The Joys of Semi-Retirement Thread

[Markola]

I’ve long felt that the Forum could use a thread for those of us who enjoy earning some income after leaving the full-time workforce, and for anyone curious about threading the needle this way. I respect that others choose full retirement.

This summer I celebrate both my 59.5 birthday, also 5 years of being semi-fired. I will use the occasion to offer observations about this middle path, and I hope others will share their experiences, wisdom and questions:

Why
We just grew tired of what we’d been doing for decades. DW encountered an incompetent boss and bailed. My habitual rung-climbing interest petered out, yet lateral moves also became unappealing. I’d been there, done that, and had a variety of different organizations’ t-shirts to show for it, and I wasn’t motivated to acquire another one.

How
We always saved and invested aggressively in our 403bs and minimized debt, except for a 3.6% mortgage. Unfortunately, we never had kids, but that enhanced our ability to save.

I got super-focused around age 45 on the FIRE Movement, and even went to Ecuador for the second Chautauqua hosted by author JL Collins. I hung out with Mr. Money Mustache and other luminaries in that movement. The portfolio eventually grew enough that, when COVID hit and the work world grew stressful, I said bye-bye using the Rule of 55. DW had already departed 2 years earlier using the Rule of 55.

She is an extrovert and found work conducting public opinion interviews by phone and in-person. She loves the work. I stumbled into some very part time consulting opportunities and formed an LLC. Together, we earn about 30% of our income. We both work from home, which has allowed us to snowbird enjoyably every winter in Georgia or California.

Hiccups
We worked with a Vanguard advisor, who had us in a 50/50 portfolio when the 2022 bonds face-plant happened. I was too ignorant about bonds to see that coming, and our advisor said nary a peep to protect us. I bought the fiction that bonds were ballast. They have been more of a boat anchor since I bought our first bond index fund in the tumultuous 2009, which was also a dumb move in hindsight. I don’t want to even think about how much we’d have now if I’d avoided bonds. I was alarmed enough during the bond crash that I took a full-time consulting gig for a year in 2023/24 until things recovered. I also ditched the advisor.

I didn’t count on needing to assist my 85 year old mother financially, who was even more heavily in bonds. I’m gratified to be able to do it, of course.

Finances
I’m pleased that five years in, nominally, our portfolio is 5% higher. That’s mostly thanks to some alternative investments, which I finally had time to study after I quit my j*b. And we continue to find little ways to earn extra income, which gives our days structure and purpose. That’s easier than generating our own structure and purpose, honestly. DW probably works 25 hours/week while I probably work 8-10 on average.

Life
Semi-retirement for us is a wonderful lifestyle and I see no reason to change it anytime soon. Life continues to be life, however, and problems can and do happen, as they always do, regardless of w*rk. But I wouldn’t trade the flexibility and ownership of my precious remaining time, such as relaxing right now on my shady, screened porch on a perfect summer Wednesday afternoon, writing this, while the rest of the world is laboring to increase my asset prices and dividend income.

If this is an interesting topic to others, I’d love to compare notes!

 

[aja8888]

Nice story and glad to hear it's working out. I suspect that not having children made this effort to semi-retirement success much easier.

 

[Diogenes]

Hiccups
We worked with a Vanguard advisor, who had us in a 50/50 portfolio when the 2022 bonds face-plant happened. I was too ignorant about bonds to see that coming, and our advisor said nary a peep to protect us. I bought the fiction that bonds were ballast. They have been more of a boat anchor since I bought our first bond index fund in the tumultuous 2009, which was also a dumb move in hindsight. I don’t want to even think about how much we’d have now if I’d avoided bonds. I was alarmed enough during the bond crash that I took a full-time consulting gig for a year in 2023/24 until things recovered. I also ditched the advisor.

Same here, regarding clumsy and blithely inept advice from Vanguard about bonds. Though I didn't have a formal advisor, at the time Vanguard was generous to their more "senior" members with essentially unlimited access to their economists and analysts. I got on a call with somebody from Vanguard who later (it turns out) became a VP of something-or-other. Very nice lady, well-spoken, armed with charts and historical data. She wasn't hawking anything per se, but recommended a heavy allocation to intermediate tax-exempt bonds, as a means of reducing both volatility and taxes, while avoiding the dead-money of short term bonds or money market accounts (that was a couple of years after your incident). It turned out to be a disaster... both high volatility and low cumulative gains... I would have been better off, never touching bonds!

