One does not retire before 65

[Gen Y Finance Journey]

My parents know I've gotten very into personal finance, but I haven't actually talked to them about the idea of early retirement. Until last night.

A contractor at my company recently learned that her contract isn't going to be renewed. She's probably late 50's and has worked in sales her entire career. I have no idea if she actually has saved up a good sized nest egg, but she certainly should have been able to given her career and where she lives. I made a comment to my father that I didn't understand why she was looking for a new job, that she should just retire early instead. His response was simple: but she's not 65 yet. I replied by saying that surely she must have enough money saved up to cover the years until she can tap into her retirement savings and collect social security. My father didn't argue that point, he just reiterated that one does not retire before 65.

My father himself retired recently at 67, though he had more than enough money to retire earlier if he had wanted to. He's even putting off collecting social security until 70 so he can collect the full benefit. He will have no problem covering expenses until then. But he wouldn't have dreamed of retiring before 65. (In fact, he probably would have kept working longer if my mother hadn't expressed her desire for him to retire.)

Is it just because he loved his job that he can't understand why anyone would retire early? Or is it something else? I can understand how someone who spends all they earn couldn't fathom retiring early, but for someone who has always been frugal and could have easily retired early, why do they not even see it as an option?

Is it a generational thing? Does he feel that he owes it to the community/country/whoever to continue working? Is it just that it's always been the way things worked, so therefore it must be right?

I'm curious if others have observed people who are very frugal and could easily retire early if they wanted to, but are unilaterally against the idea, not just for themselves, but for everyone. Why do you think they have those views?

[superhero]

I think a lot of people see retirement as leaving "work-type activities". For me, and a lot of other people out there, I truly enjoy doing what most people consider "work"; whether it's paid, unpaid, and if I don't need the money. Even when I reach FI I'm still going to "work". It's just that I want to be able set my own hours, take a few months off for a vacation, or a year for traveling - things like that.

On the other hand, some people consider retirement as involving yourself in a set of leisure activities. I know someone who would happily spend her retirement exercising, doing art things and reading. Nothing really considered "work" by society's standards.

It may be narrow-minded of your father to think everyone should work through 65, but he probably doesn't see that working is not what everyone likes to do. Or maybe I'm wrong and he think everyone has a debt to repay for being born.

[matchewed]

Don't underestimate the power of culture here. Our culture teaches us that you go to school, get a job, buy a house, raise a family, retire in your sixties, and die. Options outside of that have always existed but not communicated in such a manner until the internet showed up. Now people can discuss and live lifestyles outside of that cultural framework. Now we create new cultures from the fragments of culture we see floating around us.

That's awesome in my mind.

[Joshin]

I really lean toward the cultural/generational on this one. My dad couldn't understand early retirement, even when some of his coworkers took advantage of it. A man's job was to work until he was at least 65, his main role in life was as the bread winner. Then he was forced to retire at 63 due to his health. When my mom and I took him to his dr's appointments, a common question the first couple years after retirement was, "any signs of depression?" We were told that retirement kills a lot of men because they become depressed. Seems they don't feel useful anymore.

My dad is now 70 and fully into his retirement. He is loving every minute of it. He's limited because of health concerns -- no major travel or active pursuits. He mainly takes the grandkids out and powers around the neighborhood on his scooter. He reads a lot, enjoys his patio even more, and he and my mom take short excursions to local wheelchair-friendly attractions. He can't enjoy the fine dining he loved anymore, so he instead launched a second extremely part-time career doing food writing, which he adores but only does when he feels like it. He advises everyone he meets to try and retire as early as possible because his only regret is he didn't retire earlier, when he still had his health.

