Author Topic: Why Are So Many Doing "One More Year"?  (Read 28411 times)

Retired To Win

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Why Are So Many Doing "One More Year"?
« on: March 06, 2015, 11:00:22 AM »
Why do you think so many people suffer from One More Year syndrome?  They'll say that they want to retire.  They'll even say that they have enough savings to retire.  But instead they decide to stay on the job "one more year."  Which they may repeat and repeat.  Why is that?

I think the reason is fear.  As I see it, it could be fear of running out of money, or of losing one's status or identity, or of becoming socially isolated, or of being bored.  Or even just plain fear of the unknown.  And it seems to me so sad that people should let themselves get held back that way.  Because I can think of all kinds of ways to overcome such fears.

I have a "Plan B" for expenses in case my financial planning is off.  My wife -- just retired from a high-profile professional position -- has gotten herself new hats to wear as a church committee leader and as a volunteer county environmental safety board member. Our friend Mike seems to always be doing something or going somewhere with a bunch of people from one of the many clubs he belongs to.  And I can't imagine how I could ever get bored when there's so much for me to see, do and learn.

And that's just a quick list of "fear fixers" off the top of my head.  I'm sure you've already thought of many other ways to overcome the worries or fears that could hold you back from embracing retirement.

So, I've got to ask again.  Why do you think so many people let themselves get trapped into OMY?  And why do they find it so hard to overcome that?

JasonS

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Re: Why Are So Many Doing "One More Year"?
« Reply #1 on: March 06, 2015, 12:59:43 PM »
I think the primary reason is a fear of running out of funds.  People can use the calculators and spread sheets that tell them they are safe to retire but there is always the fear of the unknown catastrophe around the corner.  I agree that it's sad that people get paralyzed by this, but I haven't gotten to that point yet...maybe I'll be a "one more year" person...dunno.  I doubt it, but it isn't real until you get there.

AlwaysBeenASaver

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Re: Why Are So Many Doing "One More Year"?
« Reply #2 on: March 06, 2015, 02:00:12 PM »
I've hopefully overcome OMY syndrome and will go through with my RE plan later this year, but for me it's been fear of running out of money and losing everything I've worked so hard for. My fear of running out of money stems from the inevitable "unknowns" in the calculations. I like precision, and these calculations are inherently imprecise.

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Re: Why Are So Many Doing "One More Year"?
« Reply #3 on: March 06, 2015, 02:15:26 PM »
The math is very strongly in favor of OMY.  Just for example:

Stache:  $1,000,000

Take Home: $100,000

Saving Rate: 60%

Withdrawal rate: 4%

Average annual return (nominal): 10%

If our example retires today, they can withdraw $40k a year, perfect right?  BUT if they wait one more year things look more like this:

Additional Savings: $60,000
Additional earings: $100,000
OMY Stache': $1,160,000

Which would support a withdrawal of $46,400 vs $40,000 or a 16% increase for waiting only one more year, and that 16% increase that will continue on forever and compound (theoretically).

That's the only reason I would work one more year, going from a 3-4% WR to a 2-3% WR wouldn't do much for me.  Damn, I might have just convinced myself to work one more year:(
« Last Edit: March 06, 2015, 02:18:12 PM by So Close »

deeshen13

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Re: Why Are So Many Doing "One More Year"?
« Reply #4 on: March 06, 2015, 02:32:02 PM »
So Close, you're math failed a bit in your example.

If you take home 100k with a 60% savings rate, that would be savings of 60k and 40k annual expenses.  New OMY stashe balance is 1,060,000 + change in principle.  If we assume 6% capital appreciation, new OMY stashe is 1,120,000.

Boy it'd be nice to earn 100k at a job, then add 100% of that to the stashe, plus another 60% as well for 'savings' (yay 160% savings rate).

TheOldestYoungMan

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Re: Why Are So Many Doing "One More Year"?
« Reply #5 on: March 06, 2015, 02:59:45 PM »
Fear.  For sure.

But there's other things to.

5 or 10 years out, you hate your job.  One reason for this is you don't think you have choices.  I love my job but I still hate it.  Standing on the edge of never working again, looking at my huge pile of assets, I know I'm going to look at a savings rate of over 50k/year and think to myself, that was actually fun saving that much money, and it's not likely I'll do that ever again.

Saving has become my favorite hobby.  And the best way to pursue that is to keep earning the most I can, which I think is my job right now.

MMM said it several times, as well as ERE and others, it's about what is "enough."

You have this lifestyle you know you can live with, and you have this pile of cash you need to do that.  But once you've gotten to the pile of cash, and it wasn't that hard to get it, you think, what if I just add one more thing to the lifestyle?

