Is ER more about economics or about getting past social norms and personal fears

[BearlyWorking]

When I first started RE, I thought that if I just had X amount of assets then I was there. All I had to do was figure out what X was and how to get it. As time went on, I have become aware that much of RE may be more about psychology than economics. Two recent stories brought this home to me.

My friend Fred is being laid off from his job. His is 43. He has no financial worries because of careful investing and a SO that has high income. Still, he is having lots of problems. He is feeling like a failure for being laid off and guilty for not immediately wanting to jump back into a career track position. Although he does not want or need to work, I think he will be soon be back in a career track job.

Another friend, John, is a highly paid researcher. He is 48 and my ideal of the perfect saver. His family has always been on a strict budget and they have no debt. He saves a high percent of his income, and is a sensible and knowledgeable investor. His assets well cover his retirement lifestyle needs. He is also unhappy with his job that he spends 60-80 hours a week working at. He would like to get off his treadmill, but thinks that he needs to continue to work to 65 ‘to get a decent pension’.

These different views got me thinking about my RE plans. Am I over-accumulating assets in order to get past social norms and personal fears? Do most people over-accumulate to get past the psychological issues?

Thoughts? Experiences?

Mike

 

[greenhm]

Re: Is ER more about economics or about getting past social norms and personal f

I am over-accumulating!

I do not know, what I do not know, so I am preparing for the unknown.

However...

I am not trading 20 years of work for this preparation, only a year (7 mths to go)


I think everyone has thier comfort zone. Each of us knows (or will know) what that is. Sometimes it is a moving target. For some, it's when society tells us that you have enough (age 65), other times, not.

 

[Mr._johngalt]

When I first started RE, I thought that if I just had X amount of assets then I was there.  All I had to do was figure out what X was and how to get it.  As time went on, I have become aware that much of RE may be more about psychology than economics.  Two recent stories brought this home to me.

My friend Fred is being laid off from his job.  His is 43.  He has no financial worries because of careful investing and a SO that has high income.  Still, he is having lots of problems. He is feeling like a failure for being laid off and guilty for not immediately wanting to jump back into a career track position. Although he does not want or need to work, I think he will be soon be back in a career track job.

Another friend, John, is a highly paid researcher.  He is 48 and my ideal of the perfect saver.  His family has always been on a strict budget and they have no debt. He saves a high percent of his income, and is a sensible and knowledgeable investor.  His assets well cover his retirement lifestyle needs.  He is also unhappy with his job that he spends 60-80 hours a week working at. He would like to get off his treadmill, but thinks that he needs to continue to work to 65 ‘to get a decent pension’.

These different views got me thinking about my RE plans.  Am I over-accumulating assets in order to get past social norms and personal fears? Do most people over-accumulate to get past the psychological issues?

Thoughts?  Experiences?

Mike

Your "friends" need professional help.

JG

 

[grumpy]

Re: Is ER more about economics or about getting past social norms and personal f

I'm realizing that I over prepared. This week I entered all of our expenditures into Quicken. Before printing the expense report I deleted the categories that cover all of the one-time expenses associated with our new home (e.g. furniture, decorating, patio installation, etc.) and the financial support we had been providing to my daughter while she got some additional schooling. The result is that our average expenditures per month almost exactly equal our combined DB pensions (inflation indexed). Looks like the $1.5M net worth we amassed by LBYM is not really necessary to support the quite comfortable ER lifestyle we are living. I retired from the federal gov't as soon as I turned 55 with an immediate pension and my wife retired from her teaching job as soon as she was eligible for an immediate pension (age 57). Since we really couldn't have retired sooner I guess we could have spent a little more and saved a bit less leading up to that point. I am only now overcoming my personal fear of not having enough.

Grumpy

 

[WhodaThunkit]

Thrift is a wonderful virtue -- especially in an ancestor

 

[Mr._johngalt]

Thrift is a wonderful virtue -- especially in an ancestor

That is fine. Never heard it!

JG

 

[Eagle43]

It's about all three.  Economics/savings is the key, but you better be prepared for the other two.  People will regard you as a "n'er do well", if you are really young (I'm not).  The other problem is how to cope with an unstructured day, week, etc.  Each person resolves that differently, of course.  Hobbies, exercise, travel, reading, even posting on this or other forums are yours to be enjoyed.  Once you change your perspective, and it took me well over a year, everything is ok.  Today, whenever I have an early appointment, or a "must-do" I just resent it.  Eight hours of unliked and unnecessary corporate work, jumping to some idiot's person's instructions, might destroy me.  I can do it, of course, but I don't want to, and the good thing is, I don't have to.

