There was the “Why retire” question and then there was the “How to afford retirement” question. Next perhaps is the “So what’s retirement like” question.
Although I suppose that many who retire have no clue at all what they are getting themselves into, I am not entirely inexperienced with what retirement will be like. Back in 2011, when I was 58, I was laid-off from a long-time job when the company closed down the facility where I was working. The options were to relocate to another state or take a 9-month full-pay severance. Moving to another state was not an option (I mean, Jesus, it was New Jersey, fergodssake!) so I took the money and ran. At the time I felt that maybe I would just declare this to be “retirement” and simply not go back to work at all, but our retirement finances seemed to be “borderline” at this stage, and I felt a little “young” for this anyway, so I decided to spend-out the severance and then determine what to do. Eventually, when the severance-package ran out, I started to half-heartedly look for jobs just to satisfy the technical requirements for the Unemployment Compensation that I was entitled to, and out-of-the-blue what is truly The-Perfect-Job simply fell into my lap. Hey, don’t hate me, it’s not my fault that I’m lucky (or maybe it is just quantum mechanics). Anyway, the point is that during this period I had what I call my “Practice-Retirement” for almost a year.
During this Practice-Retirement, which like my current plans also started in September, I found that for about the first 3-months I had a huge burst of manic activity. There were all sorts of home projects and personal day-trip excursions and other Wanna-Do undertakings that I had been saving up and dreaming about for years. Every day I leapt out of bed to go do the next thing on my Retirement Wish List. After about 3-months of this though, things started to change. First it was the weather, which got cold and so outside activities became less appealing. Then I found that the large-scale indoor projects that I had on my list were either already done, not practical or no longer seemed very interesting to me. The things left on the Retirement List were either too big and intimidating to start on, or too small and trite to be bothered with. I also discovered that Newton’s First Law of Motion also applies to retirement as well. Since I now had all-the-time-in-the-world to get things done and there was nothing pushing me to accomplish anything by any specific deadline, it was way-too-easy to put things off and just sit for hours playing stupid computer-games. Once I started falling into the routine of playing computer-games for hours, and then napping and then watching TV for hours, it got really hard to break that habit even when the weather started turning nicer in the spring. This fundamental lack of “productivity” and the aimless nature of my typical day eventually began to make me feel a vague sense of “disquiet” with the whole concept of retirement. I did recognize this at the time though, and I was psyching-myself-up to do something about it when I found that Perfect-Job and that ended the whole noble experiment of my Practice-Retirement year.
I do think that I learned some things from this Practice Retirement however, and I plan to apply these lessons in this second go-around. First-and-foremost, I need to impose some structure and discipline to my daily routine. Maybe fulltime housewives know all about this, but for anyone else who has gone into an office daily for 35 or 40 years and is used to “The Home” representing freeform down-time, it is critical to establish a work-ethic and a pattern of productivity around the house. You may not be working-for-a-living anymore, but you don’t want to be moss-on-a-log either (trust me, it’s not as satisfying as it sounds). The problem is that once you get addicted to the drug of lethargy it will be really hard to break away from it. One of my mistakes the first time was in telling myself that I was going to take the first month off as “vacation” and lie around and “rest” before trying to establish any kind of formal industrious pattern to my new life. No! Get right into a new routine immediately on Day-One. You can always back-it-down later if things get to be too much, but the first-deadly-sin of retirement is Sloth, and that’ll kill you faster than prostate cancer.
The second lesson of my Practice-Retirement year is basically the opposite of the first lesson; Pace yourself, and don’t try to do too much too soon. There is a fundamental difference here though. Lesson-One is about daily routine and the little-shit like showering, shaving and dressing every day by a certain hour, and establishing a regular schedule for cleaning the house and going shopping and working-out to stay fit, and deciding when you are “allowed” to take a nap or watch TV or play computer games. Lesson-Two is about the list of larger-scale projects and Grand Objectives. My plan this time is to lay out a schedule for myself, starting on Day-One, where basically 1/3 of the day is “Routine Maintenance”, 1/3 of the day will be “Special Projects” and 1/3 of the day will be “Whatever” (because I still need that freeform downtime). I plan to make a list of fair-weather special-projects and foul-weather special-projects so that when it starts getting nasty outside in January (or August) I can put down one and pick up another without wondering what I should do with myself next. It is in that seam-of-indecision when inertia can creep in and paralyze you along with all of your Good Intentions.