If working one more year lets you own your own plane and live on a house with an airstrip, that might be worth it.  Maybe a relative just got in to college, and you think, I could cover that whole cost if I work just one more year.  That's a gift to a loved one that will help them every day of their life.  Maybe they'd be better off managing that expense on their own like you, but maybe there's no harm working that extra little bit.

If FIRE is about having the option to retire, then you've made it.  To me OMY is about using that freedom and choosing to go ahead and still work.

The other thing, as I've gotten closer to FIRE, is that work isn't nearly as bad as it used to be.  For one thing, I just don't do things that I don't want to do.  They can F'ing fire me, I've got enough saved to live for decades.  I come in late, I leave early if I want to.  All my work gets done, I don't put up with any bullshit.  A frugal lifestyle has already granted me many of the benefits of being retired.  Knowing I'm almost done, I don't stress about "developing my career" the way some of these others do.  I'm not going to do this for another 30 years, no matter what.

If it wasn't for having to be here so regularly I'd probably never quit.  But I want to visit folks and be able to stay for weeks, instead of barely even two full days.  I want to vacation in a place for long enough for it to be hard to say goodbye to the people I meet there.  I'm 5 years away from even 3 weeks off per year, so FIRE is my way of buying extra vacation.

The why of OMY is the exact same why of why not now?

What keeps me working even now, until I hit my FIRE goal, is what if I can't really find that much part time work?  What if the cultural stigma attached to retiring so young makes professional work impossible to get?  What if zombies?  The whole FIRE number 4% SWR thing is ultimately based on "maths" and hope, neither of which I'm inclined to trust.  Is it fear?  Yes.  Or it's just being responsible.  It's all well and good to have enough to live the rest of your life without being a burden on anyone.  But if you fall short by 15 or 20 years, or have to put in 5 years of work after 10 years off that could've been avoided by OMY, then damn, what was the right call?

I'm not going to live off of 4%.  4% +other income will cover my expenses.  Some on here would call me crazy, but I do have faith in myself.  If I do OMY, it's going to be because work isn't so bad, the markets didn't do that well for the next 28 months or so, or because of a woman.

Two more years past my expected retire date, I'd save enough to completely pay off my house, eliminating my last debt and reducing my yearly expenses to under 10k/yr.  It's tempting.  It also would likely mean I'll die with 14 million dollars in the bank, which is just stupid.

I'd rather have to find a decent rock and a bridge when I'm 85 then for my heirs to have to deal with tax attorneys.

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Re: Why Are So Many Doing "One More Year"?
« Reply #6 on: March 06, 2015, 03:02:29 PM »
So Close, you're math failed a bit in your example.

If you take home 100k with a 60% savings rate, that would be savings of 60k and 40k annual expenses.  New OMY stashe balance is 1,060,000 + change in principle.  If we assume 6% capital appreciation, new OMY stashe is 1,120,000.

Boy it'd be nice to earn 100k at a job, then add 100% of that to the stashe, plus another 60% as well for 'savings' (yay 160% savings rate).

I was assuming 10% investment returns...

sirdoug007

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Re: Why Are So Many Doing "One More Year"?
« Reply #7 on: March 06, 2015, 03:40:46 PM »
I think OMY is completely psychological.  Obviously if we were all just rational beings that determined we can ER when our investments allow a certain withdrawal rate there would be no such thing as OMY.

I think there are two big components here:

1. Identification with your job as the source of your value as a person.  After decades in a role and constantly associating your self with it, it is hard to divorce your sense of self from your role.  What will you say when you meet another American and they inevitably, immediately ask you "What do you do?"

2. Fear that you are making an irrevocable decision.  I think a lot of people are very scared that they will never make as much money again, never be welcomed back to their company/industry etc.  This makes taking the leap of faith much, much harder.

In both cases, these things are not really true.  Yet the voice in our heads is a very powerful motivator NOT to make a change.

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Re: Why Are So Many Doing "One More Year"?
« Reply #8 on: March 06, 2015, 04:16:48 PM »
 I have a retirement date in mind that I'm counting down to in 3-4years time. However I do have a couple of alternate plans, which include working one more year. I'll reassess as I go along and closer to the time. The OMY plan changes the equation to the stash projecting to increase forever, as opposed to being merely self sustaining or decreasing.  The major reason for me considering this is that I believe the coming 1-2 decades are likely to be increasingly difficult economically  in the West, which will translate to a general decline in standards of living. Generally I'm referring to increased ageing population in relation to workers,  printing money, dropping interest rates, increased govt debt etc etc. I'm not saying TEOTWAWKI, but I think its very likely things will get tougher. Make hay while the sun shines.

