Article - Retire but don't quit your job

[Gatordoc50]

Oh great. Another article on how you can't have your cake or eat it too.

 

[shotgunner]

Reading the replies and some additional thought the article would have been better if it were titled "When to stop saving and start living more". The strategy I chose for that, at age 51, was semi-retirement. I have been 4 years in semi-retirement, working 20 hours a week at what was my full-time job, paid an hourly wage without benefits. I have afternoons off usually but can flex my time as needed. Bottom line, where I worked needed me more than I needed them. I had the financial resources to walk away and then they scrambled to get me back in some capacity. I feel better about work and enjoy it where before it was a grind and I was worn out. The funny thing is I have consistently been able to outperform two full time colleagues by some objective measures. That really annoys them because management is really on their case (the entertainment value of that is a benefit). Liz Weston lost her credibility with me 6 years ago when she declared her and her husband millionaires but had to include home equity to reach 7 digits. Had not thought much about her since then and will even less now.

 

[rescueme]

Now in my case, I think the time is more valuable than the money, but others may not see it that way.

Some do ...

 

[sengsational]

Great discussion here...never would have happened if the had given the article an honest (non-misleading) title. It was the same old story about the affordability of retirement, with 2% content about spending on travel and other retirement kinds of things. And as mentioned earlier, no detail as to how you'd manage, given you'd be at work instead of 3 weeks in Tahiti. Anyone read the 4 hour work week? If I could engineer one of those kinds of businesses, then, yeah! That book has some detail. Not easy to do, but if you can manage, then it would be awesome.

 

[meekie]

I think this is actually a really good point. Our savings are at the point that with a 5% return would be about the same amount that we can put in savings this year. Looking forward, the compound interest should be a lot bigger than the amount I can contribute each year. Being young, it's more important that we leave that money alone than it is to keep contributing.
I'm currently in a pretty high paying job for my experience, but I realized this year that if I got laid off and could only replace my take home pay, and reduced our contributions, it wouldn't affect my retirement date by very much.

I wouldn't quite call it FI, but it does feel nice to have our retirement accounts in such a good position.

 

[Nords]

Some do ...

If I had a nickel for every time that cartoon's been posted on this website then I'd be retir-- um, never mind.

Great discussion here...never would have happened if the had given the article an honest (non-misleading) title. It was the same old story about the affordability of retirement, with 2% content about spending on travel and other retirement kinds of things. And as mentioned earlier, no detail as to how you'd manage, given you'd be at work instead of 3 weeks in Tahiti. Anyone read the 4 hour work week? If I could engineer one of those kinds of businesses, then, yeah! That book has some detail. Not easy to do, but if you can manage, then it would be awesome.

Sure, Ferris makes it sound pretty good in the book, but Mr. Money Mustache had a few interesting perspectives on that lifestyle:
Get Rich With: Good Old-Fashioned Hard Work | Mr. Money Mustache

 

[Alan]

One of the problems is that you can focus to much on the savings side and not enjoy life today... and that can make you grumpy even if you are not working... enjoy life more today and maybe work does not suck as much...

I am actually looking at doing this a bit more... and in a few years I will probably move to part time to even delay it more...

As a couple we did something approaching the article, and what you suggest.

I wanted to wait until 55 to get the pension and retiree health insurance, but 6 years before that we really didn't need to be saving at the rate we were. DW had 4 weeks vacation allowance at her company, and I had 6 weeks. A job opportunity within the same megacorp came up but in a different State and working for a UK Director that I knew and was good friends with, so I took it, and DW quit her job dropping our combined income by about 30%. (all of her salary had been going into savings plus some of mine).

Apart from 6 weeks of vacation that we could both take, I had lots of business trips to Europe and DW was now able to come with me, and did so on several of them, mostly to the UK, Spain and Belgium. On 2 occaisions she spent 6 weeks over in the UK, traveling around as well as visiting family.

