Category Archives: Early Retirement Lifestyle

The Boring Early Retirement Truth: It’s What You Make It

Early Retirement Lifestyle, Non-financial Aspects of retirement,

I’m going to retire early and travel, sleep in, and make my life an endless vacation. I thought it, said it, and have heard it many times from others. Well, maybe it’s true for some. But for me and most people who have or had  this dream, it isn’t our reality. Which sadly can lead to retirement disappointment. As someone who ditched my long career over 12 years ago at the age of 51, here’s the boring early retirement truth: It is all on you to make retirement what you want it to be. 

We have to be prepared and willing to make our retirement the adventure it can be. The euphoria that comes on our first day of retirement fades and drags away any of those freewheeling dreams we might have had. We have to be ready to start a new phase of life. There are a slew of different challenges we must mentally commit to accept and work though.

The Boring Early Retirement Truth: It’s What You Make It

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The Basic Boring Early Retirement Truth Is We’re On Our Own To Make It Great

There’s nothing earth shattering to be revealed here. The boring early retirement truth is our retirement depends on much more than the portfolio numbers that we need to support it. Our numbers are obtained, invested, allocated, rebalanced, and for the most part do what they are supposed to do based on historical analysis. 

It’s the other stuff that causes retirement grief or success. There’s no nifty non-financial retirement calculator or program to rely on. We are on our own to develop our retirement vision and how to get there. Believe me, it can be a fluid and indirect trip over the years. For as long as we are on this journey, our required effort to adapt never ends. Here are some of my observations collected over my decade-plus of early retirement. 

Big Dreams, Little Sustainable Support For Them

I have to smile when thinking about my preconceived notions of what I was going to enjoy doing in early retirement. Some of it was just dreams. When we are busy working, we can believe that it’s only our lack of free time that is keeping us from doing some things we dream about doing. When I finally had the time, I found out a few things:

  • For some retirement dreams it wasn’t a lack of time that kept me away from them. I just didn’t realistically have the finances to support them. Imagine that. We are always trying to dream big. Sometimes too big.
  • Other retirement dreams I found that I had the finances but would in no way be worth the cost in finances and time for me to do them. 
  • Some retirement dreams I got a taste of and found out it wasn’t my thing. 
  • Then perfection, when it’s right it’s exactly where and what I should be doing. But I had to ditch doubt and notions of previous failures to be willing to make the leap and try it first.
Did any shattered early retirement dreams cause a sense of retirement failure? 

Not hardly. We have to be willing to explore, test, and learn as we go. What looks fun and exciting while reading about other’s adventures or things we thought would make life wonderful may not be for us. I still enjoy reading about and investigating things of my retirement dreams or curiosity because who knows? There’s always an avenue I have no inkling about.

We spent a lifetime doing what others laid out for us or demanded from us and then measured every which-way to Christmas for success or failure. 

Who would have thought that after decades of identifying with our work related title or occupation we could possibly encounter mental turmoil when we decide to give it up. Retirement freedom means it’s on us to test the waters and push ourselves to find out what our thing or sense of purpose really is. If what we are drawn to or dream of stalls or starts out perfect and then fades, just move on. There is no longer the required need to measure up. It isn’t failure, it’s just change.

Being Bored In Retirement

I never thought I would be bored in retirement. Not before or after walking away from the grind. I can’t say I’ve been bored either. Whenever I hear someone say they would be bored in retirement, I agree with them. Yes, you will be bored. Best to stay in the rat race feeding the system. Just as it was designed for. 

If we say we will be bored in retirement we are making a statement of belief. We’re not ready to ask whether we could possibly enjoy being retired or not. Nor willing to accept another’s experience or suggestions. 

Having periods of inactivity, projects, travel, etc. doesn’t have to equate to boredom. We have to get used to learning how to enjoy doing nothing while celebrating the little things in life that the freedom of retirement brings us.

The Mental Bumming Burden Of Financial Volatility

News flash! The portfolio and market numbers go up and down just like before retirement and as it always has through history. We will just care more about it in the early years of retirement since we’re for the most part not adding earned income into it. At least for myself, I skipped away with a less than a fat million dollar portfolio and was alarmed whenever the market took big drops. I now believe a lot of it was more connected to losing my work identity and having to rely on a system I have no control over. 

We do have some control and learning to accept that takes time. I find looking at my financial plan the way I was forced to do for long-term career success worked to ease my mind. Refresh, reevaluate, and rebalance becomes much easier to do and market induced panic no longer lands. From portfolio allocations to spending or budgetary tweaks, it’s all on us to find the right balance for retirement success. 

Accepting A Limiting Definition of Retirement

I don’t get it, and do try to understand it, but why would anyone want to be free from a life of unrewarding work obligation and then throttle yourself with a limiting definition of what retirement is? I’m talking about paid adventures in retirement.

Want to make early retirement easier to accept?  Another boring truth about early retirement, just keep the definition loose: Retirement is the absence of NEEDING to work, not the absence of working. Not that finding fulfilling work in retirement is necessary. It’s just adding the prospect of an open mind of happily riding that horse when the opportunity looks perfect. Get off when it isn’t.

I’ve had some awesome paid retirement adventures and have this same attitude to take with all my retirement endeavors.

Address Social Life Challenges

I found the sting of realizing that my social life was 95% tied to my work. It took time and effort to rebuild a social network within my community where I was going to be living the dream. There’s no magic resource or tool that will tell you that you have this covered.

We leave behind a lot of BS when we retire. But there was also stuff we liked and enjoyed. I found that the people I associated with were only there in my life because we shared the same rat race burdens. It was just like I experienced when changing jobs. Most ex coworker pals drift away. It’s natural and retiring is no different.

I found a new and rewarding community based social life by volunteering to support things important to me, frequenting a local small independent coffee shop where locals can be met, and attending free classes offered at the local library. Then it was accepting the coming social invitations even when it challenged my comfort zone. My social life grew from there. 

You Gotta Make Moves, Nothing Will Likely Just Fall Into Your Lap

When it comes to retirement, we can’t sit back expecting adventure. Another boring truth about early retirement is the old saying, out of sight, out of mind. Get out of your comfort zone and constantly test the waters.

Many times I enjoy being surprised at just how wrong I was about something or some people. It makes taking the effort to find out totally worth it. It is much better than sitting back wondering about something and regretting not being involved or participating in it. Invitations to adventure are rare to those who aren’t seen. By always sitting back, it becomes easy to fall into a boring routine just to avoid stressful risks.

Stay Curious and Open Minded, But Always Question

Sometimes we are drawn to real opportunities for a great retirement adventure. Other times it becomes obvious that we are falling for a hyped-up false version of something or someone. When that happens it’s OK to walk away and don’t look back. 

Live and learn is my basic boring truth about early retirement. There have been a few surprises both good and bad. But without curiosity and an open mind, I wouldn’t have had the great experiences I’ve had over the past 12 years of early retirement. 

The Retirement Mortality Creep Made Me Do It, What A Nag

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Having enjoyed nearly 12 years of early retirement freedom, I understand what got me here and what’s necessary. I’m now in my early 60s and consider myself fully experienced in retirement or at least my version of retirement. I would think by now that I could peacefully go through retirement without being constantly nagged that I’m blowing it, but nooooooo!  I’m instead constantly battling with the retirement mortality creep. A two faced and unrelenting little monster that has creeped into my thought process and is always hanging around. 

I know why it’s there. Choosing to retire early funded from a less than obese portfolio comes with the paradox. Wanting to live a full and free life taking full advantage of time left here. But also not doing anything stupid that would cause blowing through the nest egg before leaving the planet. Is it possible to both love and hate this nagging creep?  

The Retirement Mortality Creep Made Me Do It, What A Nag

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Trying To Find Balance With The Retirement Mortality Creep

I’ve always told myself that life’s too short to waste on doing things you don’t want to do or live a life you don’t want to live. It was a keystone motivation to ditch the corporate rat race and strive for early retirement.

That awareness of having finite time was a primary motivation to get out while young is most likely when the morality creep was introduced. It was a love fest then because it was helping me meet my financial goals. The focus was all on working to save enough to fund life’s adventures before it’s too late to enjoy them. But time and mortality is a difficult concept to mentally quantify and reconcile. 

The thought of our own mortality is one thing when you’re young, healthy, and looking at it as 30 or 40 years plus out. It’s another after you start to feel the aches and pains that a lifetime of sports, bumps, bruises, and abuse your body is coming to collect on. It starts with hints of pain specifically designed to be our daily reminder that things are a changin. There’s a Liberty Mutual TV ad of kids skipping rope into old age with the final quip “everything hurts”. It’s only funny because of how true it is. That reality is exactly what the retirement mortality creep feeds on, just when our health and mortality all comes into better focus. 

Our brain either openly or subconsciously pays attention and figures it out. 

