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Retirement vs Financial Independence
Old 03-17-2014, 11:26 AM   #1
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Retirement vs Financial Independence

Interesting article on CNBC today: Save and plan for financial independence, not retirement .

This definitly resonates with me. I am currently 46, with a great wife, two kids in high school and college bills right around the corner, facing a potential lay off in the next 2-3 months and a net worth over $1m. Perhaps of my situation and that I am really ready to move into something new and more enjoyable, the idea of working longer but in an area of interest even with less pay seems like a great way forward.

Thoughts? Anyone else been in my situation and re-directed career to a better work/life balance in an area they enjoyed?

Thanks
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Old 03-17-2014, 11:35 AM   #2
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Yes, I did. However I did it within the same company that had, and has been downsizing for 20 years. I saw the writing on the wall and applied for a position that was completely different from what had been my career path to that point in time. I was 48.

It meant a slight pay decrease at first however incentives and performance bonuses soon remedied that. It meant a move to a different city and uprooting my two high school age children.

It was one of the best things that we have ever done. Stayed with megacorp for another 11 high earning years, protected my pension, and now we have no plans in moving back to where we lived for many years.

For me, it was a choice of waiting for something to happen at work, ie downsizing, or proactively going out and looking for another opportunity in the same company before it happened.
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Old 03-17-2014, 11:42 AM   #3
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My cynical view is this is just another 'work until you drop dead' article. The variation here is that by being FI we can go without any government or charitable assistance when we are between jobs or need to update our skill set. Then we can continue being good little workers once we get the new improved job.

That said, I am on career path number 4, in my 'who moved my cheese' career path. Each career built on the other in some way, so I'm still doing work I like.
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Old 03-17-2014, 12:25 PM   #4
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My cynical view is this is just another 'work until you drop dead' article. The variation here is that by being FI we can go without any government or charitable assistance when we are between jobs or need to update our skill set. Then we can continue being good little workers once we get the new improved job.
The CFP that we used last year forcefully projected the "financial independence" message in our discussions. I've come to understand it, in retrospect, as a cop-out and otherwise indefensible effort to steer the conversation away from what we wanted assistance with and toward something that the CFP could more readily claim they're providing.

There are a few bits of the article that I take especial exception to:
Quote:
But they continue to work because they think they'll find more satisfaction by staying in the game and contributing to society rather than living a life of leisure.
Society is best served by having jobs filled by those who actually need to earn income to pay their bills and secure their future. Society is not served by people working jobs that effectively do little more than increase the worker's estate upon death.

Quote:
studies have shown that if people aren't engaged in volunteerism by midlife, they won't be engaged in it during retirement.
I challenge the author to present the full data, including the causes. Hint: If the studies don't exclude everyone who work long past retirement age because they need the money, and don't stop working until health prevents them from doing anything substantial, then the author's comment is patently deceptive, shining more light on the author's intent to deceive than anything substantially related to the topic the author is discussing.

Quote:
In the not-so-distant past, people worked at physically demanding jobs until the day they died.
The unanswered question is whether the author is attempting to communicate the message that that's the way things should go back to being? If not, then why raise the issue? If so, then why not be upfront about it?

Quote:
Financial independence is a much worthier goal than traditional retirement.
False. They're both worthy goals. And moreover, the former helps achieve the latter, but that does not mean that the latter is not a worthy goal, nor in any way legitimizes marginalizing the pursue of the latter.

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Originally Posted by timo2 View Post
That said, I am on career path number 4, in my 'who moved my cheese' career path. Each career built on the other in some way, so I'm still doing work I like.
I'm in my second career, having left behind my first career after realizing that even at the top (and I was pretty close to the top of my field), with all the money and power, it was still a miserable existence. That's not to say struggling to make ends meet or worrying about running out of money before we die is a picnic.
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Old 03-17-2014, 12:53 PM   #5
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Early retirement is not for everyone. While this forum is very focused on it, we represent a very small minority of the population. This article applies to the masses, even if it doesn't apply specifically to us.