[mgreczyn]

Exhibit A is my dad, a retired military officer.  For the uninitiated, service members are eligible for pension benefits upon reaching 20 years of service.  Benefits start at something like 60% of base pay at 20 years and every year served after 20 increases the percentage until you get to a max of 80% at 30 (with a couple of rare exceptions, one must retire at 30 years).  If you're doing the math, military service is actually an excellent path to early retirement, allowing one to retire between the ages of 38-45 with a respectable annual income even if you fail to save a single dime.  Dad retired as an O-6 at thirty years, pulling something like $80k in pension benefits annually.  Then he got a full-time job.  When that gig was up he got another one.  And then did it again.  10 years after "retiring" from the world of main battle tanks, jody runs and explosions, he's still working full time.  I'll add that leaving aside the pension, he still managed to put away an amount of money that I would likely feel comfortable retiring on myself, at this very moment, as a 37 year old non-pension-recipient.  One drawback of military service is moving every 3-5 years, perfectly timed to prevent one from building home equity, so they're only now coming close to paying off their house.  But still, to my mind he could have stopped working 10 years ago, pulled up stakes and gone... wherever.  But he chooses to keep working.

[Gen Y Finance Journey]

My dad is now 70 and fully into his retirement. He is loving every minute of it. He's limited because of health concerns -- no major travel or active pursuits. He mainly takes the grandkids out and powers around the neighborhood on his scooter. He reads a lot, enjoys his patio even more, and he and my mom take short excursions to local wheelchair-friendly attractions. He can't enjoy the fine dining he loved anymore, so he instead launched a second extremely part-time career doing food writing, which he adores but only does when he feels like it. He advises everyone he meets to try and retire as early as possible because his only regret is he didn't retire earlier, when he still had his health.

I'm wondering if my dad will get to this point too. He has always loved his work, but it was never his entire life. He loves the outdoors, gardening, working with tools, reading, fishing, spending time with family, and just generally increasing his knowledge on pretty much every subject. I wouldn't have thought someone with such a lust for life would be so opposed to early retirement.

My dad has always been stubborn though, and according to my mother changing his mind on a subject can take quite a long time, if you can even succeed at all. :)

[randymarsh]

There's a cultural assumption that more money = better. Always. Many people I bet flat out do not "get" how MMM could leave a high paying career. He said himself he's left probably $1,000,000 on the table by not working. For some, that's simply incomprehensible.

We also define ourselves, men especially, by what we do. It's the 1st thing discussed when you meet a new person usually. So the thought of not being anything is jarring for a lot of people.

[velocistar237]

http://earlyretirementextreme.com/what-retirement-is-and-means-to-me.html

[totoro]

It is all about beliefs.  Your dad believes in what he is saying and is comfortable where he sits.  It works for him.

The question as to whether set beliefs hold up to reality testing is a different one.

As long as reality testing is not forced upon you and the beliefs don't hold up, you can continue along with the same set of beliefs.  There is an issue with being judgmental when you assign value to the actions of others based your untested beliefs.  This is his issue though, and not yours.   

Seems pretty common to me.  Just not normal for people who like to think outside the box.  I would sidestep the issue and not engage unless you feel like he is interfering in your decisions.

[willn]

How about considering that retiring early just doesn't sound that fun? 

It's common enough in people's 40s, 50s or so, that they are finally experts in their field, they've found what they like doing, and why would they quit?  They are in the mastery years.  They are leaders and mentors.  They want to leave a legacy.  They are less impulsive.  They are more productive. They are wiser, more patient, and sometimes more sentimental.  They don't want to sit around blowing shit up on an xBox and lots of shiny material crap has become less important.

Why is it so hard to understand that retirement might actually suck?

Even if someone isn't doing a dream job, the idea of retirement may seem boring. 

I spent much of my 20's and 30's as a climbing bum.  I can't imagine anything more boring right now in my 40s than sitting around all day at a cliff with bunch of dude boys trying to impress flaky girls and hanging by my fingertips.

Point is, you're going to change over the decades, and you need a plan for retirement that includes being productive, not just dicking around.  For a lot of people, they watched their parents retire and then crumble into bad health.  A teacher who spent her days hustling around the classroom for 40 years, suddenly has a stroke after 6 months of sitting in front of the tv.  Etc.  That's why retirement may be resisted as an idea by some.

Maybe this needs to be reframed as "financial independence" rather than retirement. Find what you love, then do it since money doesn't matter to you.

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know. 

Really, I think you have a responsibility as a human, to humankind, to be the best, most productive version of yourself.  That's not some lazy slacker.  We need your creativity, your hustle, your productive effort.  Someone needs to build the next generation of kick ass stuff, create new jobs, teach our kids, and lead us.

