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Old 08-03-2008, 11:21 AM   #21
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I agree that working longer gives more security in retirement but it also increases the risk of failing to do the things you enjoy while you are still fit enough to do them. (I don't recall ever seeing an epitaph that said "I wished I had not retired so soon" although I'm sure there are plenty around that do think that.)

So it all comes down to personal choice and personal risk tolerance. I've been FI for a couple of years now, but want to hang on for another 19 months years to age 55 to get a DB salary starting at 55 plus health insurance and a withdrawal rate of less than 3%. So I am practicing what you are proposing.

DW and I are both very healthy at present so we don't feel that 55 is too old. I also was able to switch jobs within the company at the start of the year to a much less stressful role - no business travel, no people to manage for the first time in 24 years.

For me RE was nicely summed up by someone on this forum who said something along the lines that "FIRE is the freedom to work at what you desire without the millstone of a j*b around your neck"
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Old 08-03-2008, 11:23 AM   #22
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...the point is the long term future a retiree faces is uncertain to be sure, a lot can (and will IMO) change in 30-40 years. A larger nest egg invested more conservatively would be preferable if possible no?
[...]
As I've pointed out before, I read all these gleeful posts here from folks who are thrilled with RE after months or years into it - the proof on the decision to RE is decades away, not 10 years or less.
Midpack,

You are 100% correct.

Many early retirees apparently prefer to live very sparsely, worrying about every penny, rather than work. They say that work causes them too much stress and hypothesize that continuing to work will shorten their lifespan.

Rationalizing the "need" to escape the work world is the easy part. Everyone would rather do as they please and not have to adhere to a specific schedule or answer to anyone else. At first glance, dropping work is very liberating. But, how things turn out after a few years, is a completely different matter. In fact, I doubt whether many people who claim to have FIRE'd, are actually financially independent at all, or just counting on welfare and medicare as part of their long-term retirement strategy.

You're right to question the long term effects of retiring without enough money, and you're right to expect to be attacked. One lesson I've learned here is that people hate it when someone questions their readiness to retire, the price they pay for ER, etc.

But, for those who come to the forum to try to decide if they're ready for ER, it's good to have this discussion.

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There are quite a few people here (not all by any means) who sound like they RE mostly because they despise their jobs and they've reached some level of FI. I realize it's not easy, but I can't remember seeing finding another employer or career as an alternative if you don't like your work instead of RE.
Like you, I also can't recall anyone suggesting that they should either find a job they are better at, would enjoy more, or upgrade their skills to get promoted. Instead, the solution is to declare oneself financially independent, live very "frugally," and retire. Don't worry. Be happy.

And now for the obligatory disclaimers: Money does not buy happiness. Time is more important than money. No one has the right to judge anyone else, even if they are paying for their social programs. Not everyone's situation is identical. Some early retirees are very well prepared for retirement.

And now, back to our regularly scheduled programming...
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Old 08-03-2008, 12:14 PM   #23
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And now for the obligatory disclaimers: Money does not buy happiness. Time is more important than money. No one has the right to judge anyone else, even if they are paying for their social programs. Not everyone's situation is identical. Some early retirees are very well prepared for retirement.
Cut to the chase...

I am "depending" on SS for part of my one-o-deeze-dayz retirement income. As far as Medicare goes, there's not much choice. Most HI plans go to "secondary" status once you're eligible for Medicare. Now it could be that I'll need nursing home care, and end up on Medicaid. That's not part of my "plan", as such, but even if I work until I'm too old to continue, I'll probably never reach a level of FI that would cover a several-year stay in a nh.

Cue the LTC insurance debate...
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Old 08-03-2008, 12:30 PM   #24
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Why not work as long as possible even after you reach FI to further enhance your security and standard of living in retirement, even if it's 200-300% of what you think FI is?
Why not work as long as possible?

Because time is >> more valuable than money IMO.

The saying: "I know how much money I have, I don't know how much time I have".

Looking at working for a long time assumes that you will still live healthy long enough to enjoy a nice long retirement.

There may be folks here who hate their jobs, but that is probably not the major motivation overall. I suspect there are lots of folks here who realize life is short and we want to spend it doing what is most important to us. I'm sure I'm not the only one who had a family member die or lose their health before the "official" retirement age. That tends to be a strong wake up call.

Also - there might be things one would rather do than work! I know that I really wanted to travel, to spend a long of time outdoors, to enjoy nature, pursue some nature related interests. The time and location requirements of the job stood in the way of this particular "pursuit of happiness". So when I didn't need to work anymore (definition of FI), I quit working!

