Planning vs. over-planning for retirement

[Calico]

I think one of the things that keeps many of us posting here is a common interest in planning and future modeling, working on goals, tracking milestones, etc. I don't know many people offline with these same interests.

Many here are probably more future planners like the chipmunks in this article from The Onion -

Chipmunk

"Researchers also repeatedly witnessed the small quadruped stuffing its cheeks with seeds and nuts and depositing them in one of its subterranean chambers for consumption during winter, displaying an inclination toward saving resources for the future that had “almost no behavioral equivalent” among U.S. citizens."

Thank you for this! It made me laugh out loud several times. I am an honorary chipmunk, and I may start using that as my response when my coworkers ask me why I don't join them for their three-times-a-week lunches out, or why I don't take a cruise for my vacation, or why I don't buy a "nicer" car. They already think I'm crazy, so telling them I am a chipmunk probably won't change their opinion of me one bit.

 

[daylatedollarshort]

Thank you for this! It made me laugh out loud several times. I am an honorary chipmunk, and I may start using that as my response when my coworkers ask me why I don't join them for their three-times-a-week lunches out, or why I don't take a cruise for my vacation, or why I don't buy a "nicer" car. They already think I'm crazy, so telling them I am a chipmunk probably won't change their opinion of me one bit.

I have friends and relatives who will confide all these horrible financial predicaments, then tell me about their latest cruise, vacation or shopping expedition.

I just try to be a sympathetic listener and never give any unsolicited advice, but I really don't get their life and financial decisions on a really fundamental level. I would be a nervous wreck living like that. I would rather live like the chipmunk.

 

[Calico]

I have friends and relatives who will confide all these horrible financial predicaments, then tell me about their latest cruise, vacation or shopping expedition.

I just try to be a sympathetic listener and never give any unsolicited advice, but I really don't get their life and financial decisions on a really fundamental level. I would be a nervous wreck living like that. I would rather live like the chipmunk.

I learned long ago that giving advice is a waste of breath. I just go on burying my seeds in my burrow and sleep soundly at night.

 

[Meadbh]

I think one of the things that keeps many of us posting here is a common interest in planning and future modeling, working on goals, tracking milestones, etc. I don't know many people offline with these same interests.

Many here are probably more future planners like the chipmunks in this article from The Onion -

Chipmunk

"Researchers also repeatedly witnessed the small quadruped stuffing its cheeks with seeds and nuts and depositing them in one of its subterranean chambers for consumption during winter, displaying an inclination toward saving resources for the future that had “almost no behavioral equivalent” among U.S. citizens."

I love it! I think we should adopt the chipmunk as our mascot on ER.org.

 

[daylatedollarshort]

I think there is actually a lot of FIRE related wisdom in The Onion articles. This other one is also good -

Man still trying to find right work-anxiety-life-anxiety balance -

Man Still Trying To Find Right Work-Anxiety

"It seems like I’m always so busy dwelling on the countless dilemmas that come up in the office that I barely have any time to stress over the problems facing me at home,” said Humphrey, 38, noting that the demands of worrying about work leave him precious little time to worry about his family, health, and finances.....I just wish I had the time to freak out about both my job and my personal life without feeling like I’m neglecting the other."

 

[pb4uski]

During my working years, I regularly used Quicken (the anal accountant in my I guess) and regularly updated Lifetime Planner and looked at some what-ifs (probably a couple times a year). As I approached a final decision, I went on a retirement analysis binge and looked at my situation 20 different ways from Sunday and they all pointed to my being ready. Now that I am ERd, I only look at it a few times a year as a check to make sure things are ok.

Actually the market has been so good since I ERd that I am far ahead of where I thought I'd be when I retired. [-]Whee.... [/-]

 

[Options]

It's interesting that most folks have responded to Eddie about planning in a financial sense. I agree that it is extremely important to do that to have peace of mind in retirement.
But I'm curious to see more discussion of "over-planning" for the lifestyle aspects of retirement.

