October 18, 2022

Thinking about retirement, part 2

Continuing on from part 1:

There’s the journey and planning…

This quote from the Fioneer’s interview with 1500Days has stuck with me. This isn’t a new idea, Carl’s been saying this ever since he retired: “FIRE won’t necessarily make you happy, and this was the case for me. My life was better, but not happier.” I bear this in mind as I navigate this whole thing.

I’m not counting on FIRE to make me happy. I have quite a few ways to enjoy my life already. Mainly I’m looking to remove obstacles. Removing fuel from the stress fire to use a very CA analogy. Getting back that 20/30/40+ hours a week and headspace to let me focus on the things I will continue to juggle: our money, our kids, hobbies we don’t spend time on now.

I’m thinking of Jim’s 2016 thoughts on how to transition to early retirement, and how he might have done things differently, and his updated thoughts on the matter in 2021 since he has a second chance at this retirement thing. The main point he raises is one that Tanja’s been talking about for years as well: retire TO something, not just FROM work. I think a lot about the things Tanja writes about – like our holiday plans that will be $$$ if they happen but I’m choosing them anyway because I don’t want to forget and let life pass us by. That’s something I’m very likely to do. I’m also contemplating how a friend was even busier for the 30 years of her retirement doing passion projects than she was during her intense career and I would be surprised if we didn’t have a similar shift to working hard on things that we care about, whether or not it pays money.

Like my friend, I doubt any of our efforts would yield income, that doesn’t happen to be a norm in the kinds of things we are interested in. It’s far more likely that we’ll be spending our own money to support others.

Maggie asked me if I really honestly think we won’t make any money after retirement, and really honestly? I thought we’d work a lot on things we care about and we won’t make money from it. But also really honestly, I’ll want to make money. Not enough to support a whole lifestyle maybe but enough to matter.

Originally this post wasn’t about retirement

I started a draft three years to ask: Where do you find your fun and fulfillment? I was thinking about how some days, it’s hard for me to remember what I did for fun when I could do almost anything, health and money permitting. The kids are holding me back! But so is work. So is my decrepit body that can’t remember the vitality of youth.

Anyway, chatting to Nicole and Maggie about what one might do in retirement made me think more about what I envision long term. Medium term, I have 17 more years of children in the house so if we retire anytime between now and 17 years from now, we still have at least one kid at home. Hawaii Plan gives me an idea of what the latter half of that range might look like as older kids need us less.

In that event, I have days, nay weeks, of short term things to do. My dream is that upon retiring, I’d sleep for a week. Then I’d go to the library, fill a backpack and tote bag full of books, and read for a week. I’d stop only for meals, walking the dog, bathing and getting into bed to read some more. Then sleep for another week. Maybe two.

Then I’d have some sort of routine of reading, binging shows, thinking and writing, grooming and walking the dog, growing more than just one container of food plants, learning to cook more of the delicious foods we get at restaurants now for lack of time (soondobu!). Of course I’d continue my giving projects and maybe pick up something activism related that my body can handle. I’d love to pick up more frugal activities, couponing and maybe even a spot of eBay reselling a la Katy Wolk-Stanley. I enjoy a bit of that but not when I’m extra pressed for time and energy. I’d love a first year something like Purple’s first year of retirement.

PiC wants to do more cooking, outdoor sports, and hiking. Things we already do in a very small measure.

Once the kids are largely out of the daily routine picture, maybe we’d need more. He doesn’t think he needs much more, and if he gets to go outdoors every day and then come home and cook dinner, I guess he’d be right for a while.

The things I loved 25 years ago: eating good food (SO MANY CARBS), playing with dogs and horses, horseback riding, running, hiking, doing other competitive sports, grooming dogs, reading, reading, reading, the occasional glass of wine or beer or a good cocktail.

What I love now: cooking and baking for my family, petting and playing with our dogs (I rarely see horses anymore, so sad), reading through my painsomnia. Writing this blog. Connecting virtually with friends. Some travel when that was possible. Sometimes I still love eating. My relationship with food isn’t the love affair it once was.