For added security I did retire with perhaps 1.5x to 2x what I needed for a comfortable retirement. The main reason was because I retired very young - at 39 - so I felt the need to have plenty of "padding" because I was (hopefully) looking at a long retirement which is riskier.

If you don't really have anything compelling you need to spend you time on other than work, I can see why retiring early would not be important. This is truly a case of "to each his own". Some people find their careers very fulfilling and not interfering with other priorities. Those people should definitely keep working.

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Old 08-03-2008, 12:37 PM   #25
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Rationalizing the "need" to escape the work world is the easy part. Everyone would rather do as they please and not have to adhere to a specific schedule or answer to anyone else. At first glance, dropping work is very liberating. But, how things turn out after a few years, is a completely different matter. In fact, I doubt whether many people who claim to have FIRE'd, are actually financially independent at all, or just counting on welfare and medicare as part of their long-term retirement strategy.
Are you implying that there are people would rather adhere to a specific schedule and be bossed so that they do not have to rely on social security and medicare as a part of retirement?
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Old 08-03-2008, 12:45 PM   #26
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If you don't really have anything compelling you need to spend you time on other than work, I can see why retiring early would not be important. This is truly a case of "to each his own". Some people find their careers very fulfilling and not interfering with other priorities. Those people should definitely keep working.
The government definitely wants more people to feel that way. These people will continue to pay taxes to support social security and public pensions (the payout of which is larger than the payroll of all government employees).
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Old 08-03-2008, 01:01 PM   #27
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It's all about a balance between actual and perceived financial security and personal satisfaction. Given similar circumstances, people make different choices. And it is all about choice.

While it's foolhardy to ER when the numbers don't work, optimists may choose to ER when they just barely work, whereas people with a more cautious risk profile will tend to want a cushion before they "perceive" that they are financially secure.

Some people ER so they can spend more time on the activities that they find satisfying. Others find satisfaction in their work and given the equivalent degree of financial security, will tend to work longer. I have seen a number of people in my profession (medicine) take this too far, retiring only when they are pushed out because their clinical practice is getting too behind the times, only to go into a decline.

I think the best way to handle the perceived financial security is to LBYM and be as well informed as possible about managing one's finances. That includes nursing a portfolio through a bear market or two before quitting!

The best approach to personal satisfaction, I think, is to nurture interests and connections outside w*rk that one can carry into ER.
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Old 08-03-2008, 01:57 PM   #28
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Some jobs, like mine, (police officer) require that a high level of physical fitness be maintained. .

My city must have different standards for it seems most cops here are pushing three hundred pounds. And they ain't all that tall. They should walk the beat more.
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Old 08-03-2008, 02:21 PM   #29
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As far as specifics, I plan to retire with about a 3%-3.5% safe withdrawal rate. I'm not counting on SS as I think it will be means tested by the time I need it. I'm also not counting on medicare and am budgeting for private insurance.

Things may change in the future, but I feel like I have more freedom and flexibility now living the way I do now, regardless of when I actually plan to pull the ripcord.

You should go through the retirement calculator from hell series and then look at what your planned retirement lifestyle is, what your sleep at night factor is, and whatever else you need to do to plan your escape. Part-time work may be a better option than no work. Having a larger nest egg may be better than having a smaller nest egg if you predict a divorce in your future.


We're frugal but not obsessive. For us it's more about not wasting money on things that would only marginally improve our life (briefly had a cook but realized I liked doing the cooking more, would never dream of living in a big house or driving a luxury car, etc).
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Old 08-03-2008, 02:26 PM   #30
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FIRE is a journey with you as the captain of your own ship

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... the point is the long term future a retiree faces is uncertain to be sure, a lot can (and will IMO) change in 30-40 years. A larger nest egg invested more conservatively would be preferable if possible no? Wouldn't it be very hard if not impossible to generate meaningful income to recover at 80 or 90 years of age if you were wrong with your FIRE assumptions?
You can depend on the future not being what it used to be (as once observed by Yogi Berra). Whatever scenario about the future you dream up and figure out out to survive can be trumped by a new and different scenario that will wipe you out.

