Author Topic: Balancing fears  (Read 2605 times)

BuildingFrugalHabits

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Balancing fears
« on: February 23, 2019, 10:43:08 AM »
I just had a coworker pass away shortly after retiring at a traditional retirement age.  It strikes me as a tragedy for someone to spend a lifetime working, saving, and accruing benefits only to die a year into their retirement.  Even for someone who likes their job or at least tolerates it, that seems like such a shame if they had any plans at all for their retirement. 

I see a lot of people in retirement planning who spend most of their time making sure they won't outlive their money.  I don't hear a lot of people IRL worried about dying while working, working too long, over-saving, or dying with a shitload of assets.  While, it's scary to think about running out of money in old age, the flip side is even scarier to me.  The opportunity cost of working too long shouldn't be ignored but what is the best way to balance?  We can always work longer to achieve greater security or a more luxurious lifestyle but how do you all decide when enough is enough and pull the plug?  I think that many of us feel the need to exert control and it seems like one aspect of FIRE is learning to let go a little and roll with the punches. 

shuffler

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Re: Balancing fears
« Reply #1 on: February 23, 2019, 12:10:01 PM »

big_slacker

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Re: Balancing fears
« Reply #2 on: February 23, 2019, 01:11:50 PM »
I just had a coworker pass away shortly after retiring at a traditional retirement age.  It strikes me as a tragedy for someone to spend a lifetime working, saving, and accruing benefits only to die a year into their retirement.  Even for someone who likes their job or at least tolerates it, that seems like such a shame if they had any plans at all for their retirement. 

I see a lot of people in retirement planning who spend most of their time making sure they won't outlive their money.  I don't hear a lot of people IRL worried about dying while working, working too long, over-saving, or dying with a shitload of assets.  While, it's scary to think about running out of money in old age, the flip side is even scarier to me.  The opportunity cost of working too long shouldn't be ignored but what is the best way to balance?  We can always work longer to achieve greater security or a more luxurious lifestyle but how do you all decide when enough is enough and pull the plug?  I think that many of us feel the need to exert control and it seems like one aspect of FIRE is learning to let go a little and roll with the punches.

FOMO is it? Easy cure is to craft a lifestyle where you can do SOME of the really epic stuff and a lot of the cool stuff while you're still young, healthy and able. A wise man once told me a 22 year old with $200 will have more fun on a vacation than a 75 year old millionaire will. :D

To your last question though I'd just include that it's not all or nothing. As you're closer to fire you can always ramp down your work hours so you have some security but a lot more time to start doing the awesome things you've been planning. Some of the best times of my life I was working 2-3 days a week and slaying pow or partying the rest of the time. I did not begrudge the work hours at all because they just weren't the majority of my time. But they were financing all the awesome stuff.

Monkey Uncle

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Re: Balancing fears
« Reply #3 on: February 23, 2019, 03:33:33 PM »
Here's how I handled the balance.  I had a pretty good handle on my expenses, and planned for about a $5k/yr buffer with a 100% success rate in historical modeling.  I ended up doing OMY because of uncertainty over health insurance, and once the ACA repeal effort failed, I had about a $12k/yr buffer.  At that point I decided there was no excuse for not pulling the plug.

So I was conservative in making sure I had a reasonable buffer, but once my buffer requirements had been more than met, I didn't move the goal posts out of irrational fear.

I should add that I'm a bit older than many around here (I was 49 when I FIREd), and my spouse is older than I am.  So I was definitely feeling the pressure to do it before we get to old to enjoy it.  If I was in my 30s I might have been even more conservative.

Zikoris

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Re: Balancing fears
« Reply #4 on: February 23, 2019, 04:25:37 PM »
It seems like two distinct fears. Here are the solutions

Fear of dying at your desk and missing out on doing cool shit: Do the cool shit NOW. Don't put off anything. Live an awesome life. Figure out a way to both do everything you want to do now, and also save 50, 60, 70% of your income. Then when you FIRE, just ramp up all the cool shit even more.

Fear of dying on the street due to running out of money: Be willing to be flexible after retirement, and make adjustments, whether that means changing your spending, doing a little bit or work/gigs here and there, moving, etc. This basically guarantees success. Also, having low expenses overall is a great strategy - in our case, we keep out expenses low enough that even if 100% of our money vanished entirely, we could easily sustain our lifestyle with very VERY part time minimum wage jobs, and of course, if we were old at the time the money went POOF, old age security would be enough for us to live extremely comfortably.

BuildingFrugalHabits

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Re: Balancing fears
« Reply #5 on: February 23, 2019, 05:39:02 PM »
Thanks for the responses.  These posts are really resonating with me.  I think I've entered OMY syndrome feeling like whoa, maybe I'm not quite ready to take the FIRE plunge.  Monkey Uncle, I've definitely been keeping an eye on the health care situation that is a big factor in delaying FIRE at this point.  I feel like I've already moved the goalpost since I started this journey 9 years ago. 