That’s the retirement mortality creep that can throw us off plan. When we start to think and act with the view of everything within an ever compressing timeframe of health and life, or for some maybe thinking it’s a lot longer than it really is. It can cause us to impulsively change our plan or how we want to live. Part of the problem is that this little creep which was a key motivator to have a happy fully funded retirement now talks out of both sides of its mouth. 

My most recent temptation and failure to handle the mortality creep –

Our coming together was unplanned and sudden. Without any doubt, she gave all the signals that I could have her if I wanted her. She was curvaceous and sexy, making me feel younger the minute I was in her presence. I felt something I hadn’t felt since my youth. I knew I entered into a minefield, but the nag of the retirement mortality creep screamed at me, life is short, when will you ever have this chance again? 

It convinced me to allow things to go too far. I was smitten and willing to kick a decades-long love to the curb to make room for her in my life. Throwing it all away to start a new chapter. One that I knew wouldn’t last long. 

She was a beautiful early 70s Corvette Stingray. The car of my teenage year’s dreams and what could be a new addition to my retirement’s automotive passions. The price was right and her condition was spot on. I test drove her and after an hour of checking her every inch, pacing a circle around her, and enduring the mental anguish listening to the voice of my mortality temptor in my ear, I came as close as one could to make her mine. I agreed to buy her but then painfully backed away from the deal. Why? Because the creep abruptly changed its tune and started loudly wondering if the hit to cash reserves might be bigger than expected. 

I checked back later as I questioned my decision. Within 3 hours she had gone home to be with another, ensuring there would be no decision backslide. A month later and I’m still not sure if it was a missed opportunity or successful rescue.

I was shaken and then realized what had happened to me. 

There wasn’t time to fully prepare for this deal. I started to rationalize a one time retirement budget-busting purchase on something that made no financial sense, but one that would add some welcomed passion into my retirement hobby. All because it dropped out of nowhere without time to completely think it through. The mortality creep convinced me that I deserved to have it while I’m still able to enjoy it. Or at least my idea of it, because it’s too easy to only see the upside when in this mortality mind-mode. 

That is until the creep changed course, forgetting all about pushing to take advantage because it’s a short life and living it up. Now this nag was focusing on the considerable ancillary costs associated with this, as is with most things in life. It was warning me that even though I have the cash to get it, maybe I’m spending money I’ll need much later in life to aid an older, broken down me.

I was mentally rushed during this decision because I knew the opportunity for her and my healthy active life were both fleeting. A bad combination when not prepared to do battle with the retirement mortality creep. It made me see how this slow unconscious reaction to the realization of leveraging my limited time to the fullest vs the chance of living a lot longer needing me to throttle myself now. One thing I certainly now understand, this creep sure cramps my mojo.

Mortality awareness can unnecessarily drive us to both take and avoid risk.

I wrote recently how I have been dealing with a spending problem. The problem of good savers being lousy retirement spenders. I even pledged to do better with YOLO opportunities before it’s too late. Even with that spending issue already mentally recognized, it still subconsciously played a part in how my latest fail went down. It shows me that it isn’t easy and takes more effort. 

It’s a mindwarp of mixed messages. 

  • Don’t spend too much because you or your spouse might live to age 100 and outlive your money. 
  • Don’t be a miser and miss out on living. Time is spent and can’t be bought back. 

I have no problems living a frugal life for all the day to day and little things. I’ve never struggled or regret any of that. The problem is when I really want to take rare opportunities to live large and make a big one-time purchase that bounces off of an overall portfolio strategy. Giving voice to the other side, you might need it as an old human. 

What This Latest Go Around With The Creep Has Taught Me

I think this latest battle between living life to the fullest vs being responsible with spending at all costs is that I tend to lean toward the safest route. Sure, I want to be the adventurous fun seeking freak, but it is hard for me to jump in without first thoroughly testing the waters. 

I need to remind myself of this Tony Robbins quote: “People will do more to avoid pain than they will do to gain pleasure.”  Just a little something to throw back at the creep and counter my safer route tendencies.

It’s easy to say embrace life. But even when knowing that life and health are fleeting, responsibility and respect for unknown possibilities can cause us to flinch. I wish I knew the answer or formula to balancing the retirement mortality creep’s mixed messaging. Especially for those like myself that tend to lean towards always taking the safe and risk averse approach. I think we all have to work that out for ourselves. But I am going to start by asking myself a couple of things.

Is it following a true interest or passion?

There is value in spending our limited time pursuing our interests and passions. Doing things that make us tick, even when it might cost us a little financially. The criteria it must meet is that It’s something that will bring pleasure into life.

Will it provide a great experience and worthwhile memories without causing long-term financial damage?

In the end it’s our pleasurable memories we appreciate. They keep us going and remind us we are alive. The dream car could have certainly done that for me. The trick is doing all that we can to make sure it isn’t a nightmare scenario we’re entering into. One that spends too much money or time in areas we can’t or wish to no longer tolerate. 

Can it be considered an investment? 

Not purely financially, but personally through the experience. Taking the family on a vacation could be viewed as an investment in the relationships. One time purchases like my recent car fail, I would have invested in myself and scratched an itch that occupies space on the bucket list. It could have added some fun to my retirement hobby. The car may or may not be a financial investment. But it would never be a total loss if later sold and well worth the experience.  

Is there a practical exit strategy if it goes wrong?

I made a living as an engineer countering all possible failure scenarios. This kind of thing shouldn’t be any different. If I were to enter into a situation where it later didn’t meet retirement financial, lifestyle, and passion needs, then I need to have set those exit indicators and have a plan to fix or walk away from it. 

 

Will I ever lose out to the retirement mortality creep in the future? Probably. I am as mistake prone as anyone else and can take the wrong creep argument for or against doing something new or different. I just need to learn something from it with every encounter. 

Deciding to stretch and explore new areas to live life to fullest during our ever shortening time frame means there will always be unknowns. But you won’t know for sure until you research and try. Turning dreams into reality is always an exciting and sometimes risky move. Like deciding to retire early. Which sure has been a successful investment in life’s precious and limited time. 

FIRE Transition Alert: Good Savers Are Lousy Retirement Spenders

Budgeting, Early Retirement Lifestyle,

One of the hardest retirement transitions that I encountered wasn’t a loss of work identity or social isolation. Yes, I did work through some of that but those were rather quick and manageable. Here’s the thing that threw me harder- good savers are lousy retirement spenders. It has been the bigger and longer lasting FIRE transition. I still occasionally struggle with it, even after 11 years into my early retirement.

FIRE Transition Alert: Good Savers Are Lousy Retirement Spenders

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Good Savers To Lousy Retirement Spenders

Having been a successful saver and now lousy retirement spenders is certainly a fortunate problem to overcome. Especially when a Fidelity Retirement Savings Assessment found 46% of American households are at risk of not being able to cover essential expenses in retirement. The whole reason we saved as well as we did was for a better future. Sure, when it comes to spending there are all the numbers that must be respected. But then there’s the nagging mental side of things when making this retirement spending transition regardless of how good the numbers look. 

Frugal Living Got Us Here 

There’s nothing extreme about our early retirement story. Everyone has to define their own livable frugality to meet their financial goals. For our family’s frugality, we never feel like we live a deprived life. But we also don’t enjoy spending money thoughtlessly. There will always be needs, wants, and nice to haves in life. 

During the FIRE journey we were really good at sticking to what we defined as our frugal budget. It focused on our needs and only what brought true happiness to our family. A game that was hard won in the face of all the consumerist temptations and social pressures to fit in. 

As hard as it was to create what became good frugal living habits, once the game is won and numbers look great it’s just as hard to draw against savings and decide to spend a little more. Maybe enjoy some wants and “nice to have or do” things that were long set aside. We found early in our retirement tendencies to even scale down spending on things long considered part of our budget. 

The Balance Between The Retirement Budget and Covering For Longevity

A new mental spending boogaloo started to rise up several years into our early retirement. Aging adds new dimensions that I really didn’t fully appreciate in my youthful retirement planning and early retirement living. The realized reality is that our retirement portfolio and spending is a lifelong dance with changing music and tempos. I’ve already found that out as I get older. Life’s tempo does start to slow down. Aging adds new dimensions long before what we consider old age. 

Like most people, my retirement planning was more focused on the portfolio financial swings that came with market volatility, future projections, and possible inflation.

There was motivation to get out of the rat race early but I should’ve also had a higher focus on the diminishing years to play on the planet. There’s a high value associated with youth and health that is often missed in our calculations. I was doing everything right to stay fit and healthy. That might have influenced my thinking. I didn’t fully allow myself to focus on the likely future negative age related health issues that could surprisingly appear and disrupt my perfect retirement plan. 