I'm probably the strangest one here, as I'm over-planning-while-leaving-lots-of-options-open with respect to the lifestyle aspect, in addition to the financial. For me, FIRE will represent a big life change: changing cities, downsizing, doing much more travel than I've done in past 10 years,changing personal values, even possibly having more money to spend than I do now (currently mega LBYM here!). Most important, will at some point work with homeless youth before moving/downsizing (lost angeles has second largest concentration of homeless youth in the country). Given my passion about the subject, what if it led to a second "c*reer"? Anything's possible, but even if it did turn into something I got deeply involved with, I would never, ever work at it, and certainly wouldn't do it for the money (wouldn't have to). Will never do the j*b thing again, regardless.

It's been said you should be retiring to something, not from something. Recently realized I am indeed retiring from a field I am currently emotionally/psychologically divorced from, while simultaneously retiring to a big new phase of my life, whatever that turns out to be. It's exciting, but quite fluid.

So, yea. I'm strange...

 

[48Fire]

I wonder if anyone else has had the experience of realizing that their planning for retirement was taking the fun out of retirement?

Here's what I mean. I'm sure everyone has read that the people who are happiest in retirement are those who plan for it. So, planning is good. I'm a planner by nature, a rather organized and analytical person, so I dove in. I prepared.

And prepared ... and prepared. I analyzed my financial situation multiple times. I repeatedly looked at the issue of how I would occupy my time. I analyzed where I should live, from a variety of different angles. I thought about multiple different lifestyle options. I won't go into the details of all analyses, because I'd bore you. Suffice to say, I prepared for retirement ... a lot.

A week ago, it occurred to me that all this analysis and preparation was taking a lot of the fun out of it.

When I think about retirement, which is about 45 weeks away, what I most love about the idea is the freedom of it, combined with the idea that this is a time in your life to re-explore who you are, what really matters to you, to rest and then go deep again and find what you want to do next. To explore. To discover.

But all of that is something you make up or find out along the way. It is not something that you plan and arrange in advance. If you do, you've taken the exploration and discovery out of it.

All my planning and list-making and analysis were helpful -- don't get me wrong, I'm not saying "Don't prepare," especially from the financial angle -- but at a certain point, all the planning started to drain the life out of my sense of retirement, to constrict and restrict my view of the future. Others may feel differently, but for me, that sense that things are wide open, that there are multiple roads you can take and a sense of mystery about what lies around the next bend ... that's all a very important part of what I hope my retirement years to be.

It was an odd thing, to realize that my retirement planning was actually draining the life out of my retirement, robbing it of its sense of adventure and exploration.

So, I have learned to put down the lists, the analyses, the multiple files and documents ... to stop over-planning for retirement. I am leaving well enough alone. The rest, I will make up along the way, once I get there.

Ever since I made that shift, I have felt a sense of joy again about anticipating retirement. Lesson learned: you can definitely over-plan for retirement, to the point where you drain the fun out of it.

Anyway, just thought I'd share.

I agee that I can suffer from over-planning. Fortunately my wife is very spontaneous, so I try to put down the spreadsheets, and just have fun. I am debating about giving up Quicken, Excel, and all of the rest of the tools that I was a slave to during my accumulation phase. Yesterday we just dropped everything and went on a short road trip. Great day and it was not planned.

 

[Jager]

I've loved finance and investing for years. And planning for FIRE is truly a joy for me, especially as what once was only a distant dream slowly sharpened into view. Like you, Eddie, I'm not too far from that finish line.

When I've had a crappy few hours at work, logging in here and reading a few threads is a surefire pick-me-up. And for the first time in my life I truly look forward to paying my bills - because it's then that I can update my retirement spreadsheet and get one more affirmation that the plan I mapped out is, indeed, running as expected.

I haven't spent too much time worrying about or planning for the non-finance aspects of retirement. I was unemployed for fifteen months back in 2001-2003 and that experience - minus the several hours every day I spent looking for work; and the financial worry that colored everything - gave me a glimpse into what that kind of life could be like. That, and that I still have the dreams of a young man to get back to.

Mostly, all the spreadsheets and all the planning are my talismans against what otherwise would be a tragedy. Last night, as every night, I woke a couple times. As I'm always wont to do when rousing from sleep, I raised my head and glanced at the alarm. Early in the night - say midnight or 1am - you process that time with a sigh of relief. Still a few more hours before you have to get up. You can close your eyes and get back to that dream. Come 3:30 or 4ish, though, and that relief turns to dread.

