More Work = More Security?

[Midpack]

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? 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? 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.

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. I find it hard to believe anyone dislikes work in general, but maybe I'm wrong.

Again, I hope you can see the question and not focus on the RE observation. I am not thinking of anyone in particular or asking anyone to defend their particular case - it's a general question.

 

[HFWR]

I'm having enough trouble reaching FI 1.0...

 

[Dawg52]

Work = Unhappiness, at least for me. I'll take my chances on ER.

 

[Walt34]

Some jobs, like mine, (police officer) require that a high level of physical fitness be maintained. With rare exceptions, few people north of 50 are still in condition to be chasing 20-year-old bad guys through back yards and jumping fences even if they're technically assigned to positions where they don't have to do that. Where I worked, if you didn't pass the annual physical there were a few light-duty positions but they were limited. You had about a year to get in shape/recover or be gone.

And some jobs have a high stress levels that simply cannot be maintained. Air traffic controllers have mandatory retirement dates for a reason. I've seen posts from people in medical professions dealing with issues that I know I couldn't deal with.

So for many the decision to RE is not entirely financial. Often that's a minor consideration.

 

[Spanky]

more work = more stress, less fun, shorter life span.

If a person still enjoys his/her type of work, working for a few more years after FI is fine.

 

[Midpack]

HFWR: I guess an easier way to state my question: Wouldn't we all be better off working until 65 or so whether than means FI 1.0, 1.5, 2.1 or whatever (next point is a factor).

Walt34: No question, but how about another career at something you enjoy? My FIL was a career Navy man and I don't think he wanted to 'go to sea' anymore after almost 30 years. But he became a Sales Mgr at a hometown car dealership, enjoyed it, and went on for many more years. He and his family were much better for it than if he had just retired from the Navy as he could have.

One of the VP's at my MegaCorp is 70, plans to retire at 72. I am sure his net worth is staggering, so his retirement will be more carefree than I could hope for which has a certain amount of appeal. He has the good fortune of being very good at what he does, he enjoys it (obviously) as is paid handsomely for it. He could have retired 15 years ago...

 

[Helen]

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?

This sounds like planning for the worst case scenario, which I personally think is futile.

In addition, who knows how long we will have good health? I love to backpack and do physical things. The earliest I can retire is age 56. How much longer after that am I going to be able to put a backpack on and hike through the wilderness?

I don't plan on bailing from the work place with just enough to get by, I will have plenty of cushion, but I'm not shooting for 200 - 300% of what I think FI is.

Maybe too, we all define FI differently. I would not consider myself to be FI if I had just enough to cover my basics. There will always be home repairs and new cars needed as well as medication, health care and flights home to visit family. To me, FI means I can cover all of that. 200 - 300% above that is over kill.

-helen

 

[Marquette]

It's simple.

If you like what you do and can't imagine doing anything else, if you define yourself by what you do, or if you don't feel financially secure enough to retire, then you should hold off on retiring as long as possible.

 

[W2R]

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 working beyond FI right now, and have been for the past six months or so. I probably have enough to live several lifetimes, given my frugal habits. The reason I am continuing to work is that I will qualify for lifetime medical in fifteen months, and I would like to take my medical expenses out of the unknown into the known expense category.

I don't expect that the extra money from fifteen months' more work will change my lifestyle much, or make much difference in the long run. In my case I received a windfall recently but even if I hadn't, I had already built in a lot of fail-safes in my ER plan. I never intended to retire at the first moment I could possibly keep body and soul together, and I think most board members judiciously allow themselves a "cushion" as well.

One advantage of my additional 15 months of drudgery is that while some people on the board moan and fret about the market (and justifiably so), I can view recent market trends with equanimity.

But consider this: my father was diagnosed with terminal cancer on the day when he retired - - while he and my brother were literally moving the furniture out of his office he took an hour's break to go see his doctor, and got the news.

I DON'T want that to happen to me. I am feeling older every day. I don't want to spend my entire life at work. I deserve more.

 

[Midpack]

Maybe too, we all define FI differently. I would not consider myself to be FI if I had just enough to cover my basics. There will always be home repairs and new cars needed as well as medication, health care and flights home to visit family. To me, FI means I can cover all of that. 200 - 300% above that is over kill.

I respect this POV, but my point is that no one can predict what it will take to 'cover the basics' for 30 or 40 years IMO. I probably should have said 150% instead of 200-300%. Restating, working longer (beyond supposed FI) can only increase your odds in all probability, so why not do it even if it requires a change in employers and/or careers to be reasonably happy?

I also get the physical aspect. Despite working out regularly, at age 54, I am astonished at what I can no longer do well physically...

I have had an adequate chance to make my point, so I will just listen from here on.

It's encouraging that I haven't been attacked yet, I was not looking for a flame-off...

 

[growing_older]

I like the work I do, but I hate the stress and office politics. I have been fortunate occasionally to work in environments where the things that really get to me about the workplace were mostly not present. In such a company, I would happily continue working (perhaps part time to enjoy more time for hobby pursuits) to give my portfolio a bit more time to grow before drawing it down, or even to add modestly to it, all together enhancing security and reducing SWR. But even when I have been in a work environment to my liking, it only lasted a year or two at most before changes turned it something I couldn't abide.