[Gen Y Finance Journey]

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know.

Where on earth do you see that attitude around here?

[totoro]

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know.

Where on earth do you see that attitude around here?

Ditto.  Odd response. 

No problem if you want to keep working and find work fun.  Lots of people do.  Problem if you state "one does not retire before 65" and then apply it as a moral standard to your family members and society as a whole. 

[willn]

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know.

Where on earth do you see that attitude around here?

Probably an over generalization.  Though I did say "some" attitude, and I've seen some posts about how relaxing retirement will be.  I thought it was worth commenting on is all.  Some youngsters hate working for the man in an office but later in life find they've changed and would kill for a good office job. Or they become "the man" and realize they've changed. 

[Jamesqf]

For me, and a lot of other people out there, I truly enjoy doing what most people consider "work"; whether it's paid, unpaid, and if I don't need the money. Even when I reach FI I'm still going to "work". It's just that I want to be able set my own hours, take a few months off for a vacation, or a year for traveling - things like that.

Exactly.  (With the caveat that I really dislike travelling.)  By that standard, I've been "retired" for a decade or more: I do work that interests me, set my own hours, work from home or wherever I have power for a computer...

You need to conside that for a lot of people, a conventional retirement means that you quit doing a productive job, and (like a neighbor of mine) sit on your butt watching daytime TV all day, until it finally kills you.  Or maybe you play lots of golf, or drive around the country in an RV, or do other mind & body numbing things until - unless you're lucky enough to drop dead first - you deteriorate to the point where you're warehoused in a nursing home.

[Ozstache]

Probably an over generalization. 

Probably? How about definitely. This site is far from the roost of old-school idle retirees.

[totoro]

For me, and a lot of other people out there, I truly enjoy doing what most people consider "work"; whether it's paid, unpaid, and if I don't need the money. Even when I reach FI I'm still going to "work". It's just that I want to be able set my own hours, take a few months off for a vacation, or a year for traveling - things like that.

Exactly.  (With the caveat that I really dislike travelling.)  By that standard, I've been "retired" for a decade or more: I do work that interests me, set my own hours, work from home or wherever I have power for a computer...

You need to conside that for a lot of people, a conventional retirement means that you quit doing a productive job, and (like a neighbor of mine) sit on your butt watching daytime TV all day, until it finally kills you.  Or maybe you play lots of golf, or drive around the country in an RV, or do other mind & body numbing things until - unless you're lucky enough to drop dead first - you deteriorate to the point where you're warehoused in a nursing home.

If you choose to sit around in retirement that is fine.  Happiness should probably be the measure - not work productivity.  My bet is that the happiness is highly correlated with being more productive and, you know, it tends to rub off on those around you.

I fit that definition of retired too going on for eight years now.  I still work, but part-time and I choose the  hours.  I've taken most of the summer off.  Sometimes I sit and do nothing and I find it very relaxing.  Other times I'm doing projects and fun stuff with kids.

As for what other random people are doing - I don't know and not sure why I would pass judgment unless it impacts my quality of life.  My parents really enjoy driving around in their RV. 

[steveo]

Maybe this needs to be reframed as "financial independence" rather than retirement.

I agree with this. In saying that I see no reason not to retire from your job. Your job may mean a significant amount of horseshit to eat per week and you don't want that.

I think you need to do stuff though.

[Nords]

Exhibit A is my dad, a retired military officer.  For the uninitiated, service members are eligible for pension benefits upon reaching 20 years of service.  Benefits start at something like 60% of base pay at 20 years and every year served after 20 increases the percentage until you get to a max of 80% at 30 (with a couple of rare exceptions, one must retire at 30 years).  If you're doing the math, military service is actually an excellent path to early retirement, allowing one to retire between the ages of 38-45 with a respectable annual income even if you fail to save a single dime.  Dad retired as an O-6 at thirty years, pulling something like $80k in pension benefits annually. 

