I’d like to retire…not today, but someday not too far off. I’ve been thinking about what retirement means to me and what I want from being retired.
My vision of retirement:
- not being stressed about making money
- not having any major debts to pay
- being able to travel at least 6 months of the year
- staying fit
- being able to do the stuff I love
- having a comfortable place to live
- having access to decent medical services
I’ve been playing with retirement calculators trying to figure out how much I need to save to get a modest investment income. The result is a large number as I have no pension or other external source of income aside from the money I’ve saved from my personal income. I could save more each year, but I also believe it’s not smart to assume you’ll ever get to retirement and work exclusively for that. I could die anytime and I want to spend money now to travel, do the things I love which includes futzing with bikes/gear. I think you need to strike a balance between what you save and what you spend so that neither is out of control.
So I gave my retirement assumptions some consideration and realized that I didn’t really want or need to stop working, but I did want to work less and be less stressed about my job. I like interacting with people and I like where I am living – especially in the late spring/summer/early-fall.
So my plan looks something like this:
- Phase 1: Saving – right now I have a target amount of $$ I want to put away that works with the rest of my plan to give me a modest income down the road.
- Phase 2: Semi-Retirement – once I’ve saved my goal $$ and those investments are growing I can stop working fulltime, stop saving $$ and switch to a 6 month travel/6 month work cycle where I just need to earn enough to cover my living expenses.
- Phase 3: Full-Retirement – when I am ready and my investments have grown to another goal value I can stop working completely.
What I like about this plan is that the savings goal to get to semi-retirement isn’t so crazy that it’s not within reach. It also allows me to be flexible if my investments do better or worse than anticipated or something else comes up. Perhaps more importantly it gives me some benefits early so that if I don’t live to retirement age I haven’t been saving all my life for some abstract never to be seen phase of life. I am hoping that the ability to work less and/or work doing stuff that I really like will allow me to keep my physical and mental health at a high level. There is no point getting to retirement with a broken body and a bad attitude!
A few things that have become very apparent to me during this process are:
- simple needs/wants makes for a much easier life. If your idea of a kick ass vacation is camping for free on a beach in Mexico kitesurfing once you’ve bought your gear your daily expenses are ~$20/person = $600/month.
- if you want luxury it’s going to cost you! Staying at a fancy beach resort in Mexico can run you $300-$400/day/person = $9000-$12000/month.
- if your ideas of fun involve a lot moving your body not only is that often a low cost way to spend your time, but you’ll likely stay healthier which is cheaper in the long run and improves the quality of the rest of your life.
- with a positive attitude you can find a way to be happy in most situations.
- with a bad attitude you’ll have a miserable time in paradise.
- save money early even if it’s just a small amount and let it grow for as long as possible.
- trying to save/invest close to retirement is way harder since you don’t have the time to let investments mature long enough.
- there is always someone richer than you to compare yourself to and always someone poorer than you.
- appreciate what you have in terms of loved ones, health and material things.
I do realize that is all just a theory at this point, but without some sort of plan you just end up where the currents of life take you so I like the idea of working towards an achievable goal. If things don’t happen exactly as I had hoped that’s fine. Part of the process is to reevaluate where things are at every year and adjust accordingly.
One thing is for sure you can no longer pretend you are a young guy when you are playing with retirement calculators!!!…=-)~