As for the general idea of part-time work, I'm a few years younger than you, and would have preferred to have stayed full-time until age X, then retiring completely and moving to a lower-tax area. Instead I got fired from my own start-up company and felt too jarred with sense of unfinished business, to call my career complete, right then and there. The temporary remedy was to become an adjunct professor... deeply satisfying professionally, but a tawdry joke in terms of compensation. It's my "Barista FIRE" job. What comes next? I don't know.

 

[Lorenzo]

Great thread topic. Thanks. A question I often ponder is what does it even mean to be "semi-retired"? Does it mean that one is FI--they do not HAVE to work if they don't feel like it? Or can one be semi-retired just by virtue of cutting down the amount one works, even if they still need the income to maintain some "lifestyle"? Does it mean you're working in your old familiar field? Or does a classic "retirement gig" like the cliche of working as a barista qualify as semi-retirement? Does the number of hours worked make a difference in whether you're semi-retired? I doubt there is an accepted definition, and there may be a variety of kinds of semi-retirement.

My work has long been compensated on a basis other than straight salary, so my income has been up and down over the years with the amount of work I have taken on. I have used the time-versus-compensation tradeoff to do a lot of international travel. At times, I felt the bank account was padded enough to take a few months off, even a year once (quit that job and gave myself a "sabbatical"). When I felt flush, I'd sometimes tell curious people I met that I was semi-retired, and if I felt finances were not as great as I'd like them to be I'd tell people I was "under-employed." Though I always made a habit of saving what I thought was the recommended percentage of my income in 401ks and IRAs, I didn't give a lot of thought to retirement or how much I'd need to have saved. Not knowing any better, I kept a lot in cash accounts.

I'm kind of glad I hadn't heard of the FIRE movement until just a few years ago--I probably only ran across an article about FIRE when I started reading more widely during Covid idleness--because I may have gotten the idea I was doing it all wrong. What if instead of aiming for a work-life balance for most of my working career I had instead worked my a** off for 25 years or so, saving a big chunk of it, and then FIRED, like many folks on this forum? I'll never know. Hindsight, right?

From there it wasn't a huge leap to think not of "retirement" in the classic sense but of just working less and less until ... I dunno ... maybe my employer and colleagues begin to wonder whether Lorenzo is still around. I started ratcheting down my workload years ago--I'm not exactly sure how many because it has been so gradual, but I know it was pre-Covid. I guess I could look back at my tax returns to see when the income reduction got steeper. I do recall some pretty great years in the late '90s and early 2000s, but those are long behind me. If I had only sustained that kind of income for even just 20 years! But it would have burned me out, as it did others.

I hadn't seriously thought of myself as "semi-retired" until recently. I have been dipping into my savings from time to time for many years, such as when I took an extended period off from working. At first, it was just a little here and a little there. But that has gradually increased. The epiphany came just a couple of years ago when I realized that, going forward, if I want to keep up a more or less similar lifestyle I will need to withdraw more from savings than I am taking in from working. (That sounds like a reasonable definition of "semi-retired.") To put it another way, the downwardly sloping income from work line and the upwardly sloping withdrawals from savings line are about to cross. This is where I am now. The lines have not actually crossed because I have been cutting back on the travel and putting off some major purchases like replacing our ageing vehicles. My wife, who is younger than me, still works full time, and that provides a cushion. Lately, I have been working a bit more, maybe something like 20 hours a week. But I plan to ratchet that back down soon enough. I am in the process of figuring out a long-term plan for how to make this work. It's why I joined the forum.

 

[CO-guy]

Sounds like you're living FIRE on your own terms. I describe my own path as a FIRE glide path while I wait for my better-half to wind down her career (and reach pension eligibility). I quit the full-time several years ago, and have been slowly whittling down how much time I spend consulting.

For a while I burned the candle at both ends with a full-time position and 40+ hours a week consulting. The upside was that we hit our FI number a few years earlier than expected. There's no pressure on either of us to earn any income anymore, but she has career goals and my consulting hasn't gotten in the way of any fun. Hoping to limit my consulting to below 20h/wk this year, and less the year after.

 

[Markola]

^^^. I like the “glide path” concept. IMHO, the definition of what this period is called is up to each person. I think we all know whether we’ve downshifted or not in some noticeable way. I’ve seen other posts here wrap themselves around the axle about whether someone is retired or not, e.g. “Well, your wife still works and provides medical insurance, so you’re not really retired.” . There are infinite ways to do this middle path.

 

[Markola]

One funny thing is, for years I kept a long, detailed list on my phone of all the things I was going to do when I quit my job, both compensated and not. Well, I did quit - and I never looked at that list even once. . It became an added source of pressure on my new free time, even though I wrote it! I have to admit that in hindsight, it was a crutch and coping mechanism through some hard times at the end. There is some psychology to this, I reckon.