Kind of the middle-of-the-night version of the Sunday evening blues.

What underlies all the planning and thinking and reading is the hope all that will soon be done.

There's magic in that.

 

[48Fire]

Mostly, all the spreadsheets and all the planning are my talismans against what otherwise would be a tragedy. Last night, as every night, I woke a couple times. As I'm always wont to do when rousing from sleep, I raised my head and glanced at the alarm. Early in the night - say midnight or 1am - you process that time with a sigh of relief. Still a few more hours before you have to get up. You can close your eyes and get back to that dream. Come 3:30 or 4ish, though, and that relief turns to dread.

Kind of the middle-of-the-night version of the Sunday evening blues.

What underlies all the planning and thinking and reading is the hope all that will soon be done.

There's magic in that.

I had those nights, too. 3 months post ER, and they have disappeared. Something you can look forward to

 

[Calico]

I've loved finance and investing for years. And planning for FIRE is truly a joy for me, especially as what once was only a distant dream slowly sharpened into view. Like you, Eddie, I'm not too far from that finish line.

When I've had a crappy few hours at work, logging in here and reading a few threads is a surefire pick-me-up. And for the first time in my life I truly look forward to paying my bills - because it's then that I can update my retirement spreadsheet and get one more affirmation that the plan I mapped out is, indeed, running as expected.

I haven't spent too much time worrying about or planning for the non-finance aspects of retirement. I was unemployed for fifteen months back in 2001-2003 and that experience - minus the several hours every day I spent looking for work; and the financial worry that colored everything - gave me a glimpse into what that kind of life could be like. That, and that I still have the dreams of a young man to get back to.

Mostly, all the spreadsheets and all the planning are my talismans against what otherwise would be a tragedy. Last night, as every night, I woke a couple times. As I'm always wont to do when rousing from sleep, I raised my head and glanced at the alarm. Early in the night - say midnight or 1am - you process that time with a sigh of relief. Still a few more hours before you have to get up. You can close your eyes and get back to that dream. Come 3:30 or 4ish, though, and that relief turns to dread.

Kind of the middle-of-the-night version of the Sunday evening blues.

What underlies all the planning and thinking and reading is the hope all that will soon be done.

There's magic in that.

So I'm not the only one who wakes up at 3:30 am with that feeling of dread.

My spreadsheets and my planning and my countdowns are what keep me going - one foot in front of the other, slow and steady, and I know I will make it to the finish line. But boy those 3:30 am moments are killers.

 

[Options]

So I'm not the only one who wakes up at 3:30 am with that feeling of dread.

My spreadsheets and my planning and my countdowns are what keep me going - one foot in front of the other, slow and steady, and I know I will make it to the finish line. But boy those 3:30 am moments are killers.

+1
For me, it's about half hour before I have to get up...

 

[Bigal50]

I too am a planner. Focused on ER since I was 18. Then when the ER date approached, I adopted my motto, 'wake up each morning and decide what to do!'.

I have ultimate freedom. Sure, I have projects, book groups, play golf. But I make sure I have 3 days a week totally unscheduled so I can follow my whims and LIVE IN AN UNPLANNED WORLD! It's wonderful! And quite refreshing to be the anti-me!

 

[donheff]

Lots of people have those 3:30 wake ups. I mostly liked my job but the problems and challenges still popped my eyes open in the wee hours. But 48Fire is right -- that disappeared post ER. Keep looking at your spread sheets, time flies.

 

[Al in Ohio]

+1
For me, it's about half hour before I have to get up...

That brings up the start of another good mini thread:

"During your w*rking years what was the average wake up time during the weekday before getting ready for your w*rkday?

For me it averaged about 7:30 am. I am not a morning person, so that's several hours before my natural waking time if I did not have to work. My normal wake sleep cycle when not working is probably 9:30 am - 1:30 am and anything else seems to burden me. Not having to wake by an alarm before say 8:30 or earlier is something I very much look forward to.

 

[donheff]

That brings up the start of another good mini thread:

"During your w*rking years what was the average wake up time during the weekday before getting ready for your w*rkday?