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Re: Why Are So Many Doing "One More Year"?
« Reply #9 on: March 06, 2015, 04:22:31 PM »
I'm on the verge of doing one more year or maybe more of working after doing FIRE for the last 16 months. For me, it's a bit of what people have mentioned- fear of making an irrevocable decision. One other factor is that we have been in a bit of transition in terms of choosing a place to live and so I feel like yearly expenses are not clearly established for the long-term. Throws one more uncertainty into the FIRE calculations.

Retire-Canada

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Re: Why Are So Many Doing "One More Year"?
« Reply #10 on: March 06, 2015, 05:25:20 PM »
I think the reason is fear. 

I agree. Fear drives a ton of our decisions.

If you subscribe to the MMM-style FIRE there are so many levels of safety and redundancy in a 4% SWR plan that working any more once you reach that target is because you want to work more or you are afraid of stopping.

FIRE types may spend hundreds of hours contemplating the plan, but when it comes time to execute they face a challenge they hadn't really considered. Breaking the the habits of a lifetime and switching to a new way of living. Change is stressful proportional to how dramatic it is. Going from 40-60hrs/week of hard work to zero and living off investments is a huge stress.

I think we should spend as much time contemplating the psychology of our FIRE experience as we do SWR and asset allocation.

It seems like stopping working to FIRE should be easy/simple, but the reality may be much more challenging.

-- Vik
« Last Edit: March 07, 2015, 10:40:41 AM by Vikb »

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Re: Why Are So Many Doing "One More Year"?
« Reply #11 on: March 07, 2015, 08:09:59 AM »
To add to the list:

- Fear of being judged a deadbeat, esp. by in-laws who see you as mooching off of your spouses money as he/she continue to work after already bringing more to the stash than you.
- Fear of not being able to move out of one's present LCOLA given real estate prices everywhere else
- Desire for padding for the FIRE'd life (particularly things of a mustachian nature, e.g. solar panels, house insulation, a new/used car) before pulling the plug
- Finding ways to prolong income through work while minimizing the BS and maximizing freedom

The Beacon

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Re: Why Are So Many Doing "One More Year"?
« Reply #12 on: March 07, 2015, 08:13:18 AM »
We fear 2 things.

1: not enough money.
2: not sure what to do during the day.

Both of these arguments have been rebutted over and over again.   Nevertheless, do not underestimate the psychological impact money can drop on you.

SnackDog

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Re: Why Are So Many Doing "One More Year"?
« Reply #13 on: March 07, 2015, 08:19:32 AM »
I know work colleagues who have reached FI.  So, they are working a few extra years and just spending freely.  Working and spending. Flying business class.  Fine dining.  Five star hotels.  Living it up for a couple years before retiring to live on a fixed income.

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Re: Why Are So Many Doing "One More Year"?
« Reply #14 on: March 07, 2015, 08:46:06 AM »
Once one has enough to secure retirement (which seems to be commonly defined as a 4% SWR) some people aspire to have a bit more.  And there is absolutely nothing wrong with that.  Aspiring to do better is laudable and commendable.  Why settle for less when you can have more?

Not everyone wants to have a $15,000 middle class lifestyle.  Nor do they want to drive a 19 year old pickup truck.  Yes, they would be Retired but most people wouldn't consider that lifestyle Winning.


firewalker

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Re: Why Are So Many Doing "One More Year"?
« Reply #15 on: March 07, 2015, 09:07:17 AM »
A review of these forums tells me that we all apply its value to different ends. For some, the pure MMM model. For others, getting out of debt. Still others would like to live a wealthy retirement which may require more than OMY. The same knowledge and tools with different goals.

Eric

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Re: Why Are So Many Doing "One More Year"?
« Reply #16 on: March 07, 2015, 09:19:53 AM »
Once one has enough to secure retirement (which seems to be commonly defined as a 4% SWR) some people aspire to have a bit more.  And there is absolutely nothing wrong with that.  Aspiring to do better is laudable and commendable.  Why settle for less when you can have more?

Not everyone wants to have a $15,000 middle class lifestyle.  Nor do they want to drive a 19 year old pickup truck.  Yes, they would be Retired but most people wouldn't consider that lifestyle Winning.

And most people work until they're 65 all while spending everything, saving almost nothing, and complaining about it the whole time.  Who gives a shit what most people would do or think?

You can always have more money.  Money is infinite.  It's time that's finite.  Choosing to "settle for less when you can have more [money]" is completely backwards, as you're valuing the unlimited resource above the limited one.