Just to be excruciatingly correct for an impressionable young(er) audience, perhaps your Dad retired under the "Final Pay" system.  (I'm also a member of the Final Pay era-- it's for those who were sworn in before 8 September 1980.)  That's been superseded by today's "High Three" system. 

http://www.dfas.mil/retiredmilitary/plan/estimate.html

Today, 20 years of service makes a servicemember eligible for 50% of the highest three years of base pay (which works out to about 47% of the latest base pay scale).  The next decade of service past 20 adds about 2.5% per year, topping out at 75% of high-three at 30.  Senior ranks (flag officers, E-9s, some special skill areas) may be eligible to continue on to 40 years for 100% of high-three, but at that level it's no longer about the money or early retirement.  There are also different retirement systems for medical disability, a limited number of retirements between 15-20 years (for drawdowns), and a horrible deal known as CSB/REDUX.

That High Three pension percentage is applied to base pay, which is only about 60%-70% of  a servicemember's total compensation.  (The rest is "specialty pay" or "bonus" or tax-free "allowances".)  The result is that a servicemember's 20-year pension is about 25%-30% of their active-duty take-home paycheck.  That's still a good deal, although there's a reason that only 17% of the military's servicemembers actually stick around for any sort of pension-- let alone an active-duty one.  That varies by service & specialty, too.  Up to 30% of the Air Force's veterans collect an active-duty or Reserve or Air National Guard pension.  Fewer than 10% of the Marines collect an active-duty or Reserve pension.

The real honkin' big benefits of a military pension are the annual cost-of-living adjustment (same as the Social Security COLA) plus the cheap healthcare (~$45/month for a family).  But nobody should join the military for those benefits.  Heck, you shouldn't get married for those benefits.  My daughter would even advise not being raised by military parents.
http://the-military-guide.com/2011/08/03/join-the-military-to-retire-early-the-rest-of-the-story/

In the interests of "fair and balanced", it's possible to earn over $100K/year after just six years of service.  Welcome to the club, sucker:
http://the-military-guide.com/2011/07/13/getting-rich-in-the-submarine-force/

One drawback of military service is moving every 3-5 years, perfectly timed to prevent one from building home equity, so they're only now coming close to paying off their house. 

I wish I had a study of the median time between duty station moves.  I suspect the military would not provide the data for it.  I moved 10 times during a 20-year Navy career, and my spouse moved nine times during hers.  We were still frequently lectured about the drawbacks of "homesteading".  My impression of the Army and the Marines is that moves happen even more often, and for the last decade the tour at about half of those duty stations has included a one-year deployment.

[Jamesqf]

In saying that I see no reason not to retire from your job. Your job may mean a significant amount of horseshit to eat per week and you don't want that.

That would seem to be an even better reason for finding a different job, long before you reach the point where actual retirement is an option.

[DocCyane]

How about considering that retiring early just doesn't sound that fun? 

It's common enough in people's 40s, 50s or so, that they are finally experts in their field, they've found what they like doing, and why would they quit?  They are in the mastery years.  They are leaders and mentors.  They want to leave a legacy.  They are less impulsive.  They are more productive. They are wiser, more patient, and sometimes more sentimental.  They don't want to sit around blowing shit up on an xBox and lots of shiny material crap has become less important.

Why is it so hard to understand that retirement might actually suck?

Even if someone isn't doing a dream job, the idea of retirement may seem boring. 

I spent much of my 20's and 30's as a climbing bum.  I can't imagine anything more boring right now in my 40s than sitting around all day at a cliff with bunch of dude boys trying to impress flaky girls and hanging by my fingertips.

Point is, you're going to change over the decades, and you need a plan for retirement that includes being productive, not just dicking around.  For a lot of people, they watched their parents retire and then crumble into bad health.  A teacher who spent her days hustling around the classroom for 40 years, suddenly has a stroke after 6 months of sitting in front of the tv.  Etc.  That's why retirement may be resisted as an idea by some.

Maybe this needs to be reframed as "financial independence" rather than retirement. Find what you love, then do it since money doesn't matter to you.

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know. 

Really, I think you have a responsibility as a human, to humankind, to be the best, most productive version of yourself.  That's not some lazy slacker.  We need your creativity, your hustle, your productive effort.  Someone needs to build the next generation of kick ass stuff, create new jobs, teach our kids, and lead us.

First off, I disagree with most everything willn has stated.