My world narrowed so long ago because of my health. Without a pandemic in play, I’m pretty happy!

I once said that there’s a ton more I’d like to take up but can’t for lack of time and money. I wish I’d written them all down at the time I said that just so I could review and see if I still want to plan for them. But since they’re lost to the hazy mists of memory, I’m pondering what kinds of projects would be meaningful.

There are lots of activities I want to do:

– Learn how to sew and knit, just for my own enjoyment and convenience. I’m unlikely to ever do anything serious with it. That’s something I’m practicing being ok with – not needing to justify a hobby as being useful before I’m allowed to enjoy it.
– There’s a chance taking up calligraphy OR just learning to write with fountain pens might make its way into my life. That also would be just for fun.
– Get in good enough shape to get back on a horse regularly.
– Traveling for food experiences. Surely someday in the years ahead, it’ll be safe enough to travel and enjoy delicious food in other countries. I want to hang out with Maggie and Donna in Alaska. I want to go back to Thailand. We must visit Japan and Indonesia for the first time. I have friends in DC I haven’t seen since JB was born. Friends in Pennsylvania we haven’t hung out with since before the pandemic. Friends in Arizona and Louisiana and Tennessee and and and. There are actually a surprising number of places and people I would like to see.
– Learn three languages. Or five. I’ve got a smattering of Spanish and Italian. I’d love to be conversant in both, plus Portuguese (I hear Portugal is expat friendly if it ever comes to that), Japanese, and Mandarin. Also if I ever reach fluency, that opens up even more new worlds of books to read.

These are all just for fun things. I’m divided on how to assess my level of fulfillment with this thinking exercise because I have a worrying habit of equating self worth with productivity. It’s time to flex the muscles of doing things for enjoyment and not only because they can bring in income.

If I keep working at it, I should be able to pinpoint what I want to do for true fulfillment and not just to scratch my codependency (need to rescue or caretake) itch. Fostering kids and dogs may fall into that category but until I know I can handle it in a healthy way, it’ll have to stay at the bottom of the list.

It occurs to me that I should include, for the sake of remembering that it’s part of my list, volunteering with the local CASA chapter if I can handle that in a healthy way. That remains to be seen. In that category, I also want to try to volunteer to be an adult literacy tutor (not sure if I would be any good at this) and volunteer to help refugees settling in the States.

:: What would your plans for retirement or semi-retirement look like?

October 11, 2022

Thinking about retirement, part 1

What would we do in retirement?

I’m thinking of the many pieces of an early-ish retirement puzzle as we wend our way in that general direction. This is a very long term work in progress. At a guess, we have ten more earning or accumulation years before we’ll be set. I’m definitely not focusing on an end point yet given the vagaries of the market and my own tendency to need to get to a goal, any goal, long before I’m due to arrive. Pretending we’re laughably far away helps mitigate my tendencies.

These posts are to help me ruminate because I won’t get everything all in one or even ten passes. It’s a good bet that my thinking will change over time, too.

I’m thinking about this in, of course, the form of lists.

– How do we get there?
– Where exactly is there?
– What will we do when we get there? (Probably most importantly)

How (much) do we save for retirement?

Correlated: how much will we spend?

What’s a “safe” withdrawal average rate for us? I don’t know what I’m comfortable with yet so I’m guesstimating 3.5%. I very much agree with Tanja’s thoughts that in general, the “safe” withdrawal rate suggests there is a percentage that we can always withdraw that will be fine and sustainable when in reality, it’s better not to expect level spending. That’s been borne out by my own personal experience of the past twenty years. Some of our increasing expense was down to improving our lifestyle baseline, allowing myself to spend on things that I couldn’t afford before.

Good and sufficient amounts of food, mental health care, physical health care, dental care, clothing that fits, making our home warm and dry, to name a few. This is different from true lifestyle inflation and setting higher anchor prices but I know there’s some of the inflation as well. Is having kids lifestyle inflation? It feels like it. Everything is more expensive with kids! They eat so much …!

