Should I Retire Early?
This post isn’t for me, I’ve already committed to retirement, it’s an answer to the regular stream of friends and colleagues who ask me this question, it’s my attempt at a well thought through answer, rather than a quick email reply.
To get started it might be worth taking a look at why I retired, two years ago at 51. I’d always planned to retire at 50, but when the government, in it’s wisdom, pushed the retirement age to 55, I thought I’d have no alternative but to continue working for a few more years. As it happened circumstances arranged themselves to allow me to retire on savings and cash for a few years, before accessing my retirement pot at 55. I’d planned carefully for my retirement at 55, weighing all of the options and thinking through what I would do, how much money I needed etc. These posts can be found here, but the most important ones are:
- Why I Decided To Retire this explains my unusual circumstances, the rest of the posts are relevant to most people
- First Thoughts On Planning For Retirement, my first embryonic ideas on most of these topics
- Retirement Planning and Longevity covering longevity, inflation, index linked pensions, annuities
- Retirement Lifestyle Design covering resilience to uncertainty, flow, progress, movement
- Reducing Cost Of Living In Retirement covering cost increases, cost decreases, inflation or deflation
- Personal Preparations For Retirement covering strengthening relationships, getting house ready, baseline fitness
- Being Satisfied In Retirement covering daily activities like fixing, creating, tending, making progress, helping, learning, appreciating, having fun, meeting people, planning for rainy day, variety
- Do I Want To Work In Retirement? covering carrying on working for my existing employer, balancing health and work, doing another job, how to decide
- How I Plan To Spend My Time In Retirement covering balance, will I have as much time as I think, rainy days, winter months, stay at home or go on holiday, variety, routine
- How Much Money Do I Need When I Retire? Estimating my cost of living and income
- Thinking About Where To Live In Retirement covering stay home, trade up, trade down, move to a new place
- Planning A Creative Life In Retirement one of the keys of a fulfilling retirement for me will be to spend more time creating, I have lots of ideas
- Hobbies For Retirement I can’t think of anything to say that’s not already covered in this great article
- Learning Priorities for Retirement when I retire I imagine that I will have more time to pursue all those things that fascinate me, learn new skills, learn new languages
- Practicing Retirement covering part-time work, holidays, low cost living, low cost travel, low cost accommodation, how robust is my body
- How long should I keep on working? covering when’s the right time to retire, the temptation to keep working
- Coping With Declining Energy and Resilience covering chronic illness, injury, muscles, tendons, energy levels, electric bikes, pacing, seaside walks/cafes
- Books and Blogs About Retirement blogs and books I recommend and books I don’t
As it turns out while writing these posts was very helpful in preparing me emotionally for retirement, I didn’t predict my actual retirement experience perfectly. I fell short in two important ways:
- I assumed I would want to model my new life on my old life, for example continuing with lots of holidays and travel
- I assumed that I would want to fill my time with lots of activities, rather than slow down and be happy to ‘smell the roses’, or rather enjoy the simple pleasures
The most important thing in my retired life ended up being the important of finding a passion, which I described in the post Finding A Passion In Retirement and I got this fairly accurate as all the passions I ended up following made it onto this list.
So looking back on the last couple of years, what have I learned?
- I decided fairly early on to commit to retirement, to make a successful retirement my job. By that I mean that I worked on a retirement strategy, developed a plan, set objectives, put in the effort required to make it succeed, tracked my progress and learned from experience. You can see all of this in action in my retirement related blog posts. I think it’s worked out well, but it did take sustained effort.
- I decided that in order to commit to retirement I needed to stop clinging to the idea that I would go back to traditional work. This proved to be important to me, it nudged me to reduce our cost of living to a little below our means, it freed up a lot of time that would otherwise have been directed at keeping my work knowledge and contact network fresh, and most importantly it forced me to focus on making my retirement fulfilling.
- I needed something to get up for every morning, something that really excited me. At first this was hiking, cycling, travel, meeting with friends, but these are not very enduring ways to spend a life, they assume motivation, good weather, enough money, good health. I needed something more and I’d planned for it, I needed a passion to provide an focus for my retired life and that turned out to be growing my own food and embracing the allotment community. I have dozens of other things that I enjoy doing, but the allotment provides the anchor that stops me drifting.