Many reach FI but do not retire, for various reasons. I retired last year at 46, but chose to continue with some part time work just to keep a little income flowing in, and to adjust to the shock of going from being extremely busy to having no "work" responsibilities at all. So far, it's been fantastic. But, as I said, it's not for everyone.
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Old 03-17-2014, 01:05 PM   #6
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Early retirement is not for everyone. While this forum is very focused on it, we represent a very small minority of the population. This article applies to the masses, even if it doesn't apply specifically to us.
True, but keep in mind that the article is not just sidestepping early retirement, but retirement, unqualified.
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Old 03-17-2014, 01:29 PM   #7
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Maybe these articles are a good thing. We need all of them working, funding (not drawing from) SS, paying taxes, buying things they don't need and cant afford to help the economy and help the rest of us enjoy active, low tax retirement. More power to them. I will remember them while I am kayaking in the lagoon, helping out teaching students at our SE Asian NGO, traveling, gardening around our patio, coding for fun, etc. No, I will probably not think about them at all.
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Old 03-17-2014, 02:06 PM   #8
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We are FI but we have some income generating hobbies. These are our hobbies so we have no reason to ever stop unless we become mentally or physically incapacitated.
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Old 03-17-2014, 02:13 PM   #9
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Maybe these articles are a good thing. We need all of them working, funding (not drawing from) SS, paying taxes, buying things they don't need and cant afford to help the economy and help the rest of us enjoy active, low tax retirement. More power to them. I will remember them while I am kayaking in the lagoon, helping out teaching students at our SE Asian NGO, traveling, gardening around our patio, coding for fun, etc. No, I will probably not think about them at all.
+1!

We are FI and seeking ER. I have thousand things in my bucket list and work is preventing me from reducing my list.
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Old 03-17-2014, 03:00 PM   #10
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This is how I think:

Financially Independent AND Retired is my goal.

FI but not Retired is confusing to me.

Not FI AND working part time means my goal will be delayed.
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Old 03-17-2014, 03:19 PM   #11
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I was always focused on FIRE while DW is more focused on FI than RE. Different strokes for different folks, I see no right or wrong in this matter.
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Old 03-17-2014, 03:34 PM   #12
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One should always be focused on the FI part. After that, all your options open up. If you like what you do, keep doing what you're doing. If you want to do something different, you can. It's all about enjoying this one life we have been given. Working beyond burnout is stupid. Guess I've been stupid for the past 15 years...FIRE date 2015.
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Old 03-17-2014, 03:40 PM   #13
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FI so I can RE on my terms. I found that once your reach FI the BS stuff at work doesn't mean much.
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Old 03-17-2014, 03:51 PM   #14
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20 yrs. INTJ. In my humble (heh,heh) independant judgement Society can go pound sand. I took great, may I say overwhelming satistisfation in turning down an opportunity to volunteer yet again last week.

Some (or justme) love to meditate on the sound of one hand clapping, watching grass grow, or just plain 'doing nothing in particular.'



heh heh heh - 20 yrs and counting.Sooo is watching football in season and buying a few good stocks once in a while work ? Nah!
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Old 03-17-2014, 04:10 PM   #15
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Quote:
Originally Posted by Pharmmgr View Post
Interesting article on CNBC today: Save and plan for financial independence, not retirement .

This definitly resonates with me. I am currently 46, with a great wife, two kids in high school and college bills right around the corner, facing a potential lay off in the next 2-3 months and a net worth over $1m. Perhaps of my situation and that I am really ready to move into something new and more enjoyable, the idea of working longer but in an area of interest even with less pay seems like a great way forward.

Thoughts? Anyone else been in my situation and re-directed career to a better work/life balance in an area they enjoyed?