I’m not comfortable with the fallback plan of popping back into the workplace if I took time off and it didn’t work out. My industry is conservative and small. The likelihood of an easy re-entry is miniscule. I only know one person who has lucked into a good return to the workforce in this industry since taking time off. Thus, I am loathe to make a plan that relies on going back to work as a failsafe, especially because my health won’t allow me to do what I had to do the first time around to prove myself. PiC’s preferred work and field is similar. There’s not a good reentry point for him when so many equally qualified and currently working people are vying for the same jobs.

While I want to do nothing but rest for a year, afterwards I’ll want to do something to generate income. Whether that desire bears fruit is a whole other story. None of my creative endeavors tend to generate much income.

Also, I don’t want to have to rely on that income. I want it to be bonus money, or else that’ll mean I traded a relatively secure consistent income for inconsistent income and a lot more stress.

My money questions:

• How much do we need for living expenses up to age 60 (covered by our brokerage accounts and short term money on hand)?
• How much do we need from age 60 on (covered by our 401k and IRAs)?
• How much is good healthcare and how do we find it (??!??!)

Definite expenses:

• Housing (plus taxes, insurance and maintenance)
• Transportation (plus maintenance and insurance)
• Healthcare – the biggest question mark of them all
• Travel and entertainment
• Kids – lessons, activities, sports (??)
• Food
• Utilities
• Clothing (minimal now, it’ll increase once the kids stop living in hand me downs)

I took our highest annual spending to roughly guesstimate how much we need to spend in the future without cutting back on our current lifestyle.

I want to plan for a moderate lifestyle: to have reasonable freedom of choice, the ability to buy anything we need, a few things we want, and give to others.

I’ve roughly outlined how much we need invested in two separate pots of money (the first two bullets above) and run several different calculators to validate my guesses.

Healthcare costs and education costs for the kids are still big blanks that I can’t fill in. A knowledgeable friend suggested that we budget $12k per year if we retire before Medicare and that both makes me faint and sounds realistic.

I don’t know what the kids will ultimately do for college. We just know we’ll have some money saved and plan to cashflow some expenses for them. They may still have to take some loans if they choose more expensive paths than we had budgeted.

We’re far enough away that I don’t have the information I’d need to fine tune the financial goals. I’m making minor adjustments here and there to focus intensely on investing in our brokerage and that’s good enough to worry on for a few years as far as money goes.

Am I missing anything big?

What does retirement look like for us?

I can spend my time figuring out what we plan to do with those reclaimed hours and years because I want to retire to something, not just drop work and then feel adrift if my hobbies alone aren’t fulfilling. Then again, I can’t imagine I have to worry about that TOO much for the next 15 or so years. Our kids are our biggest priority, and biggest expenses after housing, assuming they’ll have educational expenses. So their needs provide a soft landing for a transition. Then there are so many possible hobbies! I’ll dig into that later. For now, I’m enjoying the feeling of forming a structured plan even though dire warnings about the future are hard to shake.

Also, just a quick consideration of future possible expensive curve balls: I will continue working on my mental and physical health. That costs money.

Familial curveballs: I’m fairly sure PiC’s parent has enough money for their needs, they have an estate even if we don’t know the details.

I still feel like there’s another shoe that’ll drop on my side of the family but I’m doing my best not to think about my abusive parent or brother. It’s hard not to feel like there’s unfinished business there. I am glad to have laid the groundwork that I don’t have anything more to give them after they used me as a bank for so many years. They contributed significantly to destroying my health, without remorse or care for me, I don’t owe them one more cent. (Repeat repeat repeat, in therapy and out, since I obviously still feel some guilt over this. But I don’t owe them the rest of my health or life.)

My surrogate families are generally ok financially. My niblings are a vast group of kids and I plan to be modestly generous with them since there are so very many of them.

Alongside the structure and planning, though, is the realization that we have a long road ahead of us, both in getting to retirement and in spending time in retirement if we are lucky.

I want take advantage of this long path to do all the thinking and planning of what life after retirement might look like.

This got too long so I’m stopping here and picking up in a new post…