As soon as I reach FI, I will want to RE. I have lots of interests to pursue, but if I miss the parts of work I liked (and I DO like the work very much) I might look for something part-time in a company with all the right environment. With no need for the money, I could be particularly picky. I cannot imagine wanting to stay after FI in a stressful office - for any manner of additional FI, but I could imagine finding something rewarding and low-stress, assuming it didn't impinge on hobbies too much. That certainly rules out full-time employment, but I have no objecting to growing assets so that SWR decreases to safer and safer levels.

 

[2B]

I am also working beyond my personal definition of FI. My personal situation keeps me from being free to travel or move like I would like so I'm hanging in there.

I actually discovered I was FI shortly after I discovered this forum in 2004 or 2005 (lurked for about a year). Everything since then has been building a bigger nest egg although I wish the stock market was helping out more.

My j*b is no stress and actually kind of fun. I make an unholy amount of money for doing one of the few things I've ever been good at. I get 4 weeks of vacation every year, work 4 day weeks and can take (almost) unlimited unpaid time off.

My personal goal is to take better vacations and spend more money on them than I normally would if I was truly "retired" and without a dependable income. After years of total cheapness, it's actually been hard to get myself and DW to loosen up.

 

[GoodSense]

I guess everyone has a difference sense of how much financial security is enough. I think somewhere around 150% of what I need gives me enough financial cushion.

My view is that you can never fully predict what will happen. If 150% of today's FI is not enough, I probably have bigger problems than money can solve (severe health issues, complete market collapse, divorce, etc.). I can't possibly plan for every worst-case scenario.

For me, the risk of not having lived a life of pursuing hobbies that I love (what I imagine what I will spend retirement doing) is much scarier than the remote possibility of having to tighten my belt at a future time, which I don't think will happen.

 

[Spanky]

My j*b is no stress and actually kind of fun. I make an unholy amount of money for doing one of the few things I've ever been good at. I get 4 weeks of vacation every year, work 4 day weeks and can take (almost) unlimited unpaid time off.

That's the kind of j*b to have. Congrats.

 

[Spanky]

In addition, who knows how long we will have good health? I love to backpack and do physical things. The earliest I can retire is age 56. How much longer after that am I going to be able to put a backpack on and hike through the wilderness?
-helen

I feel the same way. Does your significant other enjoy hiking also? DW does not like camping, hiking, or walking. Her favorite activity is shopping -- bummer. It's going to a challenge for us since our interests are quite different. I enjoy playing tennis, hiking in the woods or by the river, and biking while she likes primarily shopping. We do however enjoy dinning out and watching movies.

 

[DayDreaming]

Midpack, it sounds like your question is another take on the 'just one more year' syndrome. One could delay retirement forever, but I think it boils down the question of what you really want to do with your life. If you enjoy working at your job, then you should probably never retire, ie, why stop doing something you enjoy? If you don't enjoy what you're doing, then you find something else - either RE, or as you suggest, maybe a career change.

Myself, I think I'm close to the point of FIRE'ing, but I just want to get a better handle on my finances before I do anything drastic. And my vision of RE is really a career change to doing something I really enjoy doing but will probably never make a lot of money at. I don't want to get trapped in the 'just one more year' syndrome. All the joy has gone out of my day job, I've had 2 friends die way too young (36 and 52), there are other things I want to be doing with my life right now, so once I'm sure about the FI part, I'm gonna RE.

I certainly don't want to run out of money before I die, but I also don't want to be one of those people you hear about who never did much with his life yet died with a million buck in the bank. The way I see it, there will always be a risk, but the trick will be in not letting the fear of failure get in the way of living the life you want to live.

 

[Bikerdude]

HFWR:
One of the VP's at my MegaCorp is 70, plans to retire at 72. I am sure his net worth is staggering, so his retirement will be more carefree than I could hope for which has a certain amount of appeal. He has the good fortune of being very good at what he does, he enjoys it (obviously) as is paid handsomely for it. He could have retired 15 years ago...

Sounds like he's a finalist for the 'Richest guy in the graveyard award'. Or maybe he just likes what his job provides him, status, perks, and self esteem. Another big reason that people do not retire early is that they don't want to spend that much 'quality' time with their spouse. Only he knows.

I don't see a problem with having a small buffer built in (one or two extra years). As far as for me the 4% SWR should take care of the uncertainties of the next 30 yrs.

 

[donheff]

Midpack - my brother is 75 and happily working. I say all the more power to him. And all the more power to you --IF you like your work and see it as preferable to whatever retirement might offer. What you tend to see on an ER board are people who don't want to continue working, some, because they are burned out, others, because they want to do other things. If you want to work, by all means do.

 

[Midpack]

Midpack - my brother is 75 and happily working. I say all the more power to him. And all the more power to you --IF you like your work and see it as preferable to whatever retirement might offer. What you tend to see on an ER board are people who don't want to continue working, some, because they are burned out, others, because they want to do other things. If you want to work, by all means do.

Seems to miss my point, but I won't belabor it...

 

[Ed_The_Gypsy]

2B and I are in the same business and roughly in the same situation (except I ain't FI if we want to live in the US). It hasn't always been this good, but today...laissez les bon temps rouler!

Having said that, W2R's words haunt me:

But consider this: my father was diagnosed with terminal cancer on the day when he retired - - while he and my brother were literally moving the furniture out of his office he took an hour's break to go see his doctor, and got the news.

 

[Alan]

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"

 

[CaseInPoint]

...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.

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...

 

[HFWR]

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...

 

[audreyh1]

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.

Audrey

 

[Spanky]

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?