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Re: Why Are So Many Doing "One More Year"?
« Reply #17 on: March 07, 2015, 09:41:30 AM »
... If our example retires today, they can withdraw $40k a year, perfect right?  BUT if they wait one more year things look more like this:

Additional Savings: $60,000
Additional earings: $100,000
OMY Stache': $1,160,000

Which would support a withdrawal of $46,400 vs $40,000 or a 16% increase for waiting only one more year, and that 16% increase that will continue on forever and compound (theoretically).


If your example person chooses to do that, it's that person's decision BUT let's make sure we include in this analysis the other side of the equation.  This person may be increasing their withdrawals by 16% in exchange for doing OMY. BUT that person is also DECREASING his limited remaining freedom time by that same year.  So the question becomes whether not having that year is adequately compensated by having an extra $6400 a year to spend.  To me, time is always more valuable.  Because, as Eric correctly has pointed out (above), time is finite and limited.  And I want all I can get.

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Re: Why Are So Many Doing "One More Year"?
« Reply #18 on: March 07, 2015, 10:15:31 AM »

If FIRE is about having the option to retire, then you've made it.  To me OMY is about using that freedom and choosing to go ahead and still work.

The other thing, as I've gotten closer to FIRE, is that work isn't nearly as bad as it used to be.  For one thing, I just don't do things that I don't want to do.  They can F'ing fire me, I've got enough saved to live for decades.  I come in late, I leave early if I want to.  All my work gets done, I don't put up with any bullshit.  A frugal lifestyle has already granted me many of the benefits of being retired.  Knowing I'm almost done, I don't stress about "developing my career" the way some of these others do.  I'm not going to do this for another 30 years, no matter what.



This is so true.  We are teetering on the edge of FI.  If we work for another 2 1/2 years we will be in a great position vs. a just ok one and that is worth it.  That is especially true because when you are even on the edge of FI, you gain so much freedom at work.  The freedom to say no.  The freedom from striving for promotions.  And for some reason, people can sense it and you get treated much better too.

Retire-Canada

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Re: Why Are So Many Doing "One More Year"?
« Reply #19 on: March 07, 2015, 10:43:36 AM »
Not everyone wants to have a $15,000 middle class lifestyle.  Nor do they want to drive a 19 year old pickup truck.  Yes, they would be Retired but most people wouldn't consider that lifestyle Winning.

Nobody is forced to set their COL at $15K/yr. I'd be FIREd at that level. I'm shooting for $30K-$40K/yr for just myself and my cat.

The point is once I have reached reach 25X that amount I'm working for reasons other than the need to accumulate more money.

Fear, greed, love of work, etc...

-- Vik

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Re: Why Are So Many Doing "One More Year"?
« Reply #20 on: March 07, 2015, 11:28:53 AM »

If FIRE is about having the option to retire, then you've made it.  To me OMY is about using that freedom and choosing to go ahead and still work.

The other thing, as I've gotten closer to FIRE, is that work isn't nearly as bad as it used to be.  For one thing, I just don't do things that I don't want to do.  They can F'ing fire me, I've got enough saved to live for decades.  I come in late, I leave early if I want to.  All my work gets done, I don't put up with any bullshit.  A frugal lifestyle has already granted me many of the benefits of being retired.  Knowing I'm almost done, I don't stress about "developing my career" the way some of these others do.  I'm not going to do this for another 30 years, no matter what.



This is so true.  We are teetering on the edge of FI.  If we work for another 2 1/2 years we will be in a great position vs. a just ok one and that is worth it.  That is especially true because when you are even on the edge of FI, you gain so much freedom at work.  The freedom to say no.  The freedom from striving for promotions.  And for some reason, people can sense it and you get treated much better too.

I've found this to be true as well.  I've done very well the past 4-5 years at work and really built up a nice stache.  While still 4-5 yrs from hitting the 25x number, I find myself in the position of knowing I have flexibilty... Work from home?  Sure.  Skip the BS meeting?  Yup.  Just focus on activities that bring in the best commission?  Absolutely.  Pick up the kids from school?  Every day. 

While my spending would be high on this board (still getting the wife on board), MMM has given me the confidence to know that I will be retired in my 40s and the freedom to be a swami at work.  It's a wonderful realization!

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Re: Why Are So Many Doing "One More Year"?
« Reply #21 on: March 07, 2015, 03:03:58 PM »
Nobody is forced to set their COL at $15K/yr. I'd be FIREd at that level. I'm shooting for $30K-$40K/yr for just myself and my cat.

The point is once I have reached 25X that amount I'm working for reasons other than the need to accumulate more money...


Exactly.  The OMY issue really doesn't have anything to do with a person's COL level.  Whether it's $15,000 or $150,000, the issue is WHY do people -- who say they want to retire -- still stay at their jobs once they've built enough savings to fund their COL.

