Stop Saving So Much for Retirement

[Loop Lawyer]

Many times people enter a field because they are interested in the work itself. But as most of us find out, even if we liked the work itself, the corporate BS -- the bureaucracy, the office politics, the contrived deadlines and urgency of everything, the wage-slave mentality -- becomes intolerable.

In fact I'd wager that many (if not most) people who desperately want out of their j*bs are looking more to escape the corporate BS that accompanies the work than are escaping the actual work itself.

Bingo! I'll admit that this is true of me, and I'm actually an "owner" of my firm (with a rather large share of the profits). But, with 500 other owners (not to mention 1,500 employees), there is far too much "corporate BS" to suit many. Biglaw, so called, is not all that different from the F500 with respect to the hassles identified above.

 

[nun]

That is true, unless what you are talking about is a religion. In this case, it evidently hurts quite a bit.

Ha

Different philosophies are always interesting to consider. I'm methodist by upbringing, Buddhist by inclination and catholic in my views (must emphasize the small c)

 

[Onward]

But I found that the work itself is fine when all the stress and annoying stuff is stripped away.

There's a vast divide between "work" and the typical employment experience. Work is what students prepare themselves for. The typical employment experience is the horrible mess most people eventually find themselves in, often inextricably. As time goes on, the two seem to have less and less to do with one another.

 

[walkinwood]

I wonder what is a larger risk - a well designed portfolio under-performing in the long run or having health issues that will prevent you from working till 70.

 

[Arnie]

It was not that many years ago that I loved my job and figured I would work forever. Things can change though. I considered aiming for ER versus w*rking longer and spending more on pleasure and ER wins my vote.

 

[Independent]

In fact I'd wager that many (if not most) people who desperately want out of their j*bs are looking more to escape the corporate BS that accompanies the work than are escaping the actual work itself.

Absolutely.

We had a poll a year or two ago on "Why did you retire?". Most answers were negatives about corporate BS in one form or another.

 

[Loop Lawyer]

It was not that many years ago that I loved my job and figured I would work forever. Things can change though. I considered aiming for ER versus w*rking longer and spending more on pleasure and ER wins my vote.

And so it was for me. For years it was terrific. And I didn't change -- my profession did. Although the changes made me richer, net of all considerations the environment is no longer to my liking.

I pat myself on the back, however, for playing good offense and, for the most part, good defense, all while the ground was moving beneath my feet. Offense and defense "financially," that is. The result is that, now that I don't like what I see in the environment, I can retire to something else (or nothing at all). The only question is, how long do I keep w*rking in an environment not much to my liking, bearing in mind that I can hang it up tomorrow if irritated "too much" today. This is a high-class problem to have and one that many denizens of this board have earned for themselves.

 

[Independent]

I liked the article in the OP. It was a refreshingly different view from the normal "You gotta save save save ..." -- although it seemed overly confusing about the financial benefits, which are just the after tax earnings from the extra work.

I had a DB pension instead of a 401k for much of my working career. If it had all been 401k, I expect that I would have worked longer. I would have tried to make a deal with my boss for 4-10 weeks of unpaid leave every year, then I could have paid for extensive, comfortable travel during those weeks with my after tax wages (knowing that I had enough 401k already built up to be FI).

 

[haha]

I wonder what is a larger risk - a well designed portfolio under-performing in the long run or having health issues that will prevent you from working till 70.

I think it would depend on what kind of job one has, and how long the portfolio is required to last.

An abrupt, acutely lethal illness is no problem for the working scenario, and likely not for the retired one.

And 70 is an arbitrary number, so if one gets disabled at 69 it is sub-optimal, but likely not a disaster, since ordinarily a disability will also shorten projected lifespan.

On the retirement scenario, if getting 40 years out of a 2% -3% SWR started when PE10 was mid-range or below is all that is being asked, it likely works fine. If one is pushing toward SWR 4%, or as is typically done, retiring after good market run has pushed up valuations, I would say planning on working until 70 is much less risky if health is the only thing that might end your career, and your job is a white collar, non-dangerous or physically demanding job.

But of course many older workers are also vulnerable to age related stereotypes that may result in them being pushed out.

Ha

 

[Lisa99]

Then again, if my j*b was enjoyable, my obsession with early retirement wouldn't be there.

There are few people in life I envy more than those who truly love their work and can't imagine not doing it (assuming they don't lose their job). I envy them more than people with large COLA'd pensions, even.