DW also took on all the household chores, plus the change of job in a different field and completely different location was a very welcome change for both of us.

 

[Midpack]

It's important to save for tomorrow but it's also important to enjoy today because we know we have today and we may not have the tomorrows we save for.

If anyone ever answered that one definitely, life would certainly be easier. We all struggle with balancing today & tomorrow, and answer imperfectly...best we can do.

 

[Live And Learn]

I think the approach in the article is perfect for someone like me. Too scared to actually retire but probably has enough in savings to do so. I'm thinking if I do decide to wait a couple of more years that I will actually TRAVEL during my vacation time (I am the Queen of Staycations ! always have been). I have three or four big trips on my bucket list. Right now I have the funds for them excluded from all my portfolio / retirement calculators. If I w*rk two more years to pay for (and take) those vacations during that period that would allow me to add the 40k I have set aside to my retirement porfolio and boost those success ratios up a notch or two. It sort of IS having your cake and eating it too !

I just need to figure out of I can deal with stress and the BS another two years .... close game !

 

[rescueme]

If I had a nickel for every time that cartoon's been posted on this website then I'd be retir-- um, never mind.

Some thoughts need to be reinforced ...

Anyway, it seem to be an answer (without words) to a comment made. It's kind of amazing that it becomes "the answer" to a lot of discussions/comments, here. Sometimes, a picture is worth a thousand words...

 

[Grainiac]

In the Navy this is referred to as the "ROADS" scholarship program: "Retired on Active Duty Service", or "might as well be retired for all the work that we get out of them".

I'm familiar with the phenomenon from my current and previous megacorps. I used to work with a guy in his mid 60's who was repeatedly being asked about his retirement plans. His standard response was: "I retired 20 years ago but just didn't tell anyone". Funniest thing is, I think that to a great degree it was true, as he was working from a home office, and as far as I could tell most days he put in just couple of hours of real work.

 

[Chuckanut]

I would not call what the article described as retirement, but I can see that it would work well for some people. If I had a couple of kids to finish putting through college and a mortgage to pay off, I might work longer to do so, but also, reward myself by spending some of the former retirement savings money on those things I really want to do but have not yet done. Compromise and balance often make sense.

 

[Nords]

Funniest thing is, I think that to a great degree it was true, as he was working from a home office, and as far as I could tell most days he put in just couple of hours of real work.

He was probably more productive in those couple hours than an entire week of the extreme programmers working around a shared cubicle while attending department meetings and mandatory training seminars...

 

[sengsational]

Sure, Ferris makes it sound pretty good in the book, but Mr. Money Mustache had a few interesting perspectives on that lifestyle:
Get Rich With: Good Old-Fashioned Hard Work | Mr. Money Mustache

Loved that link...thanks!

And here’s the best part: the insane work will bring you just as much happiness as the leisure time!

I agree with that too. My best vacations are where we overhaul the boat's engine rather than just take a boat ride. It's harder to see when you're working for megacorp, but even then, it can be seen that what you're doing is leading to something else.

--Dale--

 

[audreyh1]

My best vacations are where we overhaul the boat's engine rather than just take a boat ride. It's harder to see when you're working for megacorp, but even then, it can be seen that what you're doing is leading to something else.

--Dale--

Projects are a LOT more fun when you do them on your timetable and only you or your family are the ones who get to decide what should be done!

There is no rule that says you're not allowed to work (oops!) on projects just because someone else is not paying you!

Audrey

 

[ERhoosier]

Agree orig article's title is misleading, but still gives food for thought. Like Ziggy mentioned, attitude towards job is much different when you feel you reached FI before RE. You could take a step back from the "pressure" of loosing job's income so you might be able to focus more on aspects of the job that you enjoy.....Or maybe not if you just plain hate the job. Also agree that shifting $$ from "mandatory" retirement savings to nice vacations (or other luxuries) can sure make life generally a bit nicer waiting for that eventual retirement date.
Interesting to me that article author did not touch on those who are SOOOO connected to their jobs that they fear loss of self-identity at some level if they retire. Or those lucky few who truly enjoy their jobs.