If you have achieved the ability to FIRE with a 1:1 margin of safety and also believe future returns in the stock market might be significantly below historic returns, for exampe, then wait until you can FIRE with a 2:1 (or more) margin of safety to cover the possible downsides of a lower future total return. But if we should happen to experience hyperinflation at some point in the future, however, it probably won't matter what your margin of safety was at the time you FIREd or the fact that you might even be still working because almost all of us will likely be wiped out by the hyperinflation.

The other way to look at FIRE is this: FIRE is a journey with you as the captain of your own ship. You don't know what kind of future situations you will have to navigate through at the time when you initially leave port. At some point in the middle of a financial storm, you might wish you had accumulated a much greater margin of safety before you set sail; at other times when the wind is at your back, you might wonder why you accumulated such a higher-than-necessary margin of safety before you started. You can only know in hindsight.

You might also encounter a future situation that might sink your FIRE ship that you could have never foreseen or would have taken seriously (e.g., hyperinflation, a worldwide plaque that makes you seriously ill and uses up all of your capital for medical expenses, Congress raising payroll and income taxes to very high levels to make up for severe budget shortfalls, Congress severely cutting Social Security and Medicare benefits because the system becomes bankrupt, the Federal Reserve raising interest rates to very high levels to kill inflation even if it destroys the economy in the process, and so forth).

I remember reading about people who retired in 1970 using the approach that worked well for the previous 20 years: buy investment-grade corporate bonds and live off the interest. People who took that approach didn't see the stagflation of the 1970s coming and ended up having their retirement funds depleted by 1980.

The best you can do is deal with the squalls challenges as they arise and hope you are able to survive them so that you can continue on with your journey.
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Old 08-03-2008, 02:36 PM   #31
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It's been almost 4 years, and I'm spending less than my pension. My withdrawal rate is still at 0%. I think of my retirement accounts as my $400K emergency fund. I need to start pulling out some money when I turn 60 just to avoid required withdrawals at 70.
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Old 08-03-2008, 02:36 PM   #32
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Hmmm - If I can cheat a little and go back to Nords post on 'be' vs 'do' without plagarizing too much:

In one sense I never did work - ala the late Joseph Campbell's 'follow your bliss' I went from college into 'beat those dang Ruskies!' American Space Program.

Did it degenerate into 'crap this is work' once in a while over the next 29 yrs - Yea once in a while.

I still remember when the stuff hit the fan periodically - Sam (retired AF): "this is soo much fun, if they didn't pay me to show up, I'd have to buy a ticket and come watch!"

If you are FI - can you honestly call it a hobby? Well can you?

Always liked that Clint Eastwood quote.

heh heh heh - .
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Old 08-03-2008, 03:10 PM   #33
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Two other factors to consider (from personal experience) :

- you can like or even be passionate about your work but simply not want so much of it. 60+ hours a week of anything leaves little room for life balance, even if your work is rewarding.

- you can love some aspects of your work, and not enjoy others. FI may allow you to focus on what you enjoy most, in return for a lower income.

I hope in ESR to rebalance not only my asset allocation but also my "job description" allocation. It's easy for me (and provides endless hours of entertainment for some of my forum friends ) to keep working. It's the hours thing rather than the generic "job" thing that will drive the timing of my ESR.

But for folks who really found work to be nearly intolerable, seems it's more of a black and while decision: gather enough money and then out.
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As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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Old 08-03-2008, 04:48 PM   #34
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This is not meant to be provocative as you might think on first read, but I expect I might get blasted anyway.

Why not work as long as possible even after you reach FI to further enhance your security and standard of living in retirement, even if it's 200-300% of what you think FI is? I am not advocating living a much grander lifestyle in retirement --- the point is the long term future a retiree faces is uncertain to be sure, a lot can (and will IMO) change in 30-40 years. A larger nest egg invested more conservatively would be preferable if possible no?

I am not thinking of anyone in particular or asking anyone to defend their particular case - it's a general question.
Personally, I don't find it a provocative question. It seems to be a question about prudence, preparedness and caution. But therein lies the problem. During the short time I've been here, it seems that most people on this forum have unique histories and circumstances that have led to their choice of early retirement. Naturally, each person's measure of prudence, preparedness and caution will differ as widely and uniquely as they themselves.

One could easily ask whether 200-300% of proposed FI is enough "security." Perhaps it should be 300-400%? How much larger a nest egg? Your question is not provocative as much as it is unanswerable, since everyone's answer must begin with, "It depends...."

It depends on how important your job/work is to you. It depends on your present and/or desired lifestyle. It depends on how you measure quality of life. It depends on your state of mind and body. It depends on whether you are an optimist or a pessimist. It depends on what gives meaning to your life.

