My Father-in-law told me, Do Not Let Greed Delay Your Retirement, Early Retirement is like leaving the Casino when ahead. My father-in-law passed away suddenly a year ago and today has me remembering his wise advice. His is a cautionary tale that stuck with me and contributed to my own early retirement story. I was still several years away from my early retirement goal and my father-in-law had only been retired for a couple of years when he offered his advice to me.
Early Retirement is like leaving the Casino when ahead – Odds Favor the House
Your Employer Can Change the Rules
My father-in-law worked for United Airlines on their Ramp Services Crew. His career was about loading bags and freight with a mind to keep the plane’s cargo evenly distributed, de-icing planes in the winter, and everything else that they were to do. 30 years into his job that provided awesome travel benefits he could retire with a full pension, his 401K, and a bunch of United Airlines stock given to employees instead of salary raises. As he explained, only after you retired could you cash out of that stock and diversify (before new rules about employee stock holdings).
At age 58 he was still healthy and although he had plans of retiring and traveling the world on the retired airline employee travel benefits he decided that by staying a few more years he could build up more savings and collect higher social security later on.
A few years pass and some freight shifts during loading a plane and injures his back. After medical treatment and some rehab he returned to work but his back was never the same. He hung in there a few more months until he hit 35 years of service and retired.
Aside from health issues associated to his back injury something else happened during those last months while he was getting ready to retire. United Airlines filed for bankruptcy. His company stock representing years of raises was all but wiped-out overnight. You don’t get a warning so you can quickly retire and sell your stock (that would be insider trading). So he counted his blessings and retired with his pension. Soon afterward United Airlines ditched their pension and handed it off to the PBGC which came with a reduced monthly benefit.
Your Health Can Change
6 months after retiring he found out he has bladder cancer. After surgery and other cancer treatments it was successfully removed but left him tethered. He needed to always be close to a rest-room which made the thought of traveling less attractive to him. Still feeling blessed for beating cancer he couldn’t help but to think what if. “What if I had retired when I was 58 with my 30 years? I would have been able to sell that stock and travel as we had always planned.” What if indeed.
As he told me, “I got greedy and should have left the casino when I was ahead”. Ahead in both retirement money and health. He knew of my early retirement goal and then warned me, “Don’t Let Greed Delay Your Retirement because your future is unknown”. He then said he didn’t believe in crying over spilled milk but knowing what he knows now he would have left as soon as he could. The old hind-sight dealio for him but great advice for me to chew on.
Cancer would have still visited him but they would have had a few healthy years to get out and do all the traveling they had long-planned to do.
Leaving the Casino When Ahead
I did take his advice to heart. We don’t know what our future holds for us. Early Retirement is like leaving the Casino when ahead. If you stay too long or linger eventually the House will win. The “House” or “Casino” is the system of life in the modern world. The system where we work doing things other than what we really want to do by trading our time for money.
We choose financial responsibility as our game of choice which is our gamble to winning a chance to have as much time as possible HAPPILY LIVING free from needing to work.
We gamble that financial responsibility will pay off and we will be able to follow our passions and our interests before our slowing through aging, decreased health and then leaving the planet with our inevitable death.
With the anniversary of my father-in-law’s passing it is something that I have thought a lot about lately.
Do Not Let Greed Delay Your Retirement – The Temptation for More Money
There are the internal factors like greed and fear at work tempting us to work longer, save more, and delay our retirement for more money. There are also the externally applied messages to feed our greed and fear.
- Messages telling us we need huge sums to retire with the same lifestyle we have when working.
- Messages telling us we need to delay retirement to get bigger Social Security checks.
- Messages telling us we need to plan on funding retirement until age 100.
These generic messages can cause us to look at what we have and decide to risk doubling down to have even more. Gambling our decreasing time for more money. Some folks pull it off but many lose. The odds favor the house. Life is finite. We burn through our time no matter how much is left, great or small. Most people have to burn through their time because they don’t play the game well (spending foolishly instead of saving/investing, heavy debt, making bad financial decisions) or have a long run of bad luck (poor work opportunities or underemployed) where the cards never came up for them. However if we do play well and have luck fall our way then we should resist greed or fear and know when to leave the casino when ahead.
Early Retirement is like leaving the Casino when ahead – Know When Enough Is Enough
This article isn’t about being financially reckless and pitching a career without first having done all that needs to be done to fund our retirement. Beating the House and winning with early retirement means we had just enough good luck and have played the game well through practice, commitment, and learned skills. We gambled with our earnings by saving and investing instead of seeking instant consumerist gratification. Gambling that we are going to hit the jackpot of retirement and have a greater tomorrow. If we are fortunate we will have retirement earlier than most who are spending time in the casino.
With the constant generic messages of needing more and more to retire comfortably we should take that in stride and run our own numbers.
Everyone’s retirement lifestyle and lifespan is different.