Good retirement calculator scores help settle a retiree’s spending-troubled mind. But we just don’t really know how long we’ll be on this world and under what health conditions. I think that’s the monkey wrench in the mental works for triggering most of the lousy retirement spenders syndrome. Even without fully thinking about it, it’s always there: The fear of outliving our money, which of course is a worthy concern. It just has to be reasonable and balanced with living a purposeful retirement life, not a financially fearful one. 

My wife and I have already experienced a couple of unexpected health scares, which adds to this reluctant retiree spender mix.

These came before we reached the traditional early retirement age of 62. There’s the highly probable cost of covering future unknown but inevitable medical issues. I will admit, it took our medical scares to wake us up. All of a sudden our focus was forced to change. Now we truly realize there needs to be a balance between having enough to pay for what comes but also put a value on how we really want to spend the healthy time we do have left. 

How We Overcome Lousy Retirement Spending Syndrome

Old spending habits die hard. 

It takes time to transition from saver to spender. For us it had been a far more gradual transition over time. Regardless of how good calculated financial results looked, we knew there was little headroom with our less than million dollar portfolio and we needed to slowly and cautiously test them first. It took us seeing reality based results bounce against the simulations. Now eleven years into early retirement it appears any past financial anorexia on our part was for not. The numbers held up better than expected, even with surprises like rising healthcare costs.

My takeaway: Give yourself the time to make the retirement spender transition.

Track and test as necessary. But there’s wasted time in worrying or cutting back beyond the budget that got you to retirement or cutting the retirement budget numbers used in your retirement financial calculations. Trust in your ability to recognize any problems. Be flexible enough to counter them.

Updated our spending quotient.

To get to early retirement our spending was always done with purpose. We spent on needs and only what added real happiness to our family’s life without fluff and waste. Now we’ve also added to our spending quotient the permission to allow for spending to reduce stress or simplify life. 

Previously in my younger form if it was something I could do myself I wasn’t going to pay someone else to do it. I still struggle with this issue. But there are things I’ve always hated doing even though I’m fully capable of doing it. Life is much better letting go and paying for qualified professional tasks that need to be done. 

My takeaway: Doing full due diligence with cost comparisons and client reviews when applicable will satisfy frugal financial tendencies.

That’s what helps with mentally accepting this form of spending. 

Spending on unique experiences, each time might be the last time.

We have kids and grandkids. I remember my grandparents but it’s limited to visits with a lot of quiet chatter and sitting around waiting for mom and dad to say it’s time to go. That’s also the subject of every old photo I look through. There are no special experiences to remember them by. We’ve tried our best to be part of our adult kids and our grandkids lives. We’ve found that spending a little more on experiences with them is a whole new level of joy in our retirement.

Building memories of shared vacations and spending on experiences now with them instead of worrying about leaving more behind when we ditch this world makes for a more satisfying retirement. All of those opportunities evaporated during the pandemic and now with vaccinations and reopening of life, we look forward to returning to this big part of our retirement happiness.

My takeaway: We remember how hard it was for us when our kids were young and we didn’t have the resources or money to do a lot of things.

From vacations to simply babysitting. Doing things now that makes their lives easier while the grandkids are still kids makes for our happy retirement and will hopefully be remembered. Budgeting for and mentally opening up some of our spending so we can offer to do things with them that they might not normally be able to do spreads that joy across our family. 

YOLO with a twist.

Falling into the “You Only Live Once” thought process is usually a sign of overspending and poor financial decisions. Certainly a financial curse to many and something that must be tamed when tapped. But if there’s ever a time to recognize some of the wisdom within YOLO it’s when you have had a close call or are otherwise finally made fully aware that there’s an eventual end date.

As the years tick off, any unchecked bucket list items need to be seriously addressed or just scratched off. It’s not even about how long we will live. It’s about how long we will be fit and healthy enough to accomplish them. All of course with respect to budget and portfolio constraints. My misstep was allowing spending reluctance to overtake any other thoughts.

My takeaway: There are things I missed an opportunity to do because I didn’t get off my keister earlier to make them happen.

Missed opportunities that I either can’t do now or even really want to do now. But I still wonder if I have missed out by not doing them because of my lousy retirement spenders syndrome when my life’s time was right to do them. I will never know. But I’ve pledged that I owe it to myself to do a better job of it going forward. 

 

Once we retire after a successful run of years saving and investing to pull it off, changing from saver to spender will mess with our minds. For my wife and I, it has been a long gradual mental adjustment over many years that still challenges us. 

Being aware and having new reasons to combat mental tendencies to unnecessarily hold retirement spending back even when the numbers support relaxing spending reluctance is the first step. Then it’s giving ourselves the time it takes to work through this transition and the permission for the occasional purposeful splurge for a better retirement life. 

How To Get the Most Out of Your Retirement

Early Retirement Lifestyle,

 

This informative post was contributed to Leisure Freak by freelance writer Sierra Powell. 

One of the most exciting and momentous times in someone’s life will come when they are finally prepared to stop working and enjoy retirement. While you will likely have to work very hard for a long time to get to this point, it is important that you continue to be diligent and find ways to ensure that you maximize this time of your life. There are several tips that you can follow that will help you to get the most out of your retirement.

How To Get the Most Out of Your Retirement

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Be Financially Prepared

One of the most important factors that can influence how well you are able to enjoy your retirement is whether you are financially prepared. All people need to make sure that they have the financial resources available to last while also having the finances to enjoy their life. This can be done through a combination of savings, social security, pensions, and other sources of income. When speaking with a financial expert pensions and other sources of income will be used to assess your ability to live the lifestyle you want in retirement. It is important that you continue to assess this in the years leading up to your retirement target date.

Have Healthy Hobbies

When you are newly retired, you may find that you suddenly have a lot more spare time to spend. While you used to spend 40 or more hours per week working and commuting, you will now have time to do what you love. It is important that you fill this time with things that you love to do but are also healthy and productive. Some great options can include playing golf or tennis, gardening, or even hiking. All of these will allow you to get outside and enjoy some fresh air.

Stay On Top of Health

A major factor that will influence your overall quality of life in retirement is how healthy you are. Your personal health is something that you need to take care of your entire life. This will include exercising regularly, eating well, and seeing a doctor from time to time. Those that are able to follow a healthy lifestyle will feel better, have more energy, and will be able to enjoy their life more.

Consider Working a Little

As you are new to the world of retirement, you may be excited to avoid working altogether. However, in the first few years, you may find that you miss the structure and relationships that are developed in a professional setting. Those that choose to do so can consider working a little bit on the side during retirement. Depending on your situation, this can include working part-time or taking on hours as a consultant. This could also help you make a little extra money on the side.

Try New Things and Meet New People

While some people think of retirement as a time to start slowing down and relaxing, it is also a time when you are generally free of responsibility and will have a lot more time. Due to this, it is a good time for you to try new things and meet new people. It would be a good idea to get involved in your local community and find ways to volunteer your time and skills. This can help you meet other people in your area that are retired as well, which will help you make more friends and enjoy your time.

See the World

An ultimate dream that a lot of people will have when they retire is to travel as much as they can. For those that have the time and financial resources, this is a great way to get the most out of your retirement. You should spend time carefully thinking about what you would like to see the most and start planning trips. There are often great travel groups that you can join that will allow you to meet other people and travel in a larger and safer group.

As you are approaching retirement, it will be time to start thinking about what you want to do the most with your time. By following these tips, you will be able to get the most out of your retirement once the time comes.

Thank you Sierra for contributing this article to Leisure Freak. Your tips offer ideas and seeds for thought beyond just the total savings number. 
freelance writer Sierra PowellAuthor Bio: Sierra Powell graduated from the University of Oklahoma with a major in Mass Communications and a minor in Writing. When she’s not writing, she loves to cook, sew, and go hiking with her dogs.

Can A Frugal Retirement Be Enjoyable? Mine is

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My choosing a frugal retirement is an enjoyable personal success. When you can’t ever see earning a 6 figure salary or having a million dollar portfolio you have to create a unique retirement solution. I chose to strategically make smart balanced adjustments and decrease our lifestyle cost which means less is needed in the bank to retire. Getting our lifestyle cost aligned with our portfolio amount where the retirement calculator said the numbers work became the goal. I’ve seen some frugal retirement naysayers, mostly from people who have never tried it. Now as I’ve already cleared a decade of early retirement I can say that my flavor of a frugal retirement lifestyle has exceeded expectations. 

Can A Frugal Retirement Be Enjoyable? Mine is

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Choosing A Frugal Retirement, What’s Not To Enjoy?

Why I looked for a workable employment liberation answer –

Retirement is constrained by how much money we have. All the talk about being able to replace 80% of our pre-retirement salary for a comfortable retirement is a tall task and I think I’ve proven that notion wrong. For many households including ours, it’s really tough to save a million dollars or more for retirement. With all I had experienced in my tech career that required a relocation, endless cycles of layoffs, reorganizations, etc., my having to survive working into my 60s or later was something I couldn’t stomach as acceptable or even viable. In 1998 at age 40 I decided that I wanted to explore early retirement options and began my 10 year early retirement plan. 