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Re: Why Are So Many Doing "One More Year"?
« Reply #22 on: March 07, 2015, 03:38:40 PM »
Exactly.  The OMY issue really doesn't have anything to do with a person's COL level.  Whether it's $15,000 or $150,000, the issue is WHY do people -- who say they want to retire -- still stay at their jobs once they've built enough savings to fund their COL.

Maybe because they aren't quitters.  They have won the game.  They have enough money to retire.  Now they aspire (good word - a word for winners) for more.

Having enough to cover one's COL is nice.  Having more is even better.

Perhaps Gordon Gekko said it best -- "The point is ladies and gentlemen that greed, for lack of a better word, is good."
« Last Edit: March 07, 2015, 04:02:59 PM by Dimitri »

Cassie

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Re: Why Are So Many Doing "One More Year"?
« Reply #23 on: March 07, 2015, 05:31:09 PM »
For some people volunteering & joining clubs are not as mind stimulating as actually working. This is why many decide to semi-retire. Nothing wrong with the aforementioned items-my Mom was really happy in retirement being active in these things but I was not. I find a lot of volunteer work is menia, mind numbing work.  I do some volunteer work but still need other things. My full retirement only lasted 6 months.  Of course $ is the other issue because it is nice to be secure that you have enough. Some people have so many hobbies they don't have time to work-me-my house was too clean, doing volunteer work & I still had extra time.

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Re: Why Are So Many Doing "One More Year"?
« Reply #24 on: March 07, 2015, 08:10:30 PM »
I think ... it's one thing to br given $100K from a perceived limitless pool, and put away $60K and live on $40K.  And it's entirely another to look at a spreadsheet that tells you you can withdraw $x a year for life, period, from a finite supply of money that belongs to you and is entirely your responsibility.   $40K is not $100K, and no matter what you've been doing with the extra $60K, the idea that you're really, truly only going to have $40K -  and you're going to have to stop adding that amazing $60K and actually draw it down seems, maybe ... slightly overwhelming.  And if you're a mustachian child, you've probably been carefully NOT touching that piggybank for a long, long time. The whole point has been Not to touch it.

I have to admit that seeing my bank balance rise every month was linear, simple, it was both reassuring and filled me with a sense of pride and accomplishment that's difficult to reproduce.  The idea of my 'salary' being produced by my own assets, as well as losing those stellar gains in bank balance, was uncomfortable to get accustomed to.
« Last Edit: March 07, 2015, 08:26:16 PM by frufrau »

Etihwdivadnai

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Re: Why Are So Many Doing "One More Year"?
« Reply #25 on: March 07, 2015, 11:53:19 PM »
From my perspective there was no single cause of doing One More Year (actually 3 more years).

Yes, fears (various) were part of the reason:
a) fear of running out of money during retirement
b) fear that I might not be able to regain the same level / type of employment
c) fear that historical SWR was not necessarily going to be valid going into the future

But there was also the fact that I still enjoyed my job and working with my friends / colleagues.

There was also the thought that a little more money during retirement might not be a bad thing.
(That's very un-MMM, I know, but I like a little bit of luxury / frivolous spending :-)

We hit our target number of 25x our estimated/desired target income (i.e. 4% SWR) in March 2012.
We had already been tracking our spending for 2 years so we had a bit of confidence in the estimate.

But I then began researching ER rather more intently.
Wade Pfau's research seemed to show that, while 4% SWR might have been historically valid for US based investment portfolios,
a 3.77% SWR was the correspondingly lower value for the UK.

Hence the next three "One More Year(s)" up to March 2015.
At which point, based on another 3 years of actual spending data
and upon a 33% increase in our retirement funds, we hit a WR of sub 3%
with a greater level of confidence that this was enough.

So I/we have traded 3 years x 2 people's life to achieve this
but we have done this in the knowledge that it buys us a greater level of confidence and/or comfort in our retirement.
(It also happened to coincide with a redundancy and the end of a fixed-term contract.)


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Re: Why Are So Many Doing "One More Year"?
« Reply #26 on: March 08, 2015, 12:19:21 AM »
...
There was also the thought that a little more money during retirement might not be a bad thing.
(That's very un-MMM, I know, but I like a little bit of luxury / frivolous spending :-)
...

Kudos.  And thank you.  You've helped me to confirm that a little bit more is something that we all want.  And believe me, I'm 100% with you on that.

Yes, I could be Retired but I sure wouldn't consider my self Winning if I quit the game with 25x my annual spend.

To quote the one and only Gordon Gekko -- "The point is ladies and gentlemen that greed, for lack of a better word, is good."

More is the difference between quitting the game and WINNING the game.