I don't think we have a responsibility to be productive by anyone's standards but our own. As long as we pay our own way, we're good.

I don't sense any attitude around here that people are looking to retire early so they can watch Oprah. Far from it. I'm not sure where willn got that impression.

And as far as the OP, some folks don't want to retire because work is the only place they feel important and they need the ego stroke. I know a lot of Baby Boomer males who won't go off into the sunset because they enjoy the constant ego stroke of being top dog at work. The rest of their department wants them to go away, quite ironically.

[ender]

I just sense some attitude around here that life is going to be 11am wake up calls, Oprah reruns, and six pack lunches once you make the magic number.  You'll rot if you do that, you know. 

I have no idea what on this forum gives you this impression.. I'm relatively new here and it seems most people here want FI to basically have the freedom to actually do things they WANT to do.

[Dr.Vibrissae]

It's common enough in people's 40s, 50s or so, that they are finally experts in their field, they've found what they like doing, and why would they quit?  They are in the mastery years.  They are leaders and mentors.  They want to leave a legacy. 

This paragraph struck me as having truth, especially in some fields.  For instance I work in a discipline that requires a good deal of training that cannot be acquired from a book.  People tend to develop sub-specialties, which again takes time and exposure, the more experience you have, the better you become, so that in your 40's and 50's you may be doing more interesting work and have a level of expertise that is highly valued.  Several members of the department, have actually retired and later come back (not for monetary reasons).

I don't know what the OP's father does, but there's an argument for continuing to 'work' after FI.  In fact there is a name for that on these boards 'SWAMI'.

[mgreczyn]

Just to be excruciatingly correct for an impressionable young(er) audience, perhaps your Dad retired under the "Final Pay" system.  (I'm also a member of the Final Pay era-- it's for those who were sworn in before 8 September 1980.)  That's been superseded by today's "High Three" system. 

Yes.  He's West Point '72.

But nobody should join the military for those benefits.  Heck, you shouldn't get married for those benefits.  My daughter would even advise not being raised by military parents.

Yes!  Although I'll go ahead and disagree with being raised by .mil parents.  In general, other than the instability factor, I found the military to be a great family environment and a great opportunity to experience parts of the world most never see.

In the interests of "fair and balanced", it's possible to earn over $100K/year after just six years of service.  Welcome to the club, sucker:
http://the-military-guide.com/2011/07/13/getting-rich-in-the-submarine-force/

Yes again, and if you don't like lurking around underwater then you could also join USAF and fly cargo planes.  Everyone <seems to want> goes for the fighters since it looks so cool but A) the career field is rapidly being taken over by robots, B) you spend an hour briefing/debriefing for every 20 minutes in the cockpit and C) no bathrooms and D) it's hyper-competitive (consider that there have been more professional football players throughout the years than F-15 pilots).  If you fly cargo and work it right you might never pay taxes. Add in flight pay, hazardous duty pay, yada yada and pretty soon you're talking real money.  I always thought that if you were after fun, fly helos for the VFR + low level factor.
[/quote]

I wish I had a study of the median time between duty station moves.  I suspect the military would not provide the data for it.  I moved 10 times during a 20-year Navy career, and my spouse moved nine times during hers.  We were still frequently lectured about the drawbacks of "homesteading".  My impression of the Army and the Marines is that moves happen even more often, and for the last decade the tour at about half of those duty stations has included a one-year deployment.

It's probably in some study at the bottom of a dusty file cabinet in a personnel office somewhere.  Your specialty impacts this also. As arebelspy is fond of saying, YMMV. My father was armor, by the time I was 17 we had moved 13 times.  Some of those were 3 year postings, some 2 years and the shortest was 9 months.  I was a USAF battle manager for 7 years, specifically rated for E-3 B/C Sentry employment.  Although there are multiple duty locations for that specialty, there are exactly 3 US bases for that airframe, with something like 70-80% of the postings located at Tinker AFB in good old OKC.  So other than initial training and deployments, I was at one base for 6 years. RE the "drawbacks" of homesteading, for me that's at least part of the reason I left. Being expected to spend the entirety of my professional life on the move after having spent the entirety of my childhood doing so helped peg my BS meter.