We didn’t let the million dollar portfolio barrier deter us from early retirement. That’s when frugality became the solution. But it had to be done right or not at all. If it was a joyless existence of austerity it wouldn’t be worth it. While some choose extreme frugal practices, ours was uniquely measured to fit us. 

The Fun Stuff – 

I want to clear the air up front and get past notions of a frugal retirement as sitting in a small apartment or RV with a TV as the only entertainment. While some may call that heaven, that isn’t at all close to our retirement lifestyle. We stayed in our 2 story home close to our daughter’s families and have what we call a frugal budget. It not only covers all of our living expenses, but includes our hobbies, entertainment, and much more.

Travel- 

We travel as much as we want to. Other than a Hawaiian vacation bought through Costco Travel a couple of years ago, we usually prefer budget friendly road trips. We have our go-to destinations of the Black Hills SD and southern California where we hunt for and lock-in great lodging deals ahead of time. We also travel yearly to places where we enjoy visiting and staying with extended family. All on a yearly travel budget of $3,500. If we over do something and go over one season we adjust down the next, make other budgeted adjustments, or accept any slight overrun for the year.  

Holidays-

We enjoy making the holidays merry just like anyone else. With grandkids there’s always something going on from Halloween to New Years. We have a $1,500 holiday budget that covers family outings, celebrations, and gifts. 

Dining Out-

We dine out on occasion but we aren’t hooked on going out to eat a lot. In fact, by the time we return from a vacation we get pretty tired of restaurant dining. We do dine out for special occasions and typically try to use a promotional discount or coupon of some kind. I happily admit to useing our advancing age to our advantage and get senior discounts when available. Dining out comes out of my misc budget which also covers other random household, automotive, unplanned but expected non-fixed monthly spending. 

Activities-

When you look you find all kinds of free activities and events. The only cost is getting there and what you spend once you are there. Food trucks and beer vendors are always around. We go with a $40 cash budget in mind for events and it comes out of my misc budget. It’s always easy to stick to. We typically go to events to enjoy the venue, not load up on expensive food or drink. We have a habit of going with a beverage in hand to start things off and have already eaten a meal. I do love a good draft beer and that is always a budget challenger while attending events. 

Coffee Shop-

Every frugal person goes on about ditching the lattes. I do enjoy a good cup of drip coffee or an Americano and frequent an independent coffee shop in my town. It also serves as my daily social outlet. I have gotten to know many people in my town there and have been able to greatly expand my social circle beyond what had only included work peers before retirement. I have a $40 a week petty cash, aka pocket money allowance in the budget that covers this and everything else that’s a small random purchase during the week. 

Movies and TV Entertainment-

We cut the cord years ago and not sending that bill in every month still puts a grin on my face. I installed an attic type antena and used the existing coax cables running through the house to hook up our TVs on every floor that had cable before. Between over the air and online streaming with a Roku or Chromecast dongle we get all the programming we want. For movies we checkout free DVDs from our local library or use a standard $13 a month Netflix.  

Hobbies-

We do have hobbies in retirement. My biggest is an automotive hobby. Although that can be expensive if buying cars, my oldie has been with me since 1993. The hobby cost comes from the events I attend. Like other events, I set a cash budget. Any out of town events are aligned with planned vacations. Car maintenance comes out of my monthly misc budget. I did have a 21 year old Corvette that I gave up this year for a fun but rationally more practical all-season any weather or road condition convertible Wrangler. The difference between the two in the purchase amount was outside our 2020 budget and will be listed as a one time charge off. I had just survived a serious health scare and was ready for a change. It was also about a 45 year bucket list item I wanted to scratch off and it only happened because we had the extra funds to do it. Our frugal retirement allows for the occasional splurge.

Cell Service-

I see people spending way too much for their cell plans. I still use an old $100 a year pay as you go flip phone plan that I never use up all my prepaid account balance. One that brings a laugh from people around me every time I take a call. My wife uses an iPhone on a $10 low cost cell and data plan. We can live frugally and still stay connected to the world as much as we want to. 

Day to Day Lifestyle Cost and Spending-

What we did was push against our frugality threshold. When we went too far we backed off. The idea was to cut costs that didn’t have real happiness values and do so without feeling deprived. As opportunities to improve our frugality came we took them. There are many frugal living decisions we can make. There are just as many frugal living tips to put into practice. We embrace purposeful spending. Seldom is anything bought on whim without thinking first about whether we really need it, getting it will add something positive to our lifestyle, or if we decide to get it, getting it for a better price. We also won’t just settle for cheap. A needed quality product that may cost a little more but will last and do what it is supposed to do is what we target. 

Our 2020 Retirement Budget Numbers

We do not live in a low cost area of the US and live in the house we raised our 3 kids in. The last report I found of the median household income where I live is $121,000 and it’s most likely higher than that today. As almost everywhere else, based on the cars I see in the driveways and the cost of some of the housing around here, most people are living paycheck to paycheck. Here’s a peek at our retirement lifestyle budget figures for 2020. It’s based on the previous year and adjusted when necessary like once we see actual property tax assessments, insurance increases, etc. This should give an idea of what our definition of a frugal retirement that’s sustainable, enjoyable, and that works for us: 

  • Utilities: Water/Sewer/Power/Natural Gas/DSL/Cell/Netflix – $3,500
  • Insurance: HomeOwners/Umbrella/Autos – $4,400
  • Home Property Tax – $2,800
  • Healthcare Insurance: Medical/Dental –  $15,990
  • Out of Pocket Healthcare/Predeductible) – $4,000 max
  • Petty/Pocket Cash – $1,960
  • Misc: Repairs/Maintenance/Dining/Purchases/Gas/etc. – $9,000
  • Grocery/Toiletries/Cleaning Supplies/etc.- $10,400
  • Travel – $3,500
  • Holidays/Christmas – $1,500
  • Federal/State Income Taxes – $3,500

Total yearly budget $60,550

Will we be on budget for 2020? 

We will come in under budget this year. We are not traveling during the pandemic nor having family celebrations as normal. Events have all been a no go. Some things at the grocery store cost more but other expenses have all but disappeared. Just because we have a budget doesn’t mean we have to push against it. Hoping 2021 is a little closer to normal.

Are you thinking that our retirement budget isn’t very frugal?

There are plenty of frugal living stories of those living an enjoyable life spending less than we do. I love reading about what other people do and get great ideas but I don’t compete in frugality games. Here’s why I feel confident about considering our retirement lifestyle as frugal.

  • Our retirement lifestyle budget is just under 50% of our town’s median household income. We get to live here and enjoy all that it offers at a discounted price.
  • That 2020 budget figure comes in at 42% of our actual, not inflation adjusted 2009 household joint tax return AGI. That AGI was eleven years ago when I retired. Sure beats that 80% pre-retirement salary recommendation some experts throw around. 
  • Our yearly budget is the equivalent of us both earning $15 an hour at a full time job. An amount recommended as a dignified minimum wage.
  • When looking at the budget breakdown, our living expenses are fairly low at nearly $40K if it weren’t for ridiculously high healthcare costs. Health insurance and its associated out of pocket represents a full third of the total budget. In 3 years we will see a big part of that cost decrease when we are Medicare eligible. That along with my eventual Social Security that will also reduce our IRA withdrawals, lowering our taxable income for less income taxes.

Frugality Is Personal, Make Sure You Can Enjoy Yourself

We have been more frugal in the past when we needed to be and we still make adjustments to stay in our frugal living sweet spot. Our frugality isn’t defined by anyone else’s definition of frugal living. It’s based on what makes sense to us while still meeting our financial sustainability goals. All of this became the model for our frugal retirement lifestyle. What’s not to enjoy about that? 

I won’t nor can tell anyone what they should cut to live a sustainable and enjoyable frugal lifestyle. That has to be figured out by each individual and their unique circumstances. Everyone’s frugality threshold is different. Living a life feeling deprived is not an enjoyable way to live if you can do something about it. 

I want to give a shout out and a thanks to Feedspot’s top 10 frugal retirement sites that rated Leisure Freak at number five for 2020. Check out their list if you want to find sites that can provide ideas for successfully living your own frugal retirement lifestyle. 

Six Tips for Pursuing Homesteading in Retirement

Early Retirement Lifestyle, Relocating in Retirement,

Homesteading in retirement

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Homesteading makes an excellent hobby, no matter your age. But for retirees, it offers a perfect opportunity to slow down, connect with friends and family, and enjoy a sprawling property instead of spending your golden years in a stuffy condo. Here are six tips you need to know to make the most of your homesteading experience.

