Friday, July 12, 2013


I was recently on vacation and met a couple whose life made me green with envy. They had both just recently retired, the husband in his mid-50s and the wife at age 48. The wife had taken a chance at getting a voluntary job elimination package, and the payout was huge. For now, they are just doing some traveling (business class, no less) and relaxing. They've bought an RV and in about a year, they plan to sell their home and then live in the RV for a couple of years while traveling all over the country.

Pretty sweet, huh?  For me, the idea of being able to retire in the next few years seems so far-fetched. I'm almost 45 years old, and my net worth is close to $800,000, which is great, but if I'm counting on having a long, happy life, I need to save a lot more if I want to be sure to have enough money. The thing is, I probably could retire tomorrow if I was willing to make some extreme life-style adjustments, like moving someplace where the cost of living was much lower, never traveling, never going out to eat, etc. Plenty of people live on less than I'd probably have to budget. But that doesn't sound like much fun!

The other alternative is to just drastically change careers. My job now is fine, but sometimes I'm just tired of it. What if I started over doing something completely different, at lower pay? Would that be fun? And could some other kind of work be fulfilling enough to make up for having to scale back on other pleasures? Or would I regret not having more cash coming in and saving more aggressively?

When I think about the benefits of retirement, I dream of having time to read and write and draw and travel-- traveling is the only part of that that gets really expensive. And the writing part of it could actually make me some money if I had more time for it-- I could blog more actively, and maybe even write some of the many books I've had ideas for. But for now, these will just be dreams, and I'll be back at work on Monday...


freebird said...

Depending on your constraints you might be closer than you think.

You're probably aware of the 3% safe withdrawal rate rule of thumb. So if your entire net worth is income producing assets, you could pull out 24K/yr to spend, which as you point doesn't get you far in NYC as I'd imagine rent and health insurance eats almost all of it.

The picture changes significantly if you retire full time overseas to one of the ultra low cost places like Thailand or several countries in Central or South America. That same income could provide a comfortable living if your definition of comfort allows you to handle the language and cultural barriers, the climate, and health concerns. People who aspire towards creative pursuits like yours and who are comfortable doing it mostly online may be a natural fit for the growing expat retiree community.

If you point your search engine at Ter Horst or Kaderli, you can get an idea of what it takes and what's on offer, they've been doing it for decades now. I'm thinking about this too.

Anonymous said...

Maybe you could do something new in the travel or hospitality industry. If you worked for a large hotel company, maybe you could cut your travel costs in half. I don't know if the job of travel agent still exists, but decades ago I knew someone who flew for cheap/free because his mother held that job.

Alternatively, speaking from experience, I think that travel/ relaxation is defined by being a break from day to day stress. I took a substantial break when my first (academic) career ran aground, and it didn't take very long to get bored! I've known families that are able to take long (4-6 week) summer vacations every year, with a goal of seeing all 50 states (by car for most of it). Especially if you could rent out the apartment while you're gone, that might make a lot of sense both economically and for sanity. If your current company wouldn't consider such a situation - possibly at a different time of year, depending on workflow - maybe you could downgrade into a company that would?

I come from a family of travelers, and personally I found it overrated. There's nothing I've done or seen in Europe, Asia, or the US, that I couldn't have done or seen in any of the major cities I've lived in, and New York is even broader than that. The essence of travel seems to be about being not-home, not able to worry about errands, and even struggling to learn a language or navigate reality. It can, in theory, force a new way of seeing. My trips to Asia have been unique in the way that dirt and crowding and poverty are not real in a textbook until you see them up close, and being my cultural heritage, but I am struck by a sense of "wherever you go, there you are."

Insurance Hunter said...

The way people approach retirement is changing as more and more people are finding that they are either not ready to retire at the traditional age or they are not financially ready because of recent economic developments. Either way, your ability to retire rests on your shoulders and you need to put a plan in place to help you achieve your desired retirement living situation

Anonymous said...

Great post. I hope you can get back to posting more often!

What you wrote about your definition of retirement is key. Financing that lifestyle is one exercise. However, you should be honest with yourself in your state of mind without the comfort of financial security you have today. If the latter doesn't bother you in a material way, you should go for it. Otherwise, take "dips" into your idea of retirement by pursuing these things in your free time more aggressively and see if you like it.

Elephant's Paycheck (David Bressler) said...


I just stumbled across your site, very cool. I'm in NY too, and in a similar age bracket. I have the same thoughts, it comes back to that I love NY, and to retire and still have access to NY is daunting.

Two things I'd offer as suggestions:

1. Is it possible to "semi-retire", meaning continue to work but not at full throttle? This gives you some flexibility to travel, but a safety net if it's not working out.

2. My "craft project" that I hope leads to "semi-retirement" is a blueprint for investing. It's just launched, and for now is a free-email course that helps you understand how to invest in a fun/safe way that aligns with your social values. At our age, it's a little late to start, but if you wanted to put yourself on a 10-year plan, you could have $60K a year in income without touching your principal (and without messing with that 'risky' 4%-formerly-known-as-3% rule). Have a look:

I've followed you on twitter and look forward to your future posts!


Roy said...

I tend to agree with @freebird. With your interests in drawing and travel your could change your lifestyle to one you choose. All you need is the first step. Your feelings about your current job could be just the push you need, but without taking too many risks. I am sure there is somewhere in the world you could settle comfortably, but without cutting your ties to New York.

How about a complete change for 3 months? For example, Cuenca in Ecuador is a wonderfully cultural city loved by many Americans. It also makes a good relaxing base to plan where to go to next, and especially to get around South America when you get the urge to see somewhere new.

Financial Independence said...

I think it depends on opportunity. In 2009, following the crisis in our company people were standing in line to retire voluntary.
Particularly pre-retirement age, as depending on level in the organization the package was between 1-3 monthly salary for a year of service.
Some people were 30 years and getting 3-8 year salary was awesome opportunity.

But there is a hint in your post - people travelling in business class, meaning that they were already on a very good money. Probably they could retire on layman's terms in their late 30-ies...
However some people just could not have enough. Recently being taking to a collegue of mine and he is retiring in 3 months time.
He accumulated over 9 million in his account, while living in $300 K house and never travelled anywhere outside US.
So he bought himself a huge RV and going to travel for a year. However his wife (a nurse) is going keep on working....

The idea, is pretty much as you said - not much fun. When your income grows, you develop expensive habits, so there is never enough, so people keep on working till they can...

Tammy said...

THe idea of retirement may sound appealing but I've seen people who were looking forward to retiring but then got bored with the same old routine of relaxing, reading and relaxing again. They ended up looking for odd jobs to generate a bit of funds and mostly to keep themselves busy. So cherish your per-retirement phase while you can :) and happy savings!

Joanna Tully said...

Yes, changing careers could be exciting especially your new job is related to what you really love doing. This is quite easy to do if money ain't a problem with you...Some start really early on planning and saving for their retirement so that they can retire and enjoy traveling at younger age.

Anonymous said...

MadameX, I love your blog. You might be quite interested about some new studies on the "safe withdrawal" amount for retirement. It certainly opened my eyes!