I generally got up at about 6:00 AM and for a while at 5:30 AM and visited the gym before heading in to work. Now my reduced cost membership only covers the civilized hours of 9:00 AM to 3:00 PM.

 

[ER Eddie]

Excellent book for those of us who are trying (not so successfully; see below) to shift out of the over-planning mindset and into a more spontaneous, exploratory one:

Free Play: Improvisation in Life and Art

Free Play: Improvisation in Life and Art: Stephen Nachmanovitch: 9780874776317: Amazon.com: Books

Good customer reviews. I am only a few chapters in, but I like it quite a bit. It certainly helps to bring me back into the present moment and see the potential for creativity there, rather than always fussing about the future.

However, I'm also back to my usual analytical ways, looking at all the states and cities where I might live, narrowing the list down based on a cornucopia of factors. I think it's worthwhile. Analysis has its place.

 

[kz]

Financially I planned our retirement for years and then DH retired two years sooner than I thought he would. (I was already retired a lot sooner than I had planned...long story) Worked out fantastically!
DH then decided he wanted somewhere to go and something to do so he went back to work part-time. It's been 8 years and he is still loving the work and the schedule is fantastic. (5 days on/9 days off)
Have been spending time planning approx. 3 semi-long and 5 mini vacations each year and then the children/grandchildren threw a wrench in the plans by living in areas of the country we didn't expect or plan for. I can only say that new adventures have been wonderful and we are anticipating even better adventures in the next few years!
What a great ride!

 

[NW-Bound]

I wonder if anyone else has had the experience of realizing that their planning for retirement was taking the fun out of retirement?

...

It was an odd thing, to realize that my retirement planning was actually draining the life out of my retirement, robbing it of its sense of adventure and exploration.

So, I have learned to put down the lists, the analyses, the multiple files and documents ... to stop over-planning for retirement. I am leaving well enough alone. The rest, I will make up along the way, once I get there.

Ever since I made that shift, I have felt a sense of joy again about anticipating retirement. Lesson learned: you can definitely over-plan for retirement, to the point where you drain the fun out of it...

Count me among the few here who underplanned his retirement.

I was just plodding along, thinking that I would do some part-time contract (W2) and free-lance (1099) work forever. Then, one day I wondered if I had enough to stop work. The search for that SWR on the Web led me to FIRECalc, and this forum.

OK, so 4% it is. Well, cut it back to 3.5% to be safe, and there's future SS too. That ought to be enough margin. No, couldn't do that yet as my children were still in college, and I wanted to give them a headstart without student loans. Meanwhile, I started to track my expenses with Quicken to see what they were. Whoa! I spent a heck of a lot more than 3.5% of portfolio. Better keep working...

Then, last year, when my son was out of school, and I happened to see that our ongoing expenses for the same living conditions were exactly 3.5%, plus I felt a bit tired with the work politics, I simply decided to stop work.

No spreadsheets ever. All I did and am still doing now is to look at my Quicken screen every so often. If it's 3.5%WR, I am doing OK. I also look at the discretionary expenses to see what I can cut back if things get tough again.

That frees up a lot of time to me to think of places to take my RV, or to look for random things on the Web, to finish reading my books, etc...

 

[CoolChange]

Count me among the few here who underplanned his retirement.
...

This is great news to me since you seem to be having a very successful retirement.

I stopped spreadsheeting and worrying about the last .x% some time ago; of course, I have not been able to pull the plug either way. But, I am sure I will next year...Just one more year of income and I am sure I will feel better about this whole ER thing.

 

[brett]

We planned to a certain degree. We were conservative on the financial side.

The only real plan we made was to sell our large home, place everything in storage, travel for 6-9 months , and then come back and buy a new home.

So, we have found that many of our plans have changed. For one, we are very happy in a downsized rental condo, down from 3600 plus sq feet to 1350 sq. feet. We no longer accumulate.

We thought that we would keep 2 vehicles. One has gone. We were very certain about the type of home that we would buy on our return. That has gone out the window. Our priorities and preferences seem to have changed over a relatively short time period.

The only part of the plan that has gone to plan is that we are very pleased with our fee for service financial advisor. I no longer pour over the market details every day or so.. We do quarterly with the advisor or as required, plus once a year with our tax accountant.