   1. Plan Early (And Revisit Often)

Knowing where you want to be in five years is essential no matter your age. But when you’re approaching retirement, it’s even more crucial. Planning for your homestead years in advance is a smart way to approach this significant life change.

Of course, a conventional retirement at age 67 (or older) may not be for you – and that’s understandable. For advice on retiring early, visit Leisure Freak for expert opinions and perspective. You might find that your dream of retiring to a homestead in your younger years is more realistic than you expected.

   2. Choose the Right Size Home

Downsizing is a common trend among seniors these days. But that doesn’t mean you have to follow the crowd. Many retirees are also “rightsizing,” a housing trend where they choose the property type and size that’s right for their future.

With homesteading, ensuring you have room for your hobbies and passions is more important than a square footage measurement. Selecting an amount of acreage involves knowing what you plan to grow (or raise), too. Estimates range from three acres to 13 or more – all depending on the type of animals, crops, and house you want.

   3. Know Your Home Loans

Perhaps you’ll be cashing out retirement or pension money to land your ideal homestead. If not, you’ll need to determine how much of a payment you can afford and the available mortgage options.

For example, choosing a conventional mortgage means low costs and variable down payment options. Referencing PennyMac current rates can give you an idea of your loan’s cost, whether it’s adjustable- or fixed-rate.

   4. Recognize Your Limits

Your budget may be one limit, but your personal preferences and physical capabilities can also be a help or hindrance. You want a home you can afford, but you may not want a property that needs a lot of work.

Knowing when to enlist help with moving house is another instance when recognizing your limits is vital. Injuring yourself while moving is totally avoidable – though many retirees are reluctant to hire help. On a homestead, there may also be tasks you can’t DIY, and planning for those instances is prudent.

   5. Adjust Your Vision

When you imagine homesteading, you might picture a rustic property complete with a barn and free-range chickens. But homesteading is (and looks) different for everyone, so learning how to start depends on a variety of factors. You can even homestead while living in a city – so it’s not all about location.

Think about what you hope to accomplish while homesteading. Greater financial and economic independence may be a priority. Or time – and space – to spread out with the grandkids might top your list of must-haves.

   6. Prepare Your Finances

Financial planning is essential whether you’re aiming for retirement or a working homestead. But some financials will change once you move to your new property.

For example, as Smart Asset explains, you may qualify for a homestead tax exemption when filing your taxes. Additional deductions may apply, too, especially if you’re growing or making commercial products.

 

 Homesteading as a retiree is much different than starting out with a young family or as a single person. Fortunately, there are just as many benefits as there are drawbacks – as long as you know what to expect. With these tips, you can better prepare for the adventure before heading out.

 

This informative article was contributed for Leisure Freak readers by Bob Shannon

Bob Shannon created SeniorsMeet along with his wife, Mary. Their goal is to create an online meeting place for seniors like themselves who thrive in the community. The site offers information and resources that are helpful to seniors as well as ways to keep in touch.

 

Echoes of 2008: Will COVID-19 Change Your Retirement Plans?

Early Retirement Lifestyle, Retirement Doubt, Retirement Plan,

I’m hearing echoes of 2008 when the great recession was being fully recognized. If you are feeling angry, concerned, depressed, or worried about your coming retirement or its lifestyle, then congratulations are in order. You’re ahead of the population who have no plan and no options. I retired early just over 10 years ago and remember clearly how this can feel. The 2008 recession happened just as I hit my early retirement target. This time around the question is, will COVID-19 change your retirement plans? 

Although the financial collapse of 2008 and this pandemic both come with the tag of “unprecedented”, this is different. There are just as many unknowns and it may take years for things to appear anywhere near normal. But this worldwide event isn’t just about financial and employment turmoil hitting people and the economy. It’s also our physical health, even life and death.

Echoes of 2008: Will COVID-19 Change Your Retirement Plans?

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Should COVID-19 Change Your Retirement Plans?

It was an agonizing decision in 2008 when I decided to delay my early retirement. A delay that lasted a year. Things were still uncertain when I finally announced my retirement at the age of 51. But I was confident it was the right time to walk away. Where some of what I faced then still applies today, there are also new COVID-19 challenges to one’s retirement plan to consider. 

Employment –

The 2008 recession brought many layoffs. I began vocally angling for layoff selection so that I could collect a severance package and spearhead my retirement. They would instead choose to financially devastate other employees who needed to work and then pass all their work to me. I should have kept my eagerness to leave to myself and just under-performed. But at that time I had a misguided notion of workplace legacy that prevented me from doing that. So I used my time to continue saving and investing. I also looked for signs that the market had bottomed. That bottom happened in March 2009, but it took another 6 months for me to feel comfortable with that assumption. 

Healthcare –

Timing retirement for healthcare was crucial to my plan. I earned a retirement healthcare benefit where I could buy into the employee plan after 30 years of service. Leaving at my planned date or delaying retirement had no impact on it. I do pay a hefty price for my retirement healthcare and could save money with the ACA. But I have stayed with my old employer plan since it’s a “use it or lose it” benefit and the ACA has been under constant political threat.

Portfolio –

In the 2008 recession my portfolio took a big hit just like everyone else. I was diversified with a mix of stock and bond funds. But there was no safe haven from the recession’s crippling grip. It was depressing to finally get to my target and then watch my portfolio damaged by the recession. I kept running my numbers through a retirement calculator to build retirement funding confidence. Almost all of my retirement portfolio was in 401K, IRA, and Roth accounts. 

I had always planned on rolling my 401K and IRA funds into a SEPP 72t IRA retirement funding account to receive pre age 59 ½ penalty free distributions. While I was still on the job I would monitor the SEPP 72t calculated formula interest rate to assure distributions would meet retirement funding needs. As interest rates drop it takes much more to be tied up in the SEPP 72t IRA to get the desired retirement funding. 

Debt –

I was debt free in 2008 other than my modest mortgage. As interest rates continually dropped I used the delayed retirement time to refinance at a lower mortgage rate. The bank only saw me as someone still working for a long time employer. Not someone who was just waiting for the right moment to ditch the rat race.

The refinance lowered my monthly payment and at that time they offered no fee refinancing. The reduced mortgage payment allowed me to set aside more each month in my retirement savings as I waited for signs to pull the retirement trigger. Having a lower mortgage payment  also lowered the amount I would need each month from my portfolio once retired. 

Retirement Lifestyle – 

My job was far from flexible, I was required to be on site as a lead engineer supporting a billion dollar revenue generating operation with 24X7X365 pager obligations. I understood what I wanted to retire to, looking forward to a more flexible retirement lifestyle. I was upset about how the recession impacted those plans as much as any financial concerns. 

My plans included what I call retiring early and often. There were a lot of opportunities I wanted to pursue aligned with my interests and passions. I see retirement’s definition as the absence of NEEDING to work, not the absence of working. The timing of the recession and job retraction added challenges to that portion of my retirement plan. 

Some of my plans regarding my local community were being changed on a monthly basis. There were numerous business closures, places that I frequented and had built relationships with. Some of my more idealistic pursuits or retirement dreams were shattered with their closures. It required me to constantly change my retirement lifestyle goals and accept it as part of the flexibility I wanted to embrace.

In an environment where jobs and money are tight there are other dynamics that came into play. For example, I planned on being more free to travel. Checking travel rates during the recession showed that everything was discounted, making our travel more affordable. I’m an automotive enthusiast and it’s a big part of what I retired to. People thought the world was coming to an end in March 2009. On a panic sale I was able to purchase a car at a huge discount that I had been researching and chasing after for over 3 years. Where recession challenges presented themselves in some parts of my retirement plan others opened up.

New Pandemic Issues That Should Be Considered Within Retirement Plans

I used my early retirement delay to better position myself financially. But also just as important, to better position myself mentally for the new landscape that I would be retiring in. There are parallels with what’s happening now. But answering the question today, should COVID-19 change your retirement plans, has different nuances worth considering.

Safety –

COVID-19 is highly infectious and dangerous. I didn’t have to worry during the 2008 recession that staying on the job could kill me. When looking at the public who are now out and about, there is a high percentage who don’t take COVID-19 seriously. I have to believe that will be likewise in the workplace once it opens up. If I felt my work environment wasn’t safe I would have done things differently than I did when it came to my retirement delay decision. 

This safety issue is also paramount to retirement lifestyle plans. Just going out to the grocery and recreation, let alone travel, carries health risks. Finances aside, if I was able to ride this out with a work from home position I certainly would again delay retirement. For the already retired like myself, this atmosphere today is nothing like my pre-COVID-19 retirement lifestyle. I was amused to read that some felt this has been a taste of early retirement. But I see little difference to what one’s restricted lifestyle would be today after pulling the retirement trigger or working safely from home in this environment. Except for delaying retirement and working from home offers the opportunity to safely live this pandemic restricted lifestyle with a paycheck. 