And, as we all know, winners never quit and quitters never win.  A little bit more is the difference between being a Winner and a Loser.  You are a Winner.  You played the game and won. 
« Last Edit: March 08, 2015, 12:22:48 AM by Dimitri »

rtrnow

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Re: Why Are So Many Doing "One More Year"?
« Reply #27 on: March 08, 2015, 07:52:19 AM »
Exactly.  The OMY issue really doesn't have anything to do with a person's COL level.  Whether it's $15,000 or $150,000, the issue is WHY do people -- who say they want to retire -- still stay at their jobs once they've built enough savings to fund their COL.

Maybe because they aren't quitters.  They have won the game.  They have enough money to retire.  Now they aspire (good word - a word for winners) for more.

Having enough to cover one's COL is nice.  Having more is even better.

Perhaps Gordon Gekko said it best -- "The point is ladies and gentlemen that greed, for lack of a better word, is good."

Did you really just call MMM and me for that matter a quitter (in a negative way) because we ER? It sounds to me like your whole identity/self-worth is tied to your job, sounds sad to me. I'm a quitter (from the office grind that is) and proud of it!!!!

ender

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Re: Why Are So Many Doing "One More Year"?
« Reply #28 on: March 08, 2015, 08:32:02 AM »
I hope to be a "1/2 more year" person, working part time to bridge the gap.

Whether that's 6 months FT, 6 months off, or 20/32 hour weeks, or something I don't know as it's a ways off.


Villanelle

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Re: Why Are So Many Doing "One More Year"?
« Reply #29 on: March 08, 2015, 09:02:57 AM »
Why do you think so many people suffer from One More Year syndrome?  They'll say that they want to retire.  They'll even say that they have enough savings to retire.  But instead they decide to stay on the job "one more year."  Which they may repeat and repeat.  Why is that?

I think the reason is fear.  As I see it, it could be fear of running out of money, or of losing one's status or identity, or of becoming socially isolated, or of being bored.  Or even just plain fear of the unknown.  And it seems to me so sad that people should let themselves get held back that way.  Because I can think of all kinds of ways to overcome such fears.

I have a "Plan B" for expenses in case my financial planning is off.  My wife -- just retired from a high-profile professional position -- has gotten herself new hats to wear as a church committee leader and as a volunteer county environmental safety board member. Our friend Mike seems to always be doing something or going somewhere with a bunch of people from one of the many clubs he belongs to.  And I can't imagine how I could ever get bored when there's so much for me to see, do and learn.

And that's just a quick list of "fear fixers" off the top of my head.  I'm sure you've already thought of many other ways to overcome the worries or fears that could hold you back from embracing retirement.

So, I've got to ask again.  Why do you think so many people let themselves get trapped into OMY?  And why do they find it so hard to overcome that?

My dad his un-retired many times.  In his 70s, he still working a part time job, despite having a positive cash flow (so I guess that's a 0% or even a -x% SWR, due to 2 defined benefit pensions, investments, and a few other things) even in retirement.  My parents are more than set, financially.  He likes working. He gets a great deal of satisfaction from him, and it is an intellectual exercise.  He does other things to that end, such as serving on the board of his very large community, which is probably about 10 hours a week minimum.  I remember when he retired and how excited he was to be done, and how he just couldn't wait.  But I think he quickly realized that what he hated was that particular job and the 50 hours+ a week and the stress, and that there was work out there that didn't have those things.  For a while, he went back to a 40 hour job after a previous boss who was at a new org called and begged  and made him an offer.  He came back with what he thought was a ridiculous counter offer, and they accepted. 

I suspect DH will be similar.  He works in a field where it is more than just a job, doing the job he dreamed of since childhood.  As such, his work has become very tied to his identity.  Even when he doesn't have this specific work anymore, I think he will want some work, and I suspect that in his mind, paid work will feel "More" than gardening and figuring out how to build a shed and serving on a community board. 

It isn't always about fear, or even about buying more, or "winning".

That said, for me, there will always be fear.  I am a what-ifer and a catastrophic thinker.  For me, the numbers on the spread sheet will never prevent that niggling "what if" voice.  I recognize that trait in my and can somewhat rein it in, but if I planned to retire at 30 (which I've already passed!), it would be terrifying to me to live on a 4% SWR.  I get that it isn't entirely rational.  But I'd still be spending much of my time stressing about money, and for me, the main attraction of all this saving and minimizing is that I never have to feel money-related stress.  An extra year of working, for me, is well, well worth not fretting over every penny, which is what I would do in a more conservative retirement. 

tomsang

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Re: Why Are So Many Doing "One More Year"?
« Reply #30 on: March 08, 2015, 09:19:10 AM »
The future is vague in many ways. Earning extra when the money is flowing at the peak is easier than contemplating re-entering the workforce in the future. If I needed to re-enter I would most likely make between 1/10 to 1/5 what I currently make depending on the length of unemployment.