 

[Markola]

Same here, regarding clumsy and blithely inept advice from Vanguard about bonds. Though I didn't have a formal advisor, at the time Vanguard was generous to their more "senior" members with essentially unlimited access to their economists and analysts. I got on a call with somebody from Vanguard who later (it turns out) became a VP of something-or-other. Very nice lady, well-spoken, armed with charts and historical data. She wasn't hawking anything per se, but recommended a heavy allocation to intermediate tax-exempt bonds, as a means of reducing both volatility and taxes, while avoiding the dead-money of short term bonds or money market accounts (that was a couple of years after your incident). It turned out to be a disaster... both high volatility and low cumulative gains... I would have been better off, never touching bonds!

As for the general idea of part-time work, I'm a few years younger than you, and would have preferred to have stayed full-time until age X, then retiring completely and moving to a lower-tax area. Instead I got fired from my own start-up company and felt too jarred with sense of unfinished business, to call my career complete, right then and there. The temporary remedy was to become an adjunct professor... deeply satisfying professionally, but a tawdry joke in terms of compensation. It's my "Barista FIRE" job. What comes next? I don't know.

Great story. What a gift that younger you gave future you options!

 

[Markola]

Great thread topic. Thanks. A question I often ponder is what does it even mean to be "semi-retired"? Does it mean that one is FI--they do not HAVE to work if they don't feel like it? Or can one be semi-retired just by virtue of cutting down the amount one works, even if they still need the income to maintain some "lifestyle"? Does it mean you're working in your old familiar field? Or does a classic "retirement gig" like the cliche of working as a barista qualify as semi-retirement? Does the number of hours worked make a difference in whether you're semi-retired? I doubt there is an accepted definition, and there may be a variety of kinds of semi-retirement.

My work has long been compensated on a basis other than straight salary, so my income has been up and down over the years with the amount of work I have taken on. I have used the time-versus-compensation tradeoff to do a lot of international travel. At times, I felt the bank account was padded enough to take a few months off, even a year once (quit that job and gave myself a "sabbatical"). When I felt flush, I'd sometimes tell curious people I met that I was semi-retired, and if I felt finances were not as great as I'd like them to be I'd tell people I was "under-employed." Though I always made a habit of saving what I thought was the recommended percentage of my income in 401ks and IRAs, I didn't give a lot of thought to retirement or how much I'd need to have saved. Not knowing any better, I kept a lot in cash accounts.

I'm kind of glad I hadn't heard of the FIRE movement until just a few years ago--I probably only ran across an article about FIRE when I started reading more widely during Covid idleness--because I may have gotten the idea I was doing it all wrong. What if instead of aiming for a work-life balance for most of my working career I had instead worked my a** off for 25 years or so, saving a big chunk of it, and then FIRED, like many folks on this forum? I'll never know. Hindsight, right?

From there it wasn't a huge leap to think not of "retirement" in the classic sense but of just working less and less until ... I dunno ... maybe my employer and colleagues begin to wonder whether Lorenzo is still around. I started ratcheting down my workload years ago--I'm not exactly sure how many because it has been so gradual, but I know it was pre-Covid. I guess I could look back at my tax returns to see when the income reduction got steeper. I do recall some pretty great years in the late '90s and early 2000s, but those are long behind me. If I had only sustained that kind of income for even just 20 years! But it would have burned me out, as it did others.

I hadn't seriously thought of myself as "semi-retired" until recently. I have been dipping into my savings from time to time for many years, such as when I took an extended period off from working. At first, it was just a little here and a little there. But that has gradually increased. The epiphany came just a couple of years ago when I realized that, going forward, if I want to keep up a more or less similar lifestyle I will need to withdraw more from savings than I am taking in from working. (That sounds like a reasonable definition of "semi-retired.") To put it another way, the downwardly sloping income from work line and the upwardly sloping withdrawals from savings line are about to cross. This is where I am now. The lines have not actually crossed because I have been cutting back on the travel and putting off some major purchases like replacing our ageing vehicles. My wife, who is younger than me, still works full time, and that provides a cushion. Lately, I have been working a bit more, maybe something like 20 hours a week. But I plan to ratchet that back down soon enough. I am in the process of figuring out a long-term plan for how to make this work. It's why I joined the forum.