Opportunity –

Do you even have a choice to stay on the job longer until things pan out? So many people are already being cut loose and collecting unemployment benefits and stimulus. If in this boat, I would think keeping my mouth shut about retirement plans, collecting unemployment, and looking for non-existent equivalent jobs as long as possible would be the strategy to use in this pandemic restricted environment. Even if that meant using some retirement savings to subsidize unemployment benefits until they run out. Only then quietly officially retiring.

If still working, then another reason to maybe keep quiet about retirement plans is there might be recessionary cutbacks in business going forward. This reduced business environment may last a while. Some companies may offer retirement incentives or packages to reduce employee headcount. If you are on the fence it may benefit you to wait and see what happens.

Pandemic Portfolio –

Diversification still matters. I found at the pandemic market’s lowest point in March 2020 that my recession hardened portfolio suffered far less than the S&P 500, DOW, or popular all stock market index funds. Thankfully the market has recovered a bit since that low. But as we’ve witnessed, the slightest hint of coronavirus economic bad news roils the market. That said, during this no end in sight pandemic until a vaccine is available world, I believe in having a sufficient cash bucket within my portfolio. No telling if that recent market floor will be breached and it being long lasting. 

My early retirement story is nothing spectacular and 10 years into it I’m still not old enough for Social Security. But if today I was under age 59 ½ relying on the same early retirement strategy as I was in 2008 then I’d be in real trouble. When looking at today’s super deflated 72t calculated interest rates, it would be difficult for all but those retiring early with million dollar IRA portfolios to rely primarily on a SEPP 72t strategy. Interest rates will have to rise before that can be a viable early retirement strategy for most people today.

Social Life – 

With this pandemic we have all now seen how isolation feels. Along with asking yourself, should COVID-19 change your retirement plans, we all need to ask how we plan to stay engaged in a world pandemic environment. Many people find out at retirement that our social life for the most part revolves around our work. It took me a lot of concentrated effort to expand my social circle beyond work after I retired. I see that everything I did to grow my social network when I first retired would be near impossible to do in this pandemic environment. 

It’s very important when deciding whether to retire now or delay to consider social engagement. If you’ve already built a large local non-work related social circle then this won’t be a major consideration. But if your social life relies on your work pals, I can say from experience that work friends can quickly fall away after retirement. The dynamic of our shared workplace experience ends and that primary bond breaks once we retire. 

We Have To Navigate the Circumstances

This pandemic has not only challenged many retirement plans financially, it has also disrupted retirement lifestyle plans. In the end, a successful retirement is more than just the numbers. What we retire to is just as important to consider in our plan. To avoid retirement regret and second guessing we also need to retire with confidence. That takes looking at all angles using what we know today and what we can logically assume going forward. 

Would my leaving on my long planned for target retirement date in 2008 have caused early retirement failure? I will never know. I do know that other than giving up a year of retirement freedom, my delay didn’t hurt me. It gave me time to get over the shock of an unprecedented world event and time to dig in mentally to what I really wanted. 

I had worked very hard to meet a 10 year early retirement plan. But instead of retiring on a predetermined date, I retired when it was the right time to retire given current unprecedented circumstances. What matters is that I successfully overcame recession related challenges and met all of my early retirement lifestyle desires.

It’s Up To You To Answer The Question

Should COVID-19 change your retirement plans? If you are among the fortunate to have any say in the matter, take your time and look at all the angles before deciding. Explore ways to leverage any opportunity to better your situation. Then jump in with both feet and feel confident in your decision. 

Busted! When The Cloak Of Stealth Wealth Malfunctions

Automotive Hobby, Early Retirement Lifestyle, Non-financial Aspects of retirement, , ,

I never earned enough to build a giant portfolio but I still consider myself wealthy. I’m wealthy in the way that I can fund my early retirement lifestyle without NEEDING to work. That said, I purposely try not to appear wealthy. I’ve never been into status and my lifestyle is exactly aligned with the chosen socioeconomic level that I want to be in. But what do you do when your cloak of stealth wealth malfunctions? I made a small mistake that caused a crack in my financial cloaking. It caused questions within my social circle and within myself. 

Busted! When The Cloak Of Stealth Wealth Malfunctions

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Encountering Stealth Wealth Malfunctions

Stealth wealth malfunctions don’t have to be anything major to reveal one’s financial standing or challenge one’s chosen perceived standing. Retiring young already provides its share of social mystery. My stealth wealth deviation challenged perceptions and renewed long sidelined questions. 

It all started when I did something with nothing but joy in my heart. I decided to knock a longtime item off of my bucket list. Something others might consider silly, but one aligned with one of my lifetime hobbies. 

All it took was showing up in a new vehicle.

Yes, I bought a new car. Something that couldn’t be hidden nor did I want to hide it. I’m an automotive enthusiast and my car hobby is a big part of my retirement. I decided it was time to move on from my 21 year old Corvette that I’ve driven for 11 years and went to a new 2019 Jeep Wrangler 2 door Sport that was greatly discounted after the new year. I’ve always wanted to have a Jeep like this since experiences one summer with a CJ5 as a teenager. 

It was a “someday I want to” bucket list thing. 

To me it’s simple, it’s a convertible sports car that’s fun to drive in any season. Road conditions, what road conditions! Obviously it’s not a sports car like any of my past old Corvettes. But then again my driving desires dropped far below their performance capabilities long ago. Jeeps are common where I live in Colorado. In 2019 our last snow storm was the end of May and the first one in early October. Owning one is hardly a revelation of opulence. Mine’s even a stripped down model with manual windows and locks, just as I wanted. 

My automotive choices and hobby are well known and when I pulled up in it at my favorite coffee shop/craft beer purveyor I was stoked to talk about it. It took little time for that to happen because everyone knows that I have been driving the same old cars for years, for some of them even decades.

Where my stealth wealth sin occurred is in the way I answered the question: What’s your payment? 

Without thinking I just said, zero, I paid cash. That was instantly met with the snarky reply, it must be nice. Those who were within ear shot quickly jumped into the conversation. Look what Tommy just wrote a check for. When are you buying the next round of drinks for everyone here? They were obviously kidding me, or were they?

I innocently made a simple mindless slip. While I was successfully and happily living my lifestyle using stealth wealth practices, I was unaware that I’m in a perceived income zone with a financial status below the capability of paying cash for a new car. 

Whether or not in the overall scheme of things it even matters much to them, it mattered to me. 

Surprisingly, I found this unsettling. I’m someone who prides himself on not caring what others think about me. Especially those who flaunt their wealth and title. For them I go out of my way to let them know I dropped out of the rat race and retired early with just enough. Purposely choosing employment liberation over being a financially desperate servant to the system. But with this new slip-up within my chosen socioeconomic level I now felt like I might have messed up and revealed more about me than I comfortably wanted to. 

I enjoy being part of the socioeconomic groove I chose and am perceived part of. 

People accepted that I have enough to live on a budget and not need to work. I’ve preached my personal finance FIRE beliefs and was considered as being one of them, watching my dollars and making it all work out. But a new question will now have to be answered: Is it acceptable that I can make a cash purchase like this too? In my stealth wealth efforts I missed this aspect. This is the first time since FIRE that I broke character.

What I Did Right 

My Chosen Income Zone

We live in a moderate cost area where the median household income is $121K. I am sure that the published figure I’m using here is actually lower than what is current. Still, our overall household budget today comes in less than half this amount. It’s only that high because it includes the $20K a year I pay for our health insurance and associated out of pocket expenses. That is my chosen stealth wealth zone. It matches perfectly with the majority of my social circle. I enjoy frugal living and that includes free activities that most of my social circle are part of. What I did right is choosing an income zone where I never have to fake it to fit in or live the lifestyle I want to live. 

Don’t Drive Status Cars

Although I love cars and could have expensive rides, I instead have a few old purpose driven autos. When I say old, my daily driver (weather permitting) is a 1981 Toyota SR5 truck. I bought it in 1993 and my then 12 year old son and I customized it by turning it into a hardtop convertible. All of my cars together, including the Corvette, would add up to be worth $20K. 

Although the Jeep is new and raises my overall auto net-worth, it’s hardly unique or a status car and is less expensive than most newer autos on the road. 

Dress For The Income Zone I Want To Be Seen In

I prefer casual attire and that fits right in where I’m happiest. No expensive clothes, shoes, cell phones, or watches. I dress like the group I want to be part of and is representative of the way I prefer to live. 

Don’t Brag

I never self promote or brag about anything. I stick to my budget living the way I want to live and practice what I preach. I’m humble when talking about finances with anyone. Although my portfolio’s size is nothing like most FIRE aficionados, I keep it private and avoid talking about what I have. I know it’s most likely more than the majority of people in my chosen income zone.