As I contemplate the future some areas stick out.

1) Taxes - In the US our national deficit is approaching $20 trillion. Our taxes are at an all time low. If taxes are increased this will have a huge impact on my SWR. I also am planning on a yearly COL spend that is 5+ times MMM which puts us in a situation to pay taxes. The question is how much?

2)  Income inequality has been expanding. I have been fortunate to benefit from this, but I worry about my 4 children. What can I do to help them during this turbulent times. We have money set aside for their colleges. Do we help with a downpayment for a house? Do we fund their kids' education which currently don't exist? Do we have enough funds for their weddings and other special events? Again this can be accomplished with one extra year.

3) Charity. I have worked hard, but I am also very fortunate to obtain a level of income that puts me in the 1%. As SOL mentioned in various posts, working an extra year or more can put you in a situation to make a large impact on society. Sacrificing a few years when you are 45 is not too extreme when you can make a huge difference. My retirement has a budget of $12,000 a year to charity. If I worked five extra years I could crank that up to $100,000 a year.

4) Time to mentally prepare for retirement. Our friends are probably 20 years out. How will that change the dynamic?  Kids are still in school limiting our longterm travel.

5) Do we buy the finer things in life? A nice house can be had for $500k or we could work two extra years and buy a house with a 270 degree view of the Puget Sound and the mountains. Something that we would enjoy for the next 50 years. Same thing with artwork and furnishings.

6) Life is great. Why rush the next phase?

Sofa King

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Re: Why Are So Many Doing "One More Year"?
« Reply #31 on: March 08, 2015, 08:32:38 PM »
Once one has enough to secure retirement (which seems to be commonly defined as a 4% SWR) some people aspire to have a bit more.  And there is absolutely nothing wrong with that.  Aspiring to do better is laudable and commendable.  Why settle for less when you can have more?

Not everyone wants to have a $15,000 middle class lifestyle.  Nor do they want to drive a 19 year old pickup truck.  Yes, they would be Retired but most people wouldn't consider that lifestyle Winning.

And most people work until they're 65 all while spending everything, saving almost nothing, and complaining about it the whole time.  Who gives a shit what most people would do or think?

You can always have more money.  Money is infinite.  It's time that's finite.  Choosing to "settle for less when you can have more [money]" is completely backwards, as you're valuing the unlimited resource above the limited one.


I concur!

UnleashHell

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Re: Why Are So Many Doing "One More Year"?
« Reply #32 on: March 09, 2015, 07:38:03 AM »
I have a target date for retirement – the investments I’ll  have should cover my budget nicely – but I want a few things like travel (Europe etc) in the first few years that will be difficult to do with the budget I have.
I would consider working an extra few months purely for accumulating extra travel cash. In addition an extra 6 months of investing would bump my monthly budget too..


Or I’ll quit and make the wife carry on working….

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Re: Why Are So Many Doing "One More Year"?
« Reply #33 on: March 09, 2015, 09:06:44 AM »
I agree that fears (not enough, what ifs, etc) , not knowing what to do with one's life, and altruistic purposes (funding college for others, charities, etc) are definitely the major drivers. The only other (potentially smaller) point I would like to contribute would be that humans in general have a tough time making any kind of change, nevermind one which is so large. As an example, think about how often humans make new years resolutions and think about how often those resolutions are followed through.

Most on this board are highly self-motivated, smart, industrious, and have been working/saving/investing for a number of years. It can sometimes be tough to pull a complete 180 and tell yourself that you can relax / that you've earned it.


Kansas Beachbum

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Re: Why Are So Many Doing "One More Year"?
« Reply #34 on: March 09, 2015, 12:49:10 PM »
We struggle with this, I have to admit.  However, we (Mrs. KBB and I) DID both take a voluntary separation offer from our employer end of last year and have been happily unemployed since then...full year of severance and benefits, so easy decision given our $1.25M in savings.  We are looking for work, but only for OMY really.  OMY for us as that's when our youngest will graduate from HS.  We won't move to where we want to be until she's out of school, won't do that to her, so we figure we might as well make as much money as we can for the next year and a half that we're here...pay off the beach house perhaps.  Even after we move we will work doing something, not in OMY, corporate profession kind of jobs, but something we like.  Part of it now is lifestyle.  We like to travel, and although we are frugal in most other areas, I have a bad case of wanderlust. 

MrsPete

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Re: Why Are So Many Doing "One More Year"?
« Reply #35 on: March 09, 2015, 12:58:26 PM »
Optimization. 