I think a phased in part-time situation could be really nice like (20-25 hours a week if I can make it work).  I've been trying strive for better work-life balance over the past couple of years (less travel, rarely work overtime now).  I picture FIRE as doing a lot of shit that I already do but more of it like Zikoris said.  But I don't think I could ski or shred hard everyday anyways but 4 day weekends every week sounds great for a few years until I'm ready.  Some days I'm okay with the status quo, some days I just want to slack off, and occasionally I feel like downsizing, becoming nomadic, living in a foreign country and learning the language... or at least taking a long sabbatical to go backpacking or exploring around.  Being child free and FIRED allows for any of these options if I play my cards right but I'm sort of all over the place in terms of dreams and making/executing plans.  The danger of course is paralysis by analysis and keeling over at my desk!

Spartana, you nailed it with not only dying but getting injured or just losing steam along the way.  It sounds like your strategy and philosophy have served you well.  I've changed my outlook slightly from going hard, avoiding injury.  I mix up my activities and give myself permission to skip a powder day (gasp) and recover when necessary.  It can be hard to buck culture and do something that the mainstream finance folks would consider reckless.  For some of these Guru's, it seems like no amount saved can ever be enough to be totally safe.  I just need to keep reminding myself that delaying retirement isn't without risk either. 
« Last Edit: February 23, 2019, 06:37:18 PM by BuildingFrugalHabits »

Monkey Uncle

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Re: Balancing fears
« Reply #6 on: February 24, 2019, 04:47:00 AM »
You haven't mentioned your age - that's an important factor in striking the balance.  Yes, you can keel over at your desk at any age, but it's a lot more likely if you're 60 than if you're 35.  The older you are, the stronger your FIRE strategy is, because your government retirement benefits will be larger and you are closer to receiving them, thus you can feel more confident including those in your strategy.  Also, if you're older, your FIRE plan simply doesn't have to last as long as it would if you were younger.  Higher likelihood of dying or becoming infirm + higher confidence in your FIRE plan = pull the plug sooner rather than later.

Regarding going part-time: that can seem like heaven on earth to someone who is putting in 40, 50, 60 hours or more per week in a soul-sucking desk job.  If I had had that chance four or five years ago, I probably would have leapt at it.  But viewed from the perspective of someone who is already FIREd, it doesn't look so hot.  After being FIREd for a little more than a year, I can't imagine going back to work for even 20 hours a week.  I have zero interest in being somewhere and doing compulsory tasks on someone else's schedule.  I absolutely love the freedom to do whatever I want whenever I want.  Even after reclaiming 50+ hours of my time per week, I find it difficult to do everything I want and need to do.  Part of that is because I refuse to go back to hectic "busy, busy, busy" mode.  Just slowing down to a more leisurely pace allowed everyday activities to suck up much of my reclaimed time.  So with the benefit of hindsight, if I were given a choice between doing OMY to achieve a solid FIRE vs. doing five more years at part time, I'd probably suck it up and do the OMY.

soccerluvof4

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Re: Balancing fears
« Reply #7 on: February 24, 2019, 05:05:22 AM »
I found this Article to be kinda eye opening on the difference of longevity if you fire early vs normal standards-

https://www.biznews.com/thought-leaders/2013/09/10/retire-at-55-and-live-to-80-work-till-youre-65-and-die-at-67-startling-new-data-shows-how-work-pounds-older-bodies


herbgeek

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Re: Balancing fears
« Reply #8 on: February 24, 2019, 05:34:09 AM »
I'm retiring in a few months, and yeah I'm a little scared about long term running out of money (even though its unlikely).  The way I've been dealing it is practicing skills and encouraging habits that would help me live cheaper if I had to.     We're not big spenders anyways so its not a hardship to me. 

We've always taken vacations and the like, even while being frugal, so I don't feel that I missed anything important along the way.  Not into status items.  I never viewed this journey as an either/or:  do nothing for 20 years to save maximum money was just not how I wanted to live my life.   So we did stuff, just not top of the line stuff.   I still have the memories of all those trips. 

big_slacker

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Re: Balancing fears
« Reply #9 on: February 24, 2019, 09:58:36 AM »
Regarding going part-time: that can seem like heaven on earth to someone who is putting in 40, 50, 60 hours or more per week in a soul-sucking desk job.  If I had had that chance four or five years ago, I probably would have leapt at it.  But viewed from the perspective of someone who is already FIREd, it doesn't look so hot.  After being FIREd for a little more than a year, I can't imagine going back to work for even 20 hours a week.  I have zero interest in being somewhere and doing compulsory tasks on someone else's schedule.  I absolutely love the freedom to do whatever I want whenever I want.  Even after reclaiming 50+ hours of my time per week, I find it difficult to do everything I want and need to do.  Part of that is because I refuse to go back to hectic "busy, busy, busy" mode.  Just slowing down to a more leisurely pace allowed everyday activities to suck up much of my reclaimed time.  So with the benefit of hindsight, if I were given a choice between doing OMY to achieve a solid FIRE vs. doing five more years at part time, I'd probably suck it up and do the OMY.