My third Practice-Retirement lesson may not apply to many other people, but it was definitely a “Thing” for me. I am very asocial, I have no personal friends and I engage in few communal activities and I found that once I wasn’t driving to work every day I could go for extended periods of time without ever leaving our property because I enjoyed the seclusion. This meant that I had little external human contact with anyone other than my wife. This really didn’t “bother me” at the time, but once again, it is a matter of establishing behavior-patterns and long-term Habits for a New Life. I found that the less that I saw of other people, the less that I wanted to and I could tell that eventually I might turn into a complete recluse because although this isolation might be considered “unhealthy” by certain experts, it was not unappealing to me. So, my third take-away lesson from my Practice Retirement is; for the sake of balance I have to force myself (early-on) to get involved in some activities that require me to leave the house maybe 2 or 3 times a week and deal with other people. I have a number of things in mind for myself for Next Time, including joining a health-club and volunteering at some local community centers. I don’t need to overdo it (I still like my solitude and plenty of personal space), but having a couple of outside commitments each week should at least keep me in practice communicating with other members of the human race – for those times when I really have to.
Think that all of this sounds like TOO much structure, discipline and “rules” for retired life? Well, everyone is different and maybe you are someone who can get-shit-done without a formal list or hourly schedule, but the point is that however you define it and however you accomplish it, you will still need to be “Productive” in your retirement as defined by your own personal standards. Without this you will surely be unhappy because “productivity” and “accomplishing something” is a core component of human happiness.
I suppose that before anything else the first question about retirement is; how can you afford to quit working at any age? I have very strong, and perhaps radical, opinions on this subject and I could rant-on for 10-pages about it, but I will endeavor to control myself. Long-winded rants are one of the things that I hate most about Social Media and I don’t want to contribute to the pollution. Well, let’s get the “radical” part out of the way first.
Anyone who thinks that RETIREMENT = SOCIAL SECURITY is a total idiot.
And, yes, I know that this includes 95% of the American public, all media outlets and even the SSA themselves. The thing is, SS was never intended to support 10-20 years of comfortable leisure, and it is not structurally built to do so. Social-Security was created in the 1930s to insure that people who were physically incapable of working would not starve to death. That’s it. That is all it was designed to do and that is all that it can do. If your goal is to sit in a chair in a bare room and eat spaghetti every night, then maybe you can retire on Social-Security, but otherwise you had better have a way to fund your preferred lifestyle yourself with your own personal resources. Contrary to popular mythology, no one has a “Right” to a few decades of lovely relaxation once they hit 62, and if that is what you want then you have to pay for it yourself. The modern concept of “retirement” as a sort of easy-going permanent vacation for “mature adults” in reward for their long service to society has only existed for about the last 60 years anyway. Before that everyone just assumed that they would be working-for-a-living until the day they couldn’t lift themselves out of bed. This means that the whole question of “affording retirement” is a very new and novel concept in human history and one that we really don’t have a lot of experience with.
OK, let me shutdown the rant before it goes any further. You are either clapping-and-cheering for me at this point, or spewing venom and about to have a stroke, but we don’t need any more of either.
In my case the reason why I can afford to retire at the age of (almost) 64 is that I have worked and specifically SAVED for this for the last 36-years of my life (when I started contributing the maximum into my IRA). In my case I plan to postpone SS filing until I turn 70 to maximize the benefit and in those intervening 6-years I will be funding myself exclusively from my own savings and investments. It amuses me to note that even the SSA website simply assumes that the moment you quit earning a FT-income you will claim and draw SS-payments and they make it hard to calculate a delayed claim (you have to download a special gorpy DOS-based program).
But anyway, obviously The Big Question is; so how much does one need in personal savings in order to retire? Of course there is no one Magic Number and this depends on your own personal situation, lifestyle, what you are used to, what your plans are and what makes you comfortable. I don’t want to get too personal, but let me put it this way; our total net-worth (assets minus debts) is more than 20-times our IRS-1040 annual income, and most of that is liquid savings and investments that we can easily live on in retirement (as opposed to home-equity or other real property that you can’t easily live on). I’m sure that 30 different “experts” will give you 35 different opinions on this, but as one who is about to Take-The-Plunge I find that this 20-times ratio “feels” about right and when I run-the-numbers (which I do obsessively) it all seems to work out on paper. Let me emphasize a point that I made in the last paragraph though. I did not “inherit” this money and I did not win it in a lottery. I earned this money with my personal labor and the reason why it is there is that for the last 36-years my wife and I have lived-below-our-means and saved it for the express purpose of retirement. In other words, the only way to HAVE money to retire on is to NOT SPEND IT (duh).