- In choosing a passion it’s important to find one that also provides purpose and the allotment delivers on that nicely. In contrast, climbing mountains or walking the canals of the UK might provide the passion, but they are inward looking, purposeless activities, which would entertain me but wouldn’t sustain me. They could become purposeful if they laid the groundwork for sharing that passion with a community who appreciated it too, by writing, photography etc. I’m planning to enhance my already purposeful food growing passion in that way, by sharing my progress and experience, by pushing the limits and experimenting.
- I decided to embrace a lower cost of living. Early on I decided that rather than finding ways to top up my retirement ‘income’ with part time consultancy, selling my allotment surplus, playing the stock market, doing casual work, writing etc I would embrace living simply and lowering our cost of living. This is a challenge in itself and has provided to be both achievable and enjoyable. I’ve written about my experiences of not buying anything and focusing on experiences on this blog. Last year I had to spend a lot establishing the allotment, but this year I’m going back to spending very little and enjoying the peace and freedom that comes with it.
- My life has slowed down a lot. When I was doing my retirement planning I envisioned a life that was full of lots of activities, just like my working life was. That’s not how it’s shaped up, as the months have ticked by it’s slowed down, I’ve learned to appreciate the small pleasures more and more, to take delight in watching the sun rise and set, in planting, nurturing and even weeding, in cooking from scratch, in riding my bike to the shops, chilling in my library, sipping an ice cold drink on the patio, reading a good book. Hundreds of little activities have expanded to deliver a level of contentment that I didn’t expect.
- I’ve much less need to ‘escape’ from my daily life: I’m not bored, I’m not stressed, I’m not lonely and as a result I find that my need for travel, gadgets and ‘big’ experiences has waned. I enjoy them when the opportunity presents itself, but I don’t yearn for them.
- It was worth grafting in the first year to systematically eliminate annoyances, worries and stressors from my life, while I had the energy and motivation. These things could have chipped away at my motivation over the years and I might never have got around to fixing them later.
In summary then I don’t recommend that anyone retire early unless:
- They are prepared to put in the effort to make their retirement a success
- They have a good idea of how they will find passion and purpose in their new life
- They are prepared to embrace finding ways to lower their cost of living, rather than resent the need to
- They are prepared to commit to their retired life, rather than just run away from their working life
- They have the mental capacity to drive themselves, rather than have someone else tell them what to do all day
- They can live within their means, without drawing a final salary pension at a reduced rate (unless they expect to die in their early eighties, or don’t care)
Lacking any of these it’s probably better to semi-retire, take mini-retirements, practice living a simpler life before retiring, down size their job, find a different job they enjoy more, and/or develop some purposeful hobbies.
Back to me then, has everything gone perfectly, or are there any further lessons to learn, progress to be made?
- It’s been a bit of a struggle for me to fully embrace my retirement while my wife continues to work in a stressful and all consuming job. We were used to having shared passions, for example raising our four children together, and I’m really looking forward to returning to a time when our passions are aligned again.
- Much of what I enjoy in my life now depends on good health, but health is fragile and so I continue to work on making my retired life more resilient to that uncertainty, remember I worked as a strategist and a good strategy is always resilient to uncertainty.
- My life is so disruption, stress and worry free that I’m no longer very good at dealing with it, I lack the practice. I now find myself avoiding things that bring these challenges with them, for example travelling to new, unfamiliar places, or dealing with challenging DIY jobs. To some extent I think these ‘challenges’ would be easier shared with my wife, but they are well within my capabilities so I shouldn’t need to avoid them, the simple, easy life has it’s drawbacks and it’s important to face them.
My retired life looks nothing like my working life, which surprises a lot of people. I no longer spend my days sitting at a desk writing reports or attending meetings, it’s now about:
- moving naturally throughout the day on purposeful activities
- being as self sufficient as is reasonable without trying to withdraw from the modern world
- leaving the world better than I found it
- being part of a community and sharing what I know and love
- being a good husband, dad, grandad, friend and neighbour
- being kind to myself and compassionate
- learning and experimenting
- living simply, in comfort and contentment and well within my means
- being busy, but not rushed
In closing I will share this parable, which has a lot of meaning for me, it’s shaped my life for decades and continues to inspire my retirement:
An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”
The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”
The Mexican fisherman asked, “But, how long will this all take?”
To which the American replied, “15 – 20 years.”
“But what then?” Asked the Mexican.
The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”
“Millions – then what?”
The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”
Every day I like to walk down to the beach to watch the sun rise and set, this photo is one of the better sunsets!