and relish the experience, whatever it may be.

I figure that we started with nothing and built our portfolio; the worst financial thing that can happen is that we start again and go back to work. This happens everyday because people older than us have to work due to having a zero net worth. It would not be ideal, but we could cope. (albeit kicking and screaming...)

 

[ERhoosier]

I have no problem with the article's point to think long & hard about ER if you are at all marginal in your finances. In present economy there are so many good, well-qualified folks looking for j#bs in most areas that companies usu have their pick from solid applicant pool without having to take chances on folks with (in HR's view) "ER remorse". Leaving a good-paying career "early" (vs taking few mo break) is usually a 1-way ticket for most professions (inc. modern medicine, at least in the US). So leaving in your 40's (or mid-50's) prob is indeed "irresponsible" if you don't have an unusually generous nest egg for dealing with the uncertainties of a 40+yr retirement.

 

[Al in Ohio]

Never underestimate the joy of dawdling around doing nothing

+1

That and planning where others fail to grasp the obvious before they die is what makes me feel like a king.

King of FIRE. ( cue up some Johnny Cash please! )

 

[ERD50]

This is a subtle point. I think generally we kid ourselves about how we will diagnose failure early, and move to correct it either by going back to work or other means. ...

Agreed. If we react to every little downturn, we will likely be back to work or cutting spending drastically only to see everything recover in the next year are so. It wouldn't be much of a retirement. Look at the recent 2008 plummet - how many went back to work, or cut spending drastically ( I mean 50% or so, something significant)? Would have been smart if the recovery didn't show up, would have been a waste of our best years to work or cut when it turned out the market did recover. But how would you know this in advance?

When a human strongly wants some behavior, and wants to at least to pretend to being rational about it, he will very often allow only a truncated set of possible future states. ...

It's human nature, and it's interesting to observe this in others. I imagine we all have trouble seeing it in ourselves!

The other thing I am not so sure about is this idea that if you don't crap out early, you are OK. I'm approaching 30 years, and it still seems to me that a number of very negative events could make my continue pleasant retirement a question mark at best.

Yep. Even though this seems to be the case with the historical failures, I imagine it's just a matter of typical business cycles. And if you run a 45 year profile, a 40 year, a 35, 30, or 25 year, the same thing applies. Are we ever safe? The future may be a very long drawn out loss in buying power, rather than a big cliff.

-ERD50

 

[foxfirev5]

Uncertain times indeed. One should never retire in uncertain times. However who can tell me when we had certain risk free times?