This is a good point worth considering. I guess it depends on the time of work. I do some side consulting right now and while it's not schedule-less, it's WAY WAY less scheduled and demanding than my regular work. Like I can do the tech work any time within the project period, and I can schedule meetings pretty much any time that works for the client and myself. If THAT is too much, there is always production/sales of something. EX: Building some nice tables and selling them locally, consignment, etc. More like a hobby.

There is contract work as well. Depending on your type of work it's fairly easy to just pick up a short term gig once a quarter or so. It's kind of the reverse of a normal person's vacation. Play most of the time, work 3-4 times a year.

That said, having taken breaks from work (1-3 months at a time) at a few points in my life being absolutely free is AMAZING so I get what Monkey is saying above. I didn't want to give it up, I just ran out of money, haha! I'd say the part time thing would be a stepping stone towards having enough of a pad/confidence to let go completely.

FWIW my personal plan is to let the kids get off to college and launched, then do the short term consulting gig thing while my wife continues to work part time/for health insurance. This isn't unfair, she didn't work for quite a while and I've always pulled in most of our income. I get a break before she does. :D

Health insurance is by far my biggest worry, especially late life.

Dicey

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Re: Balancing fears
« Reply #10 on: February 24, 2019, 10:15:39 AM »
Thanks for the batsignal, sparty. This quote was a source of endless inspiration/motivation in my pre-FIRE days. Six years hence, I still have no idea who wrote it, but I'm so happy I listened.

"Retiring too early is a mistake that can be recovered from. Too late and there is no recovery,"

Monkey Uncle

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Re: Balancing fears
« Reply #11 on: February 24, 2019, 10:59:01 AM »
Regarding going part-time: that can seem like heaven on earth to someone who is putting in 40, 50, 60 hours or more per week in a soul-sucking desk job.  If I had had that chance four or five years ago, I probably would have leapt at it.  But viewed from the perspective of someone who is already FIREd, it doesn't look so hot.  After being FIREd for a little more than a year, I can't imagine going back to work for even 20 hours a week.  I have zero interest in being somewhere and doing compulsory tasks on someone else's schedule.  I absolutely love the freedom to do whatever I want whenever I want.  Even after reclaiming 50+ hours of my time per week, I find it difficult to do everything I want and need to do.  Part of that is because I refuse to go back to hectic "busy, busy, busy" mode.  Just slowing down to a more leisurely pace allowed everyday activities to suck up much of my reclaimed time.  So with the benefit of hindsight, if I were given a choice between doing OMY to achieve a solid FIRE vs. doing five more years at part time, I'd probably suck it up and do the OMY.

This is a good point worth considering. I guess it depends on the time of work. I do some side consulting right now and while it's not schedule-less, it's WAY WAY less scheduled and demanding than my regular work. Like I can do the tech work any time within the project period, and I can schedule meetings pretty much any time that works for the client and myself. If THAT is too much, there is always production/sales of something. EX: Building some nice tables and selling them locally, consignment, etc. More like a hobby.

There is contract work as well. Depending on your type of work it's fairly easy to just pick up a short term gig once a quarter or so. It's kind of the reverse of a normal person's vacation. Play most of the time, work 3-4 times a year.

That said, having taken breaks from work (1-3 months at a time) at a few points in my life being absolutely free is AMAZING so I get what Monkey is saying above. I didn't want to give it up, I just ran out of money, haha! I'd say the part time thing would be a stepping stone towards having enough of a pad/confidence to let go completely.

FWIW my personal plan is to let the kids get off to college and launched, then do the short term consulting gig thing while my wife continues to work part time/for health insurance. This isn't unfair, she didn't work for quite a while and I've always pulled in most of our income. I get a break before she does. :D

Health insurance is by far my biggest worry, especially late life.

Well, I should disclose that I actually do a very tiny amount of consulting work.  Like, 30 hours worth for all of 2018.  So it's nothing like a "real" part time job.  I took it on at the request of a company that I used to interact with in my former career.  I didn't seek it out, but when they approached me I didn't want to burn a bridge by saying no.  I'm happy that it turned out to be almost no work at all.  If I actually tried to get a gig like that, I think it would be pretty difficult to find one that has so little demand on my time.

BuildingFrugalHabits

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Re: Balancing fears
« Reply #12 on: February 24, 2019, 05:57:38 PM »
I'm approaching 40 so not that old but I'm not that young either!  I'm thinking pretty hard about dropping down to part time as soon as the house is paid off and my expenses drop.  At that point, I still project a savings rate greater than 50% with our current consumption.  It will be good to see what I little taste of freedom can feel like.  I think part-time by 40 is a good goal to shoot for.  That would allow me a lot more time to pursue outdoor hobbies without falling behind on domestic obligations like cooking etc.  Eventually though, I'll need more control over my schedule than part time allows but I think a few years of part time to test the waters can't hurt.