When I found this site I was at a low point in my working life....boss was nuts and work was boring. I obsessed about retiring early and started taking steps to make it happen at 55 (in 2016 I'll have co. subsidized healthcare).

I also started looking for a new job because I couldn't handle five years of misery. Several months ago I found the job of my dreams, have a wonderful boss and the company is paying me to get my LSS Black Belt certification which I've wanted to do for several years.

I love my job now and still plan to retire early but if 55 doesn't happen it won't be the end of the world as long as I'm healthy and still enjoying my job.

 

[meierlde]

It was not that many years ago that I loved my job and figured I would work forever. Things can change though. I considered aiming for ER versus w*rking longer and spending more on pleasure and ER wins my vote.

Yes I enjoyed what I was doing, then there was a merger, and things went downhill. Much more bullshit than before. So after giving it some time, I took an opportunity to leave when they were paying severance, its easy to leave when they pay you a years salary to go.

 

[nun]

paying me to get my LSS Black Belt certification which I've wanted to do for several years.

I left a job because I realized the manager who was implementing Six Sigma didn't actually understand standard deviation. He went to LSS after an unsuccessful implementation of Kaizen which was done when quality went to hell after a "downsizing" and all the most experienced (and highest paid) technicians and lab staff were laid off. We'd been doing Kaizen and LSS for 20 years, but calling it SOP

 

[Lisa99]

I left a job because I realized the manager who was implementing Six Sigma didn't actually understand standard deviation. He went to LSS after an unsuccessful implementation of Kaizen which was done when quality went to hell after a "downsizing" and all the most experienced (and highest paid) technicians and lab staff were laid off. We'd been doing Kaizen and LSS for 20 years, but calling it SOP

I'm sorry to hear that.

 

[Arnie]

its easy to leave when they pay you a years salary to go.

That would do it for me right now.

 

[FreeAtLast]

I think that it depends on the demands of the job, how your health holds out and your need / desire to work.

I don't think that the concept is new. Years ago a master craftsman would take on an apprentice to both help the master in his later years and teach the apprentice a trade.

 

[Retch The Grate]

Given that this is the "Early Retirement Forum," it seems logical to suspect that would be the default attitude, is it not? Not many people who love their jobs or are willing to keep them until full retirement age and beyond are going to be on an "Early Retirement Forum."

So you can waggle your finger at the "closed-mindedness" you seem to perceive here all you want, but remember that this is a very self-selecting sample of people who want as little to do with w*rking as possible. Expecting a different attitude might be unreasonable, IMO.

Early Retirement & Financial Independence forum supposedly. I'm here for the FI part, not so much the RE part.

 

[nun]

I'm sorry to hear that.

Yeah it was difficult, it happened when the small company I worked for was bought by a larger one and the founder was eased out. I wasn't the only one to leave and many went to work in a close by Government/academic lab so the core of our expertise was preserved. We saw the way our colleagues on the production floor were treated and basically lost all respect for the new management team. So there was a lot of Program Manager turnover. I know it's not right, but I enjoyed resigning half way through a $50M program and giving them a few headaches. The senior engineers/scientists/technical managers followed the technicians to where the work was interesting.The company took a 3 year hit and are doing less challenging work now, and making smaller profits according to people who still work there.

That whole experience really soured me and although I have a great academic job now it made me want to be financially independent so that I never have to be reliant on people I don't respect again. That includes financial advisers too.

 

[obgyn65]

IMO we are more likely to have health issues that prevent us from working till 70 than an underperforming portfolio...

I wonder what is a larger risk - a well designed portfolio under-performing in the long run or having health issues that will prevent you from working till 70.

 

[growing_older]

Another take on the idea of spreading one's earnings over more years by spreading one's spending (usually described as fabulous vacations) over more years, leaving a shorter full-time retirement at the end. If you love your job, if you would rather take time off a few weeks at a time instead of years at a time, if you have nothing in particular you'd rather be doing if you had all the time you wanted and if you believe that you can absolutely count on the future to go just like you planned it, then maybe you will enjoy this plan. I think I prefer a plan that can accommodate unexpected changes more easily. It's all in the gray area in the middle anyway.

If I live as cheaply as possible - and save 90+% of my income I can retire sooner. But this is too austere for me. If I save nothing for retirement and enjoy all of my income, I cannot retire but I maximize my current spending. This is optimizing something I don't care as much about at the expense of retirement free time that I do care about. So I am going to have to make a plan somewhere in the middle of these extremes.