We can’t exactly pinpoint our lifespan but we do have clues.
- Our relative’s health and lifespans
- Our current health
- The actuarial lifespan estimates
We can account for the chances of longevity and hedge that bet either with our investment bucket strategy or by throwing in a QLAC if we want a longevity annuity.
Knowing how much we need to live our retirement lifestyle and how much we have wisely invested tells us whether we should exit the casino. It allows us to put our winnings to the test and know when enough is enough. I like to use the free Monte-Carlo type Retirement Calculator by FIRECalc. We can’t know when enough is enough until we finish running our own unique and specific numbers.
Having the right focus isn’t greed
Some believe that people who become frugal and super savers are money focused and greedy. I think they miss the point. If there is greed to be found in financial independence and retiring early it is in our wanting to cherish our time and not waste any more than we have to stuck in the rat race. We are time focused not money focused. Time is what we all gamble with. Greed comes into play when we lose sight of that and stay in the Casino far longer than we need to.
Final Thoughts
I miss my father-in–law. My father who I also greatly miss had passed away years earlier at an age below actuary lifespan estimates. Both of them succumbed to a form of cancer. Another piece of the casino’s bad luck that many of us may have a run of.
I have got a few calls lately from recruiters wanting to pitch opportunities that are aligned with the encore career I retired from not long ago. I admit the temptation of earning some extra cash and its high paying salary. I am all about retiring early and often.
It stokes some interest but only until I think about this game of chance I would again be playing. Re-entering the Casino and gambling my time for extra cash. Doing something that I am not passionate about and the entire time hoping I will still have time tomorrow to follow what my passions and interests are, living life again on my terms. I retired from that work for a reason because it no longer interests me. Why gamble with my time?
Once we know when enough is enough and have the smarts to leave the Casino while we are ahead we get the other prize brought by our won financial independence: Removing money from our life’s decisions. We can make decisions made at our spirit, our heart, our soul’s level.
Do you have any thoughts about Early Retirement is like leaving the Casino when ahead?
I love this idea of quit while you are ahead. And fragile health seals the deal!
Thanks for the comment. My father-in-law had a way of seeing things and I am glad I took his advice.
Tommy
Great analogy. It takes some insight to know when you’ve won and some wisdom to know that it’s time to walk away and enjoy.
Thanks for the comment James. I think having the wisdom to walk away is sometimes hard to always have. I was fortunate to have had some guidance on the subject to counter anything I was thinking at the time when considering pulling the trigger and leaving the casino.
Tommy
I’m sorry about your father-in-law’s bad luck, but what a powerful lesson that is for all of us. Thank you for sharing it. It’s so hard to know when it’s time to cash in your chips. For me, so much of the reason I save is out of fear. Life has its way of disrupting plans, you know? So while most people are content to save an average amount and retire at age 65 thinking they’ve got enough to live on, I feel like I need to have enough to weather storms A and B (whatever they may be), and still have enough left over to live on. It’s hard to know when to stop.
That’s why I’m focusing so much of my savings on building a rental property portfolio. I figure if I still have a steady income stream coming in, I’m a lot less vulnerable than if I were just in stocks and bonds, and then had to decide when to walk out of the casino. It may just be my personal bias showing through, but it’s reassuring enough to me that if I can get enough of an income stream going, I’d love to be able to pull the plug and retire around when you did, between age 50 and 55.
Thanks for the comment and your condolences Yetisaurus. I believe building a plan around rental properties is one of the soundest strategies for financial independence. My father-in-law had a big influence on me and I owe a big part of my courage to retire early to him. Good luck on your early retirement goals.
Tommy
I think early retirees can be said to be time instead of money greedy. Which is fine by me.
Was your father-in-law really greedy? Or just fearful? You know, the proverbial one more year syndrome. Considering his labor intensive job, surprised he lasted so long. By 57 I was having problems with my shoulders, while working a desk job.
Recently read the very good ‘The Essential Retirement Guide’ by Frederick Vettese. He disputes high replacement ratios and presents solid evidence to the contrary. But his most offbeat and disturbing stat is how many between the ages of 50 and 70 die, or suffer debilitating health problems: almost 50%! Life expectancy may be increasing, but good health isn’t:
business.financialpost.com/personal-finance/retirement/once-you-hit-60-its-time-to-take-carpe-diem-seriously
Very sobering! Fred is Canadian, but his advice is general, and American stats are, if anything, worse. Some of his more salient points are on the retirement essentials series linked to the above.
My father developed heart arrhythmia in his 60’s, which killed him by 71. Other male relatives fared worse, sometimes before they had a chance to retire. And they didn’t have dangerous jobs or notably unhealthy habits.
Thanks for the comment Steve. That is a great point and good distinction to make. My father-in-law used the word “greedy” but it could have been more about fear of not enough money instead of just wanting more money. I will never know. Results are same regardless. Unnecessary delay and the loss of our finite time.
Tommy