Got my annual “raise” today at 3.5%. The average for the department was 3% so I guess it’s better than a stick in the eye.
Happy Monday, everyone!
Since I’d rather not be working today: What do you expect your daily routine to look like in retirement?
I’m already retired but here’s how I structured my days. Mornings start off with breakfast and walking the dog. Then I focus on chores that I have to do…mow the lawn, laundry, groceries. After lunch is left open for fun things or projects I’m working on. Lately I’ve been splitting afternoons between digitiznig old photos, genealogy, reading and knitting. If my SO is working in the office, then I do afternoon dog walking duties too. After dinner is watching TV with the SO. I kind of fell into this pattern after I found myself wandering around the house bored trying to figure out what to do with myself.
Unclear, but I know it’ll involve more exercise than I’ve got time for now, more “fun” tech projects that I don’t have the time/energy to work on now, and of course, more time with family. I’d also love to pick up more “practical” skills that I lack now, I’m anything but handy around the house once you get beyond very basic plumbing.
I realize I’ve created more of a wishlist than a daily routine. 🙃
Should I pull the plug and RE?
- Today my investments are 0.5% away from 3% withdrawal rate to equal expected spending
- Am invested ~50% in growth funds, 43% in S&P, 7% in bonds and money market
- If I work, I’ll earn ~7% of my NW per year
Have you factored in old age costs? Lawn care or household help when it gets to be too much for you to handle on your own. I didn’t factor that and am now thinking I will regret that as I’m currently watching my mom start to decline and need more help.
Also increasing medical costs is part of the equation I guess. Aging is a pain. Hence I’m trying to balance retirement with some life left vs earning some more to make things smoother. Having said that, I sort of did take that into account.
As important as your current expenses, where are you in life? By which I mean, is there a likelihood of radical life changes still (marriage, kids, etc) that might completely upend your calculations?
No such radical change is expected. Am midway through my life, that is to say 45.
What’s the reason for your hesitation?
7% return is rather good, it will double my market return and moreover with much less risk. Mainly the uncertainty of the economy is what makes me worry.
It sounds like you are fully afflicted by One More Year Syndrome. I’d recommend googling that term and reading a bunch of the blogs that come up about the topic.
My favorite was the one at the top of my Google search, so I’ll just share it here.
At the end of the day, the least financially risky option would be to never stop working. The economy will always be uncertain. It’s up to you to determine when the risk is an acceptable level, since by the numbers you are there.
It could help to play through some worst case scenarios and make a plan for what you could do in the event they happened if you were retired. If the market crashes by 50% or more the year after you retired what would you do? Cut back on discretionary spending? Spend down a cash savings buffer? Get a part time job to cover spending? Go back to your current career? What do each of these options look like for you?
The alternative risk of continuing to work is that you reduce the number of healthy years you have to enjoy your retirement. There are so many stories of people who dream of their retirement and then die or become incapacitated in some way shortly after the retire, so they don’t get to enjoy the retirement they planned. Do you want to risk being that person?
It took 7 years of saving to finally reach 100K net worth. I am so burnt out… will it get easier?
It does get easier. At 100k is about where I started to see the effects of compound interest really take hold. Hang in there. It is so worth it.
I’m 16 years in and also burnt out right now. I think it’s pretty normal to go through bouts of it. Best to find a way to recharge if you can. I’ve got a lot of time off to book over the next six months and I’m hoping that helps for me.
Will FIRE lost against inflation? Or is there a way to fight the inflation?
I think the FIRE community is best suited to handle inflation. Let’s face it, if your seriously pursuing FIRE, you probably aren’t buying a ton of stuff. Housing, food and medical expenses are going up but when you aren’t spending on a ton of other stuff it doesn’t hurt as much. It makes saving tougher but not impossible. I think our current inflation is also a good reality check for people that haven’t experienced the ups and downs of inflation before. We have to account for that in our financial planning because it isn’t always a rosy 1-2%. The 7% mortgages that you are seeing today are laughable to someone like my folks whose first mortgage was around 13%. It’s all just part of the long term financial cycle that we have to find the best way to deal with. The best way to beat inflation is the best path to FIRE. Keep your frivolous spending low, invest in a diverse and well balanced portfolio and be flexible to change as life changes.
My concern if example, the country gone in chaos like argentina or venezuela. is there any mitigation on that?
Are you in the US? I can’t speak for other countries but I would have a hard time believing the US economy could devolve into that kind of situation. If it did, I think my original arguement still holds. FIRE seeking folks would still be better able to adapt to the situation. They would just step up their intensity.
Growing your food > making meals at home > eating at restaurants Walking/biking everywhere > public transit/carpooling > driving everywhere
Dealing with that sort of extreme situation would require extreme changes to your lifestyle. Building up skills to be more self sufficient and lower your spending to absolute minimal levels. If you are really interested in this, you might want to check out the Early Retirement Extreme book and forums. Jacob was an early FIRE blogger that focused on building skills to lower his expenses. I believe he was living on < $10k a year. That community is pretty hard core on slashing spending and closer to the prepper mentality it would take to survive hyper inflation.
So in the end, we eliminate the need of money, but doing everything for ourself, and reduce the need to buy things in economics system?
I’m not in US, in South East Asia.
Pretty much. Reduce your consumption so you need less stuff. Build skills that you could use to barter for things that you would otherwise need to buy.