Time off becomes seductive. I still struggle with it and part of my consulting in my field is to keep my options open and network alive, just in case the SHTF and I need to get j*b. My psychological trick is to put that decision off for 6 months. Then another 6 months…

 

[Diogenes]

Time off becomes seductive. I still struggle with it and part of my consulting in my field is to keep my options open and network alive, just in case the SHTF and I need to get j*b. My psychological trick is to put that decision off for 6 months. Then another 6 months…

After a while, one becomes unable (or at least deeply unwilling) to comport with a standard 9-5 schedule. WFH people might be able to circumvent this, despite working full time. But a "barista" or consulting-style job results in, among other things, a distaste for setting the alarm clock, designating an official time for when to walk-in to the office, abiding there for the canonical 8 or 9 hours, then going home. Instead, work and non-work tend to meld and intermix. Sometimes I write my lectures at 3 in the morning, or on weekends, or whenever. The only fixed-time for doing "work" is during lecture-time itself, or when holding office-hours with the students. Other times, I'm here or there, doing this or that or nothing at all. The potential prospect of returning to full-time, feels galling, and is less appealing with - as you put it - every succeeding 6 months.

 

[CO-guy]

Time off becomes seductive. I still struggle with it and part of my consulting in my field is to keep my options open and network alive, just in case the SHTF and I need to get j*b. My psychological trick is to put that decision off for 6 months. Then another 6 months…

Maintaining those professional connections is the part I struggle with the most. I have such little motivation to do it, but that's always been the case.

This past month traveling in Italy was a bit of a test run of sorts for my consulting. Most of what I do is asynchronous, with one or two meetings total in a week. Since most clients are in EST, I've become used to 7am meetings in Colorado. In Italy, those meetings were at 5pm, which was perfect timing to wrap things up before meeting folks out for aperitivi!

 

[Koolau]

I managed to mess up my finances all by myself - no help from Vanguard advisor. Still, since I was a good saver, we had plenty. I've learned a lot the hard way and here, so I'm in good shape (for the next 21 years - to age 99 - after that)

 

[Markola]

Koolau, Did you ever earn any side income during retirement or were you a hard-stop type? What did you do in your career, anyway? Make custom surfboards?

 

[disneysteve]

A question I often ponder is what does it even mean to be "semi-retired"? Does it mean that one is FI--they do not HAVE to work if they don't feel like it? Or can one be semi-retired just by virtue of cutting down the amount one works, even if they still need the income to maintain some "lifestyle"? Does it mean you're working in your old familiar field? Or does a classic "retirement gig" like the cliche of working as a barista qualify as semi-retirement? Does the number of hours worked make a difference in whether you're semi-retired? I doubt there is an accepted definition, and there may be a variety of kinds of semi-retirement.

I can share my story for what it's worth.

From 1993 through 2015 I was a full time (and then some) family practice physician. In April 2016 I took a per diem position with an urgent care clinic. I remained full time at my practice but picked up one or two 4-hour shifts at urgent care each week. In February 2017, I reduced my practice hours to 20 hrs/wk and went part time with UC at 24 hours/wk. At the end of September 2017, I left my practice for good and went full time UC at 36 hrs/wk.

Fast forward to August 2021 when I dropped back to PT at UC (24 hrs). Then in August 2022 I dropped back to per diem meaning I had no set schedule. I could pick up shifts whenever I wanted to. The only requirement was that I work at least 24 hours every 90 days. What I actually did was generally two 4 hr shifts/wk. Working 8 hrs/wk I would say qualified as semi-retired, plus it was on my own schedule so if something came up or we wanted to go away, I just didn't take shifts for a week or two or three. In January 2024 I decided to cut back to one 4 hr shift/wk. I did that for a couple of months before deciding to hang it up for good. I gave my 120 days notice as required by my contract and officially retired June 8, 2024 (though my last day worked was May 26). For just under 3 years, I was what many would call semi-retired.

Now, I do not work in a professional capacity at all. I do have a reselling business on ebay and elsewhere which I've done for nearly 40 years now and plan to continue doing as long as I can. It's fun. It keeps us busy going out and about buying stuff to resell. I enjoy the socialization. It keeps me active mentally and physically. We absolutely do not need the money so I do it purely because I enjoy it.

Part of the reason I explored the shift from family practice to urgent care was with retirement in mind. Family practice was not suited to a "glide path" but UC was perfect for that purpose and I am very happy with the way I was able to gradually cut back until I was ready to walk away permanently.