Share and Encourage

I’ve a habit of talking about personal finances and share the common good practices that I’ve used to retire early. I use my early retirement story to encourage others that they could make it their goal too. I also volunteer in the community because I not only want to be part of my chosen social income zone, I really enjoy it and want to give back too. 

What I Did Wrong

I Got Too Comfortable With My Financial Freedom and Capability

It’s one thing to live in the perfect stealth wealth income zone that’s aligned with your budget, but another to underestimate onetime visible moves that challenges it. If we were a true $60K a year household living here, could we have been able to do this? Most of my social circle are local folks who fall below the median household income levels. While some who commute into the city for professional occupations earn more, many work and live in town where earning a $40K salary with benefits is a big accomplishment. For most people, paying cash for a brand new car even with a trade-in isn’t possible.

My Answer Was Short and To The Point Without Showing Pain

Although it wasn’t my intention, my answer that I paid cash could be seen as hubris or bragging. In a way, rubbing their nose in it that I can do this, when they probably can’t. My actual answer should have shown a sign of ordinary financial pain or sacrifice in making the decision to pay cash for it. It came across as being easier than it actually was. I was caught off guard and cut off by the snarky reply and the subsequent comments because I hadn’t thought enough about this aspect.   

What Now, The Cat’s Out Of The Bag

I’m happy to report that all is well. As the ribbing commenced one of the group came up and put their hand on my shoulder saying, I knew you would buy a Wrangler. You’ve only been asking me questions about mine for over a year. We should be buying your drink because you’re probably broke now.

That snapped me out of my malfunctioning fog. I was able then to say, I took some market profits earlier and was waiting for a great deal. I had just enough cash with my Corvette to pull it off with its discounted price. It’s something from my bucket list and after my recent health scare I had to ask myself, if not now, when? Best of all, it was all true.

All was forgiven. No, not by them, but myself. 

In the end they really didn’t care one way or another. It was all me. This malfunction only lasted a short time. But it stuck with me how I felt guilty about how it might have looked or came across. I care about these people and our relationships. I know and will never forget the struggle of trying to get by to make ends meet.

It’s just another mental issue of my early retirement to learn from. I grew up low income, raised a family, made it to engineer, cut living expenses, and invested until I had just enough. Then pulling the plug young while I was still on top and just walked away. Something I’m proud of but realize I had some luck to have pulled off. My brain decided to remind me of that. 

In my new ride exuberance I slipped up and was caught off guard. I said something in a way that should have immediately included the additional conversation. It didn’t matter that I stayed within my personal finance rules of which I also eventually included in extended conversations:

  • Only buying what I can afford to pay cash for. 
  • Doing all the research and clearly making sure it’s something that will add happiness to my life. 
  • Finally, if I’m going to do it, get the best deal I can. 
What else can I say about my stealth wealth malfunctions? 

I had done such a great job of living within my stealth wealth practices that my stepping out of character with this purchase messed with me. Early retirement continues to be an adventure in more ways than one. Just when you think everything seems figured out, something comes up to surprise you. Even after 10 years in early retirement I’m still learning new things.

Budget-Friendly Resolutions To Better Yourself

Budgeting, Early Retirement Lifestyle, ,

It seems that New Year’s resolutions tend to be centered around ways to make yourself healthier, a better person, or how to save yourself money in the upcoming year. The truth is: this isn’t something that just feels common; the most popular resolutions actually center around one of these themes of health, self-care, or budgeting.  

The best news is that you don’t have to overwhelm yourself with new tasks to complete all year round to try to make a better life for yourself. There are ways you can be healthy, practice self-care, and be eco-friendly all while saving yourself money. 

Budget-Friendly Resolutions To Better Yourself

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Making eco-friendly changes

This year, strive to make changes that will help you and the environment. Being retired, you have more time to focus on things that really matter, like making the planet a better place so it makes sense for your resolutions to not just be focused on yourself. I am sharing some eco-friendly changes to make to your lifestyle that can actually save you money too! 

Reusable water bottles – If you are still using single-use plastic water bottles, 2020 is your time to make a change. Reusable bottles are a great investment. They may be a pricier one-time payment, but they can prevent you from spending money on water bottles and wasting plastic every week for years to come. 

Contact lenses – You may think that something as small as your contact lenses wouldn’t matter. However, just like water bottles, you have to think about how the small amount of plastic you use daily can add up quickly. Switch your contact lenses to a brand that uses less plastic and is affordable! You can’t go wrong.

Clothing – There are even ways to be conscious of the environment with your clothing. Shop from sustainable brands that source their materials naturally and ethically, as well as brands that are mindful of their carbon footprint and employee treatment. To save yourself even more money, you can shop second-hand. Thrift stores are a good way to save money on clothes while giving a second life to clothing that others no longer wanted.

Budget-friendly health changes

Being retired means there is more time to do things you enjoy – and it’s a plus if any of those things include exercising and being active. Oftentimes, people waste money on gym memberships they don’t use or seek out classes and don’t end up enjoying them. Fortunately, there are alternatives to these typical go-tos! Make better use of your funds and keep yourself motivated by doing things you actually have fun doing. If you like tennis or golf, then you should do those things to get your daily exercise in if that’s your plan for the new year. 

Another option is to invest in items for a home gym so you don’t have to leave your home to get a good exercise into your day. Simply dumbbells, yoga mats, and resistance bands can offer a great workout. However, you can take your dedication to fitness a step further this year and invest in a product like a stationary bike. There’s the top of the line exercise option the Peloton bike which can give the feel of a workout class in your home. But there are also lower cost options like the Schwinn IC3 Indoor Cycling Bike and  L Now Indoor Cycling Bike that can be purchased at a reasonable price! Both have a media shelf and if you crave that interactive workout class feel and motivation then you can still get Peloton’s classes via their app.

Make sure you’re investing your money and your time in something you enjoy doing for any health changes you consider in 2020. There is no point in spending money on a gym membership, classes, or workout equipment if you aren’t having fun while doing it! 

Self-care practices for the new year

Self-care is another practice that is important to better ourselves and is often a focus of New Year’s resolutions. The eco-friendly and health resolution ideas we’ve discussed are actually both forms of self-care in themselves – it’s important to feel good about yourself and the life choices you are making.

Budgeting – Yes, budgeting in itself is a form of self-care. Being smart with your finances can give you peace of mind, help you spend your money more wisely, and encourage you to save money for things that are important. It’s especially wise to budget around the holidays, when we tend to spend a lot of money at once. 

Be outdoors – Something as simple as being outside for 30 minutes every day has a lot of positive benefits. Whether you choose to work out, go for a walk, or just bask in the sun, be sure to get outdoors every day for a free way to boost your health and mood! 

Journaling – Writing in a journal is something that can help your mental health by expressing gratitude and working through any feelings of stress, anxiety, or depression. It can also help increase memory capacity and comprehension. Writing is a simple, free practice that many people aren’t doing on a regular basis after retiring. 

 

Health, self-care, and living a green life luckily all go hand-in-hand. If you’re looking to make a New Year’s resolution for 2020, consider some of the budget-friendly options on this list to better yourself, the planet, and the people around you too! 

My Ten Year Early Retirement Anniversary: What’s Next?

Early Retirement Lifestyle, Retire Early,

I sometimes find it hard to believe that my ten year early retirement anniversary has come. Time passing quickly is a reality of my early retirement story. Never a boring moment.  It all started on Thursday December 17, 2009 when I walked out of the only life I knew. 31 years of life working in a career that I sometimes loved and a lot of times hated. If I am honest with myself it was for the most part an abusive relationship. 

I planned and purposely saved for 10 years to retire at the young age of 50. 

Then just as my FIRE goals were met a devastating recession struck. It felt like a sign from the almighty that I must remain in employment bondage, a feeling that fed once conquered early retirement fears. So I hesitated going forward with my escape plans as asset values across the board began their long drop with no end in sight. 

I stayed on the job.

I basically retreated back into the arms of my abuser and continued putting money away into what seemed like a black hole. It took another year before there were signs that the financial freefall had ended and a bottom found. A year that included weekly layoffs and piling ever more work obligations on the survivors. Oh how I begged for layoff and a sweet severance package, but always denied. Nope, I was destined to remain their beast of burden.

Signs it was time to go.

It was what happened in a management staff meeting that pushed me to conclude it was time. Just another in a long line of asinine comments from the CEO and new financial insults for the non-executive class. Recession or not, I just couldn’t serve under those overpaid bullying assclowns and delay my freedom plans any longer. So after a year delay I pulled the trigger at the age of 51, regardless of the recession’s end not yet being called. 

I celebrate this anniversary because retiring early and walking away towards freedom is one of the best decisions of my life. 

My Ten Year Early Retirement Anniversary: What’s Next?