 

[BearlyWorking]

Re: Is ER more about economics or about getting past social norms and personal f

I think I will also be a little over prepared (my DW does not think we are prepared enough), but it is due to the crazy real estate market in CA moving up faster than I can move my retirement date down!

Hardly ever see this issue discussed in retirement books. Most seem to preach gloom and doom.

Mike

 

[poyet]

Re: Is ER more about economics or about getting past social norms and personal f

My understanding, is that the issue you raise BearlyWorking has little to do with overaccumulation per se. Those two guys could have 10M$ more, one would still feel guilty for having been laid off and the other would still feel unsecure until the system would *ensure* that he would be paid a pension (he needs cash-flow coming in from big brother). They do not save to ER, they save to sleep better at night or whatever reason ?

In fact, they do not overaccumulate as this would suppose to have a target (X $) and to try to reach it. They simply cannot sort out other issues (e.g. psychological, social, societal) you have to deal with when you ER. They do not even consider ERment as a possibility !

I'm not blaming them as I went through both of the aforementionned problems and many others, until I felt as most ERees perfectly fine just doing what I want, when I want, with whom I like, etc... But it takes take to regain his/her own freedom after 25 years of slavery !

So definitely, it is not just a matter of money.

 

[poyet]

Re: Is ER more about economics or about getting past social norms and personal f

it takes time, I meant

 

[youbet]

Bearly Working:

Fred and John need to do what they need to do. And you need to do what you need to do. Don't try to apply your values to them. If Fred and John are doing life the way they want to do it, then they are doing it to perfection for themselves! That's all there is to it!

This is a great board, but remember that most of the posters are expressing a view that applies only to themselves. They'd like to think it's their way or no way. But you do it your way. Retire when you feel comfortable, not before and not after.

 

[Mr._johngalt]

  Today, whenever I have an early appointment, or a "must-do" I just resent it.  .

Man, did this hit home. This happened to me several times this week.
Earlier in the week I made early appointments to see the attorney helping with
my parent's financial planning. Each meeting only took 20 minutes. Then yesterday, I had a last minute errand I promised to handle for my mother.
That took about 30 minutes . I felt the "resentment" mentioned by Eagle,
not because I don't want to help my parents (these appointments could
have been anything). Nope, the reason is that I had be somewhere
at a certain time, thus I interrupted an otherwise unstructured day.
To look at it another way, if you get up in the morning and have absolutely
nothing you MUST do and no place you HAVE to be, then any little
chore which is SCHEDULED becomes an annoyance. I suspect that some folks
still tied to the clock/meetings/appointments/presentations will find this
hard to grasp.

JG

 

[Mr._johngalt]

Re: Is ER more about economics or about getting past social norms and personal f

Hardly ever see this issue discussed in retirement books.  Most seem to preach gloom and doom.

Mike

I sometimes come across as a "gloom amd doomer". Nothing could be
further from the truth. However, my optimism is based on my own
abilities and what I can do, not what others may be doing. My ex.
had trouble with the concept. I told her that I was a cynic, not a pessimist.
Big difference!

JG

 

[jug]

When I first started RE, I thought that if I just had X amount of assets then I was there.  All I had to do was figure out what X was and how to get it.  As time went on, I have become aware that much of RE may be more about psychology than economics.  Two recent stories brought this home to me.

This is an interesting post.  What I notice looking inside myself is that there is alot of psychology whizzing around in my head.  I know intellectually, that if I opt out now, I will have a paid up house, a 30 K pension, and another 20K coming in from investments safely, and SSI coming in another 9 years for wife and myself.    For me this is adequate.  I also know that I would want to keep busy with a part time job, so that is another 10-20K

If I opt out of my crazy job in 4 years, the pension is 20K fatter, but then I lose 4 years of my life.

Without adding the influence of emotion, I know I will live an average middle class life, not in riches and not in poverty for the next 20-30 years by opting out early.

The problem then becomes psychological.  I keep thinking Im screwing myself by not waiting the 4 years which most people do to get the 30 years in to collect full pension, and thus I am comparing myself to these people who I picture living high on the hog when Im scrimping.   This plays on my mind big time.

The fact is I have enough now and my wife and I dont care if we leave nothing to our son.  But in reality, he will probably get our house and whatever cash we have left in the bank when we pass.  If I wait for the bigger pension, he will get more money in the bank and perhaps I would have slept a bit better and the portfolio would grow larger for my son.

Comparing yourself to someone who is getting more is what plays on your mind. We never compare ourselves to those who have nada in savings, and nada for a pension. We never do this!!!! Plenty of people on this board have great assets and good pensions. I dont see anyone coming here saying I got 50 bucks in the bank, am 50 years old, can I retire?

The SHAME of a peer having more than you is playing on your/my mind. We are all comparing ourselves to others, and others are doing the same.