 

[obgyn65]

Thank you for sharing, Andre1969. I never used Firecalc to perform simulation analyses like the ones you did. I need to have another look at the tool.

For example, in my case, running the Firecalc numbers, I have a 90.4% chance of being able to retire in 2016 if I invest $20,000 per year until then. If I push it to 2017, I have a 98.8% chance.

But, if I cut back my investing to $10,000 per year, I have a 91.6% chance of success if I retire in 2017, and a 98.8% chance if I do it in 2018. (but only an 85.5% chance of success if I retire in 2016).

So, in this case, I'd have $10,000 more per year to play with and have fun with, at the expense of having to work one more year. If I quit saving altogether and used that $20K per year for fun money, I'd have an 89.2% chance of success retiring in 2018 and a 97.6% chance if I retire in 2019. So in this case, I'd have to work two more years.

 

[Jay_Gatsby]

Now in my case, I think the time is more valuable than the money, but others may not see it that way.

Time is more valuable than money once you reach a certain point in your savings - primarily when you reach FI. Even if you haven't reached FI, a desire to watch (help) your kids grow up, write the next Great American Novel, travel, etc... may still override your desire to earn the maximum amount that you can at the expense of such pursuits. Put differently, the pursuit of money becomes less important the more you have of it, simply because you have enough to fund your current lifestyle.

 

[Gone4Good]

So the plan they suggest is to stay working - that alone makes me think it is not retirement - then spend all the money you used to be saving towards retirement, so you get used to a higher expense lifestyle before you actually retire. If your savings weren't enough to support retirement before, what makes anyone think they will grow so fast if not added to, that they will support a more expensive retirement later.

That was my thought too. But the numbers they suggest (assuming we agree with their calculations - not provided) is that the couple gets to increase current expenditures $15K and in six years can retire with $16K more in combined SS and withdrawals. It's an option, I guess.

 

[chemist]

It is an interesting article. I am already retired but if working and considering a "retire while still working" scenario I would continue to max out the 401(k) and start spending down my taxable savings. In other words, instead of saving $17K + $5K into the 401(k) and maybe another $8K into taxable for a total $30K a year in retirement savings, to "roll it back" by $15K as the author suggests I would still put the $22K into the 401(k), suspend taxable savings and spend $7K from taxable savings.

That would give you the required extra $15K to have a ball with while continuing to take advantage of pretax savings while in a high tax bracket.

 

[Live And Learn]

Bottom line is that the article is saying you can work beyond FI and spend all the extra. I think we all know that.

 

[Finance Dave]

I agree in theory with what they are saying. Once you amass a small fortune, most of the increases in balance come from two of the three things below, and not so much from the third one...I'll let you guess which it is.

1) Growth on your small fortune
2) Not withdrawing money
3) Continued contributions

In our portfolio, we get more in growth now each year than our entire salaries. This is not because our income is low...but rather because our balance is very high due to many years of saving.

But as others have rightfully stated...I would not call it retirement if you don't have the freedom.

 

[RetireBy90]

Many good points in the postings here, my idea of retirement isn't doing what I'm doing now till 70!!!

But then again, is this article really for folks that have planned? Isn't the base that they haven't planned? There are lots like this out there I suspect, and this may be good news for them.

I did find this interesting:

The longer you delay retirement-plan withdrawals, the less you need to save. You might need $1 million to retire comfortably at age 62 if you wanted to replace 75% of a $75,000 annual salary. Wait until age 67, and you would need $675,000. Wait until age 70, and your required nest egg would be $525,000

Not sure where the numbers come from, but I wouldn't have suspected such a drastic difference.

Makes me happy once again I don't have to follow Suze Orman and work till I'm 70 or whatever she is saying now

 

[okapi]

After reading some of these post,I will now work 10 years after I die.Probably as a paperboy.