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My Ten Year Early Retirement Anniversary: Reflections of this adventure and what’s next

Minute 1: Walking Out Of The Door For The Last Time

Freedom at last, it was finally over. I could feel a weight being lifted off of my shoulders. I don’t think my situation is much different than anyone else who has been in a professional non-executive position for a long time. Your company relies more and more on you to support important but unshiny legacy operations. Things they can’t seem to value when it comes to salary but lose their minds when there are problems or delays. All the crap that’s difficult to recruit and keep new people to do. 

In my case that included a 24X7X365 tethering by pager. I get it, that’s business and we do it or get canned. It’s a devil’s bargain. But that damn pager interrupted my life day and night through holidays, vacations, and weekends. Even when it never screamed. It had a mental weight of 100 pounds and demanded that it always be accommodated. 

Then there was this, something that drove me to this huge milestone- There was so much more I wanted to learn about and do in my life. I felt employment liberation as I walked to my car and drove away into winter’s early sunset.

The Decompression From A Career Mindset 

It takes time to detox from the corporate world. Retirement  can be a mind warp after spending a lifetime in a system of career obligation with only little breaks allowed. I thought I had it figured out. But the system of education and work is so good at conditioning us to be productive first, personal life second, that it took time to shed it. A few weeks in and I was happily enjoying the freedom to do what I wanted to do or do nothing at all without feeling guilty about it. 

That opened the door to my reinvention by replacing living productive as defined by my career mindset to instead living with purpose as defined by my interests and passions, no matter how silly or serious they were. Although I had always believed that I would be open to working in retirement under my terms, I used every minute of 5 months off to fully reset my brain before accepting an opportunity. 

Expanding My Social Circle

At the time of my retirement I had lived in my town for 13+ years and I didn’t really know anyone very well. My social circle was 99% work related. Saying that now sounds sad, but it’s true for many people. So I made working on my social circle a top priority. I uncomfortably opened myself up and pushed myself to be more social. It started by frequenting a locally owned coffee shop that I used to only visit on weekends with my son years before. It became my social outlet and is where I’ve made many new good friends in town. 

I also took advantage of opportunities to take free classes offered through the library, town, or local businesses and had a blast signing up to volunteer around town. Volunteer opportunities that ranged from single track hiking/mountain biking trail maintenance to pulling beer tap handles at town sponsored events. 10 years later and I still volunteer.

Making new friends and increasing our social life is something that adds happiness to anyone’s retirement. Looking back at this time of my ten year early retirement anniversary, expanding my social circle and being more connected to my community are my most valued retirement accomplishments. 

Embracing The Retirement Definition- It’s The Absence Of NEEDING To Work, Not The Absence Of Working

I have had fun and learned a lot doing my retirement gigs. They were much more enjoyable than my first career. The first opportunity was very close to home in a smaller company working in a field I had long wanted to learn about. It had far lower responsibilities than my first career which was great as a retiree to step back and just enjoy the ride. It was my first taste of working while retired on my terms regardless of money.

Then came my encore career. Another field and industry I had an interest in learning and experiencing. It actually paid more than my first long-time career which allowed me to do something I had never planned to do, clear my modest mortgage. 

Through it all I saved and invested all earnings from my paid retirement adventures. But in all cases when I learned and experienced what I wanted out of any gig or I could tell there was BS bucket deposits being made, I leave and return to retirement leisure regardless of salary. There have been a couple of other short retirement gigs during the past ten years and who knows, maybe some more in the future too.

Leisure Freak – What Started As An Internet And Website Building Lesson Turned Into A Fun Retirement Activity

While working in my encore career the younger analysts and developers always talked internet lingo. I decided I wanted to learn what it takes to build and run a website. Leisure Freak was then born. I never intended to be a blogger. In fact, I didn’t even know what a blog was.

I built Leisure Freak simply as an informational site but quickly learned the lords of search engines require blogs to build followers, backlinks, and social media feeds in order to place. I admit that I am not very good at it. There are just things I prefer not to do or worry about.

I do as much on Leisure Freak as I want. I have enjoyed my online relationships with other bloggers and have learned a lot about how the internet works. It’s amazing to see how talented people can earn a good online living if they strike gold. That’s certainly not me, I’m just happy that it pays its own way. It has been a fun ride so far. 

The Early Retirement Dream Of Travel

As far as travel goes in early retirement, everyone’s dream is different. The last thing I enjoy doing is jumping on an airplane after a decade of flying all over the country an average of a week a month during my career. We have done the fun and typical Hawaaii travel but what I have really enjoyed is road tripping. It’s budget friendly, on our timeline, and we travel as much as we want to. I do enjoy reading about other’s exoctic travels but it hasn’t been our thing, so far anyway. 

Money Reflections

I feel I should say something financial on my ten year early retirement anniversary. There are all the warnings about portfolio performance and withdrawal rate dangers during the first ten years of retirement. How what happens during those years determines long-term viability. Well, I have been receiving distributions in the 4.5% range from my portfolio since day one to fund my lifestyle. I have also plugged all gig earnings back in when I’ve worked, never considering any paycheck as extra spending money.

During the past ten years the markets have climbed and real estate has recovered. Since I escaped back 10 years ago my net-worth is up 35% even with it paying out the funding for my early retirement lifestyle these 10 years. 

However, it’s important to note these three noteworthy points: 

  1. I did not start with a million dollar portfolio.
  2. My retirement began in the very early stages of a recession recovery. 
  3. I leveraged any earnings from my short retirement gigs. 

Just saying.

It seems to work out when setting a reasonable withdrawal rate against a diversified investment portfolio. Then just letting your planned retirement lifestyle of purposeful spending do its thing. Yes, my withdrawal rate has been higher than what most recommend. But it isn’t forever. I fully expect to receive my earned Social Security benefit. If not, then it will fall on my plan B. 

So I Hit My Ten Year Early Retirement Anniversary, What Now, What’s Next?

For the most part it is retirement as normal. I will be living and doing a lot of what I have been doing. Monitoring finances and making family, friends, health, hobbies, fun, travel, giving back, all the good stuff of life my priority. Then there is utilizing the skill of saying NO to unwelcome obligation to work, people, or anything I don’t want in my life.

But there have been some areas I’ve been thinking about going forward:

I’ve been wondering, when does early retirement end and regular retirement begin? 

I don’t know why this was something my brain latched onto and it’s silly for sure. I have come to decide that early retirement ends at age 65 when I can finally end my high health insurance payments and go on traditional retirement Medicare health insurance. What does it matter? I like saying I’m in early retirement. I see it as a badge of honor.

It’s a huge accomplishment for me. A low income kid pulls off FIRE with no connections in the corporate world or connections in other influential areas of authority. I’m a nobody and that is just fine with me. I just worked my way into middle class by doing what others didn’t want to do. All the way to stealth wealth. Well, it’s my own definition of wealth, having just enough to beat the system and walk away young while still on top. 

Time to reach out and reconnect.

Once I retired my old work pals and I had little in common anymore. It could be too that they were a little pissed about my escape. I’m sure the overlords punished the remaining by dumping my work responsibilities on them. There are yearly Christmas greetings between some of us but today I can count on one hand those from that career that I am still close with. Some have since retired themselves while others still toil. I think it’s time to reach out and reconnect with some of my old work pals. Feel it out and see if there’s anything still there. 

Forgive my corporate tormentors.

I was able to disconnect from my past corporate life in major fashion. I never looked back. That might have played into my distance with ex-coworker pals. But I do take too much pleasure in mocking and disparaging certain aspects of management and corporate culture. Especially one particular CEO, now a convicted felon. Sometimes a little anger slips in. Especially when I read or hear about some of the same BS I endured happening to others either in the corporate realm or government ranks. My wife says I have some kind of corporate world PTSD because I get triggered and feelings of the past come out. I need to work on that and forgive but not forget. I will keep the mocking. 

Evaluate and take action regarding my changing interests and passions.

There are things that I pursued during these ten years of early retirement that I see my interest and passion fading. I now feel like going in different directions on parts of it. I think that is a natural occurrence. I’ve already identified some aspects that I was once ravenous about that now feel like I have held onto longer than I should have. I need to move on. Plans are already being made. There are things to get rid of and even sell to make a clean cut to create the space, both physically and mentally for the new.  

Preparing for a changing financial picture during the next 10 years of retirement.

There will be a lot of things associated to retirement finances happening during the next 10 years. I will see Medicare, Social Security, and even RMD at the end of this next decade of retirement. There are plenty of opportunities for tax and withdrawal strategies between now and then that I will be working on. 

celebrate 10 years of early retirement

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Well, that was a fun rambling. One thing is certain for what’s next- I’m looking forward to breaking from my Friday-only beer rule today. Yes, I’m having a ten year early retirement anniversary celebratory craft beer this evening at my favorite coffee shop. Right where I am likely to come across people I now know and feel blessed to have in my life. Prost!