My concern with the article is that there is too great a chance of the unexpected derailing that plan. Loss of job, economy problems, health issues, divorce, any number of things could leave me high and dry with little savings, few options and not get the full benefits that the "plan" promised, but only when it works out. On the other hand, if I save a reasonable amount I will have resources and options when I am old enough to retire early. I can always choose to keep working (and take as many of those fabulous cruise vacations as I want) if I have options. I don't have to be austere to make this work, in fact I can still take some fabulous vacations that don't use perhaps quite as much money all along the way, or whatever else I want to spend. I get to make the choices, not get forced into them because I spent all my resources earlier and have none left.

Currently my portfolio is on track to earn more than I contribute, and it will keep outpacing me for many years. I will have more to spend (a lot more) if I just wait a little while and I am happy with that small sacrifice now (and it is pretty small) for a big gain later. Maybe if I had to make a big, big sacrifice I wouldn't be as happy with the tradeoff, but that's the wonderful part. Everyone can decide how much to save now. The article's author can spend current resources and hope the world works the way they count on until age 70 if they want. It's not my choice.

 

[67walkon]

I see some wisdom in that. In 2007, I had open heart surgery to correct a congenitally deformed aortic valve that never caused the first symptom but caused an aneurysm that was going to kill me if I didn't get it fixed. At 58, I decided work would survive if I didn't put in 50 hour weeks. 2 or 3 days a week, I started coming in around 9:30 after riding my road bike 25 miles. Life went on.

Next year, after I turn 62 toward the end of this year, I'm not working full time any more. They can take it or leave it, but I'm going to work about half time. I'm a trial lawyer and I can switch over to being a mediator and maybe do a trial or two a year. I'm willing to take a lot less money, but if I can make $50,000 or so a year working 25 or so weeks a year, I might do that until I'm 70. I don't see anything wrong with that kind of plan. If I don't like it, I have enough savings to outright quit work. If I do like the part time thing, and if anyone will actually pay me to do it, working half time doesn't sound all that bad.

Having said all that, I do tend to think that once I am away from my profession for a month or so, I won't want to go back. But, hey, if someone wants to pay me $350 an hour to try to mediate silly disputes, why not?

 

[GregLee]

I don't see anything wrong with that kind of plan.

No, it sounds like you're in the catbird seat. This is a catbird:

 

[jacob]

That article also came up over on my forums. The conclusion was essentially: anything to jump start the economy, eh? Stop saving and spend-spend-spend. Consumerism needs buy-ins; otherwise it doesn't work. In particular, people (boomers?) are beginning to realize that they should have saved far more than the 10-15% they have(n't) been saving, because they can't keep relying on those fictitious 10% annual returns that all the "how you to can become a millionaire"-gurus promote.

In my completely objective and unbiased opinion, working until you're 70 in return for two weeks on a cruise ship is a complete joke. Who's hiring 70 year olds these days other than Walmart? This may work for some academics or top level level managers, but I bet the majority will be out up luck. If anything, save more, not less. If you decide you don't like work when you're XX years old and FI, at least you'll have the option. I don't think any number of bedrooms or safari trips can adequately substitute from the feeling of financial independence.

 

[Mickslick]

In fact I'd wager that many (if not most) people who desperately want out of their j*bs are looking more to escape the corporate BS that accompanies the work than are escaping the actual work itself.

This is why I bailed, it wasn't the work, it was the other stuff.

 

[FIREd]

...it wasn't the work, it was the other stuff.

Ditto for DW and me.

Anyways, this is yet another article trying to convince us that retiring and preparing for retirement is so 20th century. My FIL never saved much money because he was convinced he would never retire. Of course things didn't work out as planned. Here he is now, 63, jobless for the past 3 years, no savings, no health insurance and overdue bills as far as the eyes can see. I am sure that, right about now, he would love to get back the money he spent on "cruises and other indulgences" and not have to worry about how he's gonna keep a roof over his head.

 

[DesiGirl]

70? that is crazy. I retired after 10 years of work at ripe age of 32 to stay at home with my kids. My Hubby is still chugging but the plan is to get him out before 45. I work a lot but not for money and I do mostly what I want to do and what needs to be done for my family (My top priority in life as it stands currently). Happiness does not equate to how much money you have and how much you are consuming, its comes from inside.. so to each his/her own ... nothing against bigger houses and long cruises ... but that is not what will get you inner peace and happiness ..... I think proper balance and prioritization of what you want in Life is the key.