If you have enough to comfortably do what you need to do in ER, then the rest is overcoming the psychological barrier which is made up mostly of comparisions and fantasy.

I find that I see myself looking at my peers who will collect 50 K pensions, some with double pensions along with wife's pension, and I will be collecting a smaller pension.  Im making a comparison and driving myself crazy.

The important thing is to maintain physical and mental health during ER. Most of us have enough for food and housing.

Imagine having about 3 million bucks in the bank, and 100K pension but you  suffer from poor mental or physical health that you cannot enjoy it.  That must really feel horrible, having the means but not the health to enjoy it.

Now imagine yourself in that condition seeing a fellow with a crappy pension, barely making it, but he is out jogging, walking, swimming, running with the ladies and simply enjoying himself.  You know you would want to trade places with him.

So basically we beat ourselves up.  The first thing is to "know yourself" and then look at the objective reality of what is really going on.  Its eaier said than done, but this ER thing is as much about the demons running around inside your head, beating you up, as it is the financial aspect.  When I see people saving like mad, worrying if they will have enough, but in reality they have way more than enough, then they are simply harming and fooling themselves.

You have to look at things calmly and objectively. The financial services industry loves to scare the sh-t out of us, its there job, it keeps us coming to them so they can collect their commissions. They are actually part of our psychological problem, they feed it!!!!!

My dearly departed mother in law said something very wise, "spend a little and save a little" and that is exactly what we did, we did not scrimp on vacation, been all over the place, and did not scrimp on life in general.  We've been to so many places that now when ER is about to begin, I have no real yen to travel much oversees, just do things more local. Been there done that.

The brain is control central, with all the money and security in the world, if the brain is not doing well, then the money will not make you feel secure, it will never feel like you have enough and the only good sleep you'll get is when you are dead. live now, its later than you think. I should take my own advise. lol
jug

 

[kz]

For us ER was a little of both. Economics played a part as well as personal fears. I don't believe social norms played any part in our planning.

Our pensions are more than adequate to cover our living expenses as well as some luxuries. Any "overaccumulation" we did was a safety net which helped us sleep better at night.

I was overly concerned about our "retirement spending plan" while hubby's main goal was to retire at 53. (he would have gone sooner but we were still paying college bills) Even when I tried to show him, financially, how staying just 2 more yrs would make a huge difference in our safety net he didn't care. He stated he could live on whatever our budget was...he just wanted to retire.

How things have changed. I realized that we would be just fine as long as we didn't get too carried away on must-haves. Hubby, OTOH, who has always been the shopper/spender in the family took a part-time job for some "extras". He recently found out that he is being downsized in 2 wks and it's really bothering him. I'm excited about it since we'll have more time for some travel and recreation that we didn't have with him working 3 days a week. He finally admitted that he just likes having something to do/somewhere to be. This from the man who, for 2-3 yrs, couldn't wait to have his days to himself!

I've decided to just go with the flow. He wants some type of part-time work...so be it. He'll be happier which is all I wanted for him upon retirement. Matter of fact I just told him about a condensed 5 week welding course that he is going to sign up for on Monday. He's happier already. Maybe it will lead to a new job that he would absolutely love.

 

[Lazarus]

Re: Is ER more about economics or about getting past social norms and personal f

For us ER was a little of both. Economics played a part as well as personal fears. I don't believe social norms played any part in our planning.

Our pensions are more than adequate to cover our living expenses as well as some luxuries. Any "overaccumulation" we did was a safety net which helped us sleep better at night.

I was overly concerned about our "retirement spending plan" while hubby's main goal was to retire at 53. (he would have gone sooner but we were still paying college bills) Even when I tried to show him, financially, how staying just 2 more yrs would make a huge difference in our safety net he didn't care. He stated he could live on whatever our budget was...he just wanted to retire.

How things have changed. I realized that we would be just fine as long as we didn't get too carried away on must-haves. Hubby, OTOH, who has always been the shopper/spender in the family took a part-time job for some "extras". He recently found out that he is being downsized in 2 wks and it's really bothering him. I'm excited about it since we'll have more time for some travel and recreation that we didn't have with him working 3 days a week. He finally admitted that he just likes having something to do/somewhere to be. This from the man who, for 2-3 yrs, couldn't wait to have his days to himself!

I've decided to just go with the flow. He wants some type of part-time work...so be it. He'll be happier which is all I wanted for him upon retirement. Matter of fact I just told him about a condensed 5 week welding course that he is going to sign up for on Monday. He's happier already. Maybe it will lead to a new job that he would absolutely love.

I took a welding course for adults and just loved it. Bought a 120V Miller Mig welder for the shop had a lot of fun just hacking around with it.