 

[Lorenzo]

. . . Working 8 hrs/wk I would say qualified as semi-retired, plus it was on my own schedule so if something came up or we wanted to go away, I just didn't take shifts for a week or two or three. In January 2024 I decided to cut back to one 4 hr shift/wk. I did that for a couple of months before deciding to hang it up for good. I gave my 120 days notice as required by my contract and officially retired June 8, 2024 (though my last day worked was May 26). For just under 3 years, I was what many would call semi-retired.

Now, I do not work in a professional capacity at all. I do have a reselling business on ebay and elsewhere which I've done for nearly 40 years now and plan to continue doing as long as I can. It's fun. It keeps us busy going out and about buying stuff to resell. I enjoy the socialization. It keeps me active mentally and physically. We absolutely do not need the money so I do it purely because I enjoy it.

Do you think of yourself as semi-retired now that all you do is the ebay gig? Or do you think of "semi-retirement" as limited to still semi-working in the same field as was once your career?

 

[joesxm3]

I think I work harder at managing my investments than I did at the old job. So maybe I am semi-retired.

But most of the extra work is monitoring X and watching You Tube videos to keep up on news and trends. Some is spent doing archaic spreadsheet tracking or planning for future taxes.

I suppose I am retired and this is retired stuff, but last year my portfolio value increased more than 3 times my highest annual salary. I guess paying attention helps.

 

[Ronstar]

I liked working part time - at the time. Did it for several years, the last 2 years at 1.5 days a week. And remotely most of the time. Very few texts, emails and phone calls. I thought that it was the greatest thing back then.

Then came retirement. No emails, texts or phone calls. And working 0 hours a week is infinitely better than working 8-12. For me, retirement is light years better than being semi retired. There was always a chance of some work stress while working part time. No chance of work stress now.

 

[disneysteve]

Do you think of yourself as semi-retired now that all you do is the ebay gig? Or do you think of "semi-retirement" as limited to still semi-working in the same field as was once your career?

I consider myself fully retired now.

I don’t think semi retired only means your original career but I do think it means still having some type of formal job. I don’t. I’m retired.

 

[Markola]

I think I work harder at managing my investments than I did at the old job. So maybe I am semi-retired.

Probably, a lot of us are this way. I am one of the rare nerds in life, though not on this forum, who has enjoyed reading about personal finance since I was a teenager. I became transfixed by my realtor mother’s paper book of compound interest tables. It seemed like the key to the universe.

“You mean I can put some $X in something, which grows Y% per year and, BAM, I end up with more money by doing absolutely nothing more but waiting? Where do I sign up?!

Like you, my little hobby (obsession?) is the most lucrative thing I’ve ever engaged in, by far. I guess if we count studying investments for enjoyable profit as w*rk, a lot of people on this forum would be surprised to learn they are not retired!

 

[joesxm3]

I remember way back in the 1980's asking a guy at chess club what he did for work. His reply "I manage investments - mine."

 

[Lorenzo]

I know a couple of people who have long made their living entirely by managing their rental properties and haven't worked a "formal job" (whatever that means) in decades. As far as I know, they don't consider themselves retired to any degree, though I suppose they have owned more and fewer houses at times over the years.

 

[JBTX]

Technically I probably fit into this category for much of the last decade, but I didn’t think of myself as semi retired, at least not most of the way

At about 51, 10 years ago, I was laid off from my last long term full time job. I jumped right into a contract gig, which mostly part time. That ended, couple of months break, but then started back up. That ended, several more months break, then did another contract job, turned into a full time job for less than a year then Covid hit and layoff. Several months break (with unemployment ) then another part time contract job for about a year. That ended 2 years ago, haven’t worked since.

My wife (5 years younger ) still worked full time that entire span.

We do get modest benefits for a “host home” for our disabled adult child.

So is that semi retirement? I don’t know. I am retired in that I don’t work a traditional job. But I have obligations to my adult disabled kid, and now my out of state aging parents, so it’s not as if I can get on a jet and spend 6 months in New Zealand.

 

[target2019]

She is semi-retired (1 Jul 2022), working a part-time job in her field. My date was 1 Apr 2020).

W-2 wage income is minimal, as we set the 403(b) contributions to 75%. When she leaves the job later this year (I hope), about 2% has been added to total portfolio over 3-4 years.

The bigger reward for her is that I am not there at work, and she gets to be annoyed by others for a change. It's more like a lower-paying volunteer opportunity, and that is fine.

 

[Flieger]

I think I am in this category. I don't HAVE to work at the brewery, but I do anyway to have interaction with others. At the same time, the money will help with reducing WD's from my retirement funds and paying for health insurance the next 2 years.

Flieger

 

[Markola]

Cool. What do you do at the brewery?