You can ask a general question, but I don't think you'll get a general answer.
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Old 08-03-2008, 06:32 PM   #35
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As far as specifics, I plan to retire with about a 3%-3.5% safe withdrawal rate. I'm not counting on SS as I think it will be means tested by the time I need it. I'm also not counting on medicare and am budgeting for private insurance.
Ah, and that is another concern for how can someone know if they are really FI or not. You have to make a great many assumptions about the future. You can shade your SWR below 4%. You can make conservative assumptions about asset allocation and expected future returns. You can try to anticipate a wide range of future inflation. But you will never really know what the rules of the game are in the future and they are subject to change (at least tax laws, SS, health insurance, etc all are). So a little longer working means a little bigger portfolio and a little more safety, but there's no limit to that either. I can "just one more year" myself forever.

Someone commented about hyperinflation, and while that would be very bad in general, I'm not sure that's too threatening to someone with a retirement stash bigger than the average person (which is sadly not all that big). Fixed income investments would be clobbered, but shouldn't equity stakes be pretty resilient? x% of ABC co is still x% of a real company. Ownership of rental units still have real value, even if rents are measured in funny money. Governments would have to do something in the face of an entire population's cash becoming worthless, just as they would have to respond to other disasters of that magnitude. I think this is impossible to model and impossible to protect against - just as would be trying to protect against an unspecified, unknown, unexpected and previously unheard of black swan.
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Old 08-03-2008, 06:41 PM   #36
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Simple answer: someday you'll run out of tomorrows. Nobody ever regretted not putting in enough time at the office on their deathbed.

I solved the "what if my plan is off and I run out of money at 95" problem.
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Old 08-03-2008, 06:50 PM   #37
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Simple answer: someday you'll run out of tomorrows. Nobody ever regretted not putting in enough time at the office on their deathbed.

I solved the "what if my plan is off and I run out of money at 95" problem.
If I'd stayed at work until I had a stroke at 60 or so, I would have had no problems outliving my money.
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Old 08-03-2008, 07:13 PM   #38
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Like you, I also can't recall anyone suggesting that they should either find a job they are better at, would enjoy more, or upgrade their skills to get promoted. Instead, the solution is to declare oneself financially independent, live very "frugally," and retire. Don't worry. Be happy.

And now for the obligatory disclaimers: Money does not buy happiness. Time is more important than money. No one has the right to judge anyone else, even if they are paying for their social programs. Not everyone's situation is identical. Some early retirees are very well prepared for retirement.

And now, back to our regularly scheduled programming...
This is an early retirement blog after all so it one is looking for a way to improve their work situation in order to stay in their longer they will have to look elsewhere. Although I have seen the recommendation to take a sabbatical of a lateral transfer numerous times for really toxic work situations.

I bailed out of nursing at age 50 because I was able to maintain my current standard of living via the income our investments throw off every year. What you call obligatory disclaimers were the exact reason I left when I could afford to do so. These are valid reasons. Further I have a husband who is 13 years my senior who had already retired. Waiting another 16 years 10 months for my full retirement to do all of the things we are able to do now would have been stupid. For what? Just to pad the bank account?

I think you are stereotyping early retirees as living a "frugal existence" to mean loads of self sacrifice and denial. You know sack cloth and ashes. I do not see that at all. Most of the folks I see here are having a great time living the way they want to on their terms. For some that does means a spartan existence.......Guess what these people were living that way while working. For others it means tripping the light fantastic. Its all good.
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Old 08-03-2008, 09:40 PM   #39
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I think you are stereotyping early retirees as living a "frugal existence" to mean loads of self sacrifice and denial. You know sack cloth and ashes. I do not see that at all. Most of the folks I see here are having a great time living the way they want to on their terms.
Dont mind the One Note Wonder. We're all living in poverty because Jeeves isnt polishing the Rolls out front right now.
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Old 08-03-2008, 09:46 PM   #40
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I think the root of what we're getting to is if you are FI, you get to chose to RE. For many, many people its a no brainer choice because they do not like their work and can't wait to do the things work keeps interrupting. However, some people hit FI and realize they really really like what they do--not the money is provides. Work becomes hobby.

One of the things my father always told me that the job you don't have to show up at every day is much more likely to be a job you'll like and enjoy doing. And the job you wake and drag yourself to because you have to, is the one you're sure to loathe. So far, for me this has proved very very true.
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