Started flying again also. I get more funny looks about the welding than I do the flying!

 

[haha]

I've decided to just go with the flow. He wants some type of part-time work...so be it. He'll be happier which is all I wanted for him upon retirement. Matter of fact I just told him about a condensed 5 week welding course that he is going to sign up for on Monday. He's happier already. Maybe it will lead to a new job that he would absolutely love.

KZ, tell your husband that Ha says he is one lucky guy to be married to you!

Ha

 

[HFWR]

I vote economics!!

Since I work a depressed compressed shift, I have 3 or 4 days off each week, and I can tell you without hesitation that I DO NOT miss that hellhole work one damn bit!!

Just haven't figured out how to live on $12k yet...

 

[kz]

Thanks, Ha. We've been married for 31 yrs so we must be doing something right.

Lazarus--We already have the welder so he might as well learn how to use the darn thing. <grin>

 

[BearlyWorking]

Re: Is ER more about economics or about getting past social norms and personal f

This discussion helps me alot. I am not going to obsess over assets, budgets and other stuff any more or delay RE to get more assets. Instead I'll just suck it up and push through the fears. There will be bumps in the road, especially the first year, but DW and I will get through them.

I do feel bad for people that honestly would like to ER, but cannot get through the psychological stuff.

Mike

 

[MJ]

Re: Is ER more about economics or about getting past social norms and personal f

Just haven't figured out how to live on $12k yet...

I bet Freddie the Freeloader has no probelm living on $12k, I meant $8k, no no I meant $4k, that's not right, must be $25. That's it.

But back to the real world, Lance does it on $13k living in Bangkok.

MJ

 

[Retire Soon]

I had a professor once who had everyone in our graduate class make out a list of their most important goals in life. After we worked on this task for about 10 minutes, he asked the students to pretend that they have only 5 years left to live. What goals on our list would we accomplish first?  His point was that if there is something we want to do in life, do it now, because  we may not be around to do it otherwise. We have absolutely no way to foresee how much time we have left.

Recently, my wife and I visited her father's grave site at Fort Rosecrans Military Cemetery in San Diego. It was a perfect day, with clear skies, lush green grass and the sun shining brightly on the blue waters of the  Pacific Ocean.  While looking at the mausoleum wall where my father-in-law was, my eyes were drawn to a name that was several columns across.  It turned out to be the man who had been my master teacher twenty years ago when I was a student teacher in his classroom at a school in a rough neighborhood of San Diego. He had died only a month before then, at the young age of 60. I had not seen him for several years, but it made me wonder if perhaps he had spent his final years agonizing in a difficult Southeast San Diego minority school, just so he could max out his pension.

This experience helped reinforce my desire to retire at 55 without a full pension, but knowing that my wife and I will spend our final years living comfortably, but not extravagantly doing what we really want to do with a limited number of years left.

Retire Soon

 

[Mr._johngalt]

I had a professor once who had everyone in our graduate class make out a list of their most important goals in life. After, we worked on this task for about 10 minutes, he asked the students to pretend that they have only 5 years left to live. What goals on our list would we accomplish first?  His point was that if there is something we want to do in life, do it now, because  we may not be around to do it otherwise. We have absolutely no way to foresee how much time we have left.

Recently, my wife and I visited her father's grave  at Fort Rosecrans Military Cemetery in San Diego. It was a perfect day, with clear skies, lush green grass and the sun shining brightly on the blue waters of the  Pacific Ocean.  While looking at the mausoleum wall where my father-in-law was, my eyes were drawn to a name that was several columns across.  It turned out to be the man who had been my master teacher twenty years ago when I was a student teacher in his classroom at a school in a poor neighborhood of San Diego. He had died only a month before then, at the young age of 60. I had not seen him for several years, but it made me wonder if he had spent his final years agonizing in a difficult Southeast San Diego minority school, just so he could max out his pension.

This experience helped reinforce my desire to retire at 55 without a full pension, but knowing that my wife and I will spend our final years living comfortably, but not extravagantly doing what we really want to do with a limited number of years left.

Retire Soon

This was the number one driving force that caused me to walk away
in 1993. Truly, I do not understand hanging onto a job just to
fatten your pension. Look at it this way. I retired with a tiny net worth.
Fast forward 12 years.............
I wish I had quit even sooner.
I could have too,
with 20/20 hindsight.

JG

 

[dex]

Re: Is ER more about economics or about getting past social norms and personal f

Retire Soon,
Thanks for the post; very appropriate for this board.

 

[Ed_The_Gypsy]

Re: Is ER more about economics or about getting past social norms and personal f

Just haven't figured out how to live on $12k yet...

Me too..

Ed