Thanks

Absolutely. By 42 I hope to reach FI. I don't know if I will stop working, but I do know I will stop doing what I am doing now and likely take a (paycheck) paycut. Fortunately, other income streams will make up for that. My savings rate may go down, or I may stop working at all... The point is having that freedom to choose my path. That is what I am saving for.
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Old 03-17-2014, 06:11 PM   #16
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One should always be focused on the FI part. After that, all your options open up. If you like what you do, keep doing what you're doing. If you want to do something different, you can. It's all about enjoying this one life we have been given.
+1
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Old 03-17-2014, 06:32 PM   #17
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Agree that in principle, FI enables one to be able to retire. If a person wants to work more, or just wants the extra money to spend more than they may be comfortable with their withdrawls, then go for it.

I concur 100% with robnplunder, work gets in the way of me doing my bucket list items!
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Old 03-17-2014, 06:33 PM   #18
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I do not find "reaching FI" to be a static situation, like crossing a finish line. There is a theoretical number one would like to have accumulated to pass the tests in all of the various retirement calculators on the internet, as if somehow passing every one of them somehow declares you to be FI.

I think it's more of a general guideline and high level goal to reach, but many people who say they are FI are not 100% confident that their money will last a lifetime.

There are several reasons for this. First of all, most of the calculators assume a retirement age of around 65. There have been many posts about the challenges of using a 50 year time horizon with Firecalc, and the limited number of runs available to test.

Past results from the markets are no guarantee of future results. We have no idea what will happen in the markets over the next 50 years, nor how inflation will impact us.

We may know what our run rate expenses are based on past history, but we can not completely predict what our expenses may be in the future. Life is full of surprises. Not to mention that many of us may find that with all the free time we have in retirement we want to spend money on things that we simply did not have time to enjoy during our working years.

So while it may seem odd to find people who say they are FI but still working, I can relate to it. It's one thing to be FI, and it's another thing to have so much money that you can't possibly conceive of a scenario where anything could go wrong. I suspect most of us are the former, and very few the latter.
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Old 03-17-2014, 06:36 PM   #19
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Originally Posted by Ready View Post
I do not find "reaching FI" to be a static situation, like crossing a finish line. There is a theoretical number one would like to have accumulated to pass the tests in all of the various retirement calculators on the internet, as if somehow passing every one of them somehow declares you to be FI.

I think it's more of a general guideline and high level goal to reach, but many people who say they are FI are not 100% confident that their money will last a lifetime.

There are several reasons for this. First of all, most of the calculators assume a retirement age of around 65. There have been many posts about the challenges of using a 50 year time horizon with Firecalc, and the limited number of runs available to test.

Past results from the markets are no guarantee of future results. We have no idea what will happen in the markets over the next 50 years, nor how inflation will impact us.

We may know what our run rate expenses are based on past history, but we can not completely predict what our expenses may be in the future. Life is full of surprises. Not to mention that many of us may find that with all the free time we have in retirement we want to spend money on things that we simply did not have time to enjoy during our working years.

So while it may seem odd to find people who say they are FI but still working, I can relate to it. It's one thing to be FI, and it's another thing to have so much money that you can't possibly conceive of a scenario where anything could go wrong. I suspect most of us are the former, and very few the latter.
So, are you saying that you are not really Ready?
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Old 03-17-2014, 06:41 PM   #20
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So, are you saying that you are not really Ready?
You know, it's a funny thing, but while we probably give great thought about when to go from lurking on this forum to actively participating, it's not until we set up our login credentials that we are asked to pick a screen name. I was so fed up with work last year when I joined that the only thing I could think of for my screen name was ready, because I was so ready to get the hell out of there.

Am I ready? I don't know. I hang on to this part time thing to keep my toe in the water. So while I don't have any desire to go back to work, there is a slight comfort, like a nice warm blanket, of keeping a toe or two in the working world. Every calculator tells me I don't need to. The only thing I have left to achieve is to actually believe them.
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