We just last week signed up for a last minute cruise. We will do the same for other trips.

Now that we are retired we find a great deal of freedom in not planning as much. We can go where we want, when we want, and for as long as we want.

 

[Major Tom]

I think I'm in a similar boat to NW-Bound (under-planning), though I'd categorize my approach as involving much thought but not a great deal of analysis. While living on unemployment benefits as a result of a layoff, it slowly dawned on me that maybe I didn't have to go back to work. I am now living on a little less than I was pulling in while unemployed.

My lifestyle and expenditures are so simple that I have no need for Quicken (no family, no kids, don't own any property, no car), and I know how much I need every month to get by. The rest was a simple matter of deciding on an asset allocation for the portfolio and many happy hours spent running multiple (and very similar) scenarios through Firecalc (aaah, the appeal of repetitive behavior!)

The only thing I haven't figured out is who to give my money to when I kick the bucket and how to ensure that happens. I'm still thinking about that one.

 

[CoolChange]

... The only thing I haven't figured out is who to give my money to when I kick the bucket and how to ensure that happens. I'm still thinking about that one.

I am happy to volunteer my services to willing accept anything you have left over at the end and get the needed legal documents in place.

 

[F4mandolin]

I was a late ER person as well. With hindsight...sure wish I had done things a lot differently and I would have had more $$. I just don't want to plan very much. I am still very very very tempted to just stick most of the money we have into something like the Wellington fund and let it do the thinking for me.....and probably a lot better.

 

[NW-Bound]

This is great news to me since you seem to be having a very successful retirement.

I stopped spreadsheeting and worrying about the last .x% some time ago; of course, I have not been able to pull the plug either way. But, I am sure I will next year...Just one more year of income and I am sure I will feel better about this whole ER thing.

My earned income stopped only last year, so it's a bit early to tell. However, I have tracked expenses for long enough to establish the 3.5% baseline. Once one has run FIRECalc and sees that a 3.5%WR looks reasonably safe with SS as an additional margin, what's left to do? Well, there are a few things I do consider.

On the income side, what if my stash fails to provide the long-term income that FIRECalc's past performance indicates? Well, I'll just have to scale back my expenses. Could it be up to the point of downsizing to an RV parked in New Mexico's state parks? That would be a SHTF scenario. A lot of people would be hurting not just me, so we will be all in this together. Misery loves company.

On the expense side, what if my expenses consistently run over 3.5%? But that is under my control, hence I watch expenses with Quicken. Expenses due to lifestyle creep should be detectable with enough time to correct. Extra unplanned expenses due to one-time events can also be corrected if needed by cutting back on discretionary spending. If extra expenses are of a catastrophic magnitude, then perhaps I did not do enough homework like buying adequate insurance, but that is required planning at all time, and is not part of retirement planning.

I think I'm in a similar boat to NW-Bound (under-planning), though I'd categorize my approach as involving much thought but not a great deal of analysis...

My lifestyle and expenditures are so simple that I have no need for Quicken (no family, no kids, don't own any property, no car), and I know how much I need every month to get by. The rest was a simple matter of deciding on an asset allocation for the portfolio and many happy hours spent running multiple (and very similar) scenarios through Firecalc (aaah, the appeal of repetitive behavior!)

I use Quicken expense tracking because I tend to spend in spurt. It's easy to overspend without realizing it. Another thing Quicken does for me is portfolio performance tracking for the income side of the cash flow.

Regarding spreadsheets, I am no stranger to very elaborate Monte Carlo simulations (written in Fortran and C), having written a few myself which involved more than 100 random variables. In my work life, I dealt with scientific calculations that required very precise algorithms; the variables were under tight measurement control and their bounds were defined but together they caused variations in the outcome. Events in history are not well-defined like the above though. There are so many unknowns with not well-defined bounds, and even "unknown" unknowns.

On the personal level, as healthy as I thought I was, I got an illness that required major surgeries and it still threatens to shorten my life significantly. That came out of nowhere. I already bought health insurance for that unlikely event, which unfortunately happened. What else could I have done differently?

Me worrying about the last .x% now?