I have enough right now to quit and live comfortably.  But I'm probably going to be on this earth at least 50 more years, and things can change in 50 years -- inflation is a scary thing.  While I could quit now, doing a couple more years means I can quit with greater confidence. 

Efficiency. 

I am already in a job I know and like, with people I know and like.  It's more efficient for me to knock out a couple more years here than to try to find another job elsewhere later.  And it's more efficient for me to work for this pay grade for a couple more years than to pick up a part-time job that'll pay less . . . and keep it for years and years and years. 

What other people think or do doesn't even score a blip on my radar. 


Kansas Beachbum

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Re: Why Are So Many Doing "One More Year"?
« Reply #36 on: March 09, 2015, 01:04:58 PM »
What other people think or do doesn't even score a blip on my radar.

Amen MrsPete! 

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Re: Why Are So Many Doing "One More Year"?
« Reply #37 on: March 09, 2015, 02:26:21 PM »
I could easily retire today and be fine. My OMY fears are several:

1. we have a history of deadbeats in my family who really never worked. they had trust funds and then never did anything constructive with their lives. they are now in their 60s and the trust funds are running low due to not adhering to the 3% rule and are more than likely going to not be OK financially. seeing this makes me nervous and then being judged by others in my family that I am headed down the same path I keep on trudging. work is OK sure but I'd love to be hiking near daily.

2. can I really find enough to keep me active 8 to 5 M-F? I think I could but with a limited budget to maintain it wouldn't be the travel that I get to take now while I work.\

3. health care. sure we have the ACA now but I'd have to go out in the market place for my health care. Working in health care I see possible HUGE expenses. So many what ifs - what if I get cancer, what if I get parkinsons, what if I have a stroke at 60. these things all point to retiring now because I'm healthy and can have some years of health, but also not having a job would mean very expensive self paid health care.

CCCA

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Re: Why Are So Many Doing "One More Year"?
« Reply #38 on: March 09, 2015, 03:10:21 PM »
I just posted this on another thread about kids, but I thought it would be relevant here as well. 
If you have a reasonably large stash (lets say over $1M), then each additional year could pay for multiple years of college for your kids. 
$1M x 5-8% rate of return = $50k to 80k.  Given that college costs range from $20k to 60k/yr, you can pay for an entire child's education at a cheap public institution and maybe a year at the most expensive institution.   



RootofGood

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Re: Why Are So Many Doing "One More Year"?
« Reply #39 on: March 09, 2015, 07:54:30 PM »
I get the one more year thing.  Even though we're down to somewhere between 1.4% to 2.2% WR at the current (bare bones + mini-luxuries) budget, it would always be nice to have another $100,000 or $200,000 or $300,000, etc. 

I also understand the need to work for fulfillment, intellectual stimulation, or as a salve for boredom. Not that I personally get bored or need a job to fill the time, but I enjoy the very very part time 2-4 hours per month I spend on a freelance project.  A few hours per month is plenty for me, but maybe others want 10 hrs/wk or 40 hrs/wk to keep themselves occupied.


lavidaportland

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Re: Why Are So Many Doing "One More Year"?
« Reply #40 on: March 09, 2015, 08:03:22 PM »
I'm about four years away from FI, but I don't think I'll do One More Year. I'm a software dev (programmer), and in the back of my mind I know I can always pick up work if I'm drawing down faster than I expected.

PatStab

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Re: Why Are So Many Doing "One More Year"?
« Reply #41 on: March 09, 2015, 08:59:26 PM »
My husband worked the 2 more years.  We ended up moving, not the plan, we had rent houses and a projected income of $10k per month, in great shape.

His mom is either getting dementia or alzheimers, and we have a mentally challenged daughter that we agonized over.  If we stayed in Texas after we died not a soul around that new or cared about her.  We ended up moving back, with our income in retirement now down and return near 0, we decided the best way was just add to our stash of $1M.  We should have more, we have spent a lot the last few years.  Last years tax return said $250k gross and this is his highest, he is having a hard time giving that up.  They just renewed his visa for another project, its to only run 1.5 years.  He was to retire at year end but I'm betting end of next year.  We are planning on buying a small house or something in Florida to live in for 3 months of the year.  We could get an RV lot but the kids might want to use it and the house would be better.  We just keep wanting things, we are also finishing a rent house up here if it goes well may buy another, we are both 69 this year. And our son at age 46 is going to have a baby.  We have a little over $100k in I bonds that we figured we would use last or pass on, but now might want to keep them to pay for college for grandson, they are earning like gangbusters.  In 20 more years likely another $100k for him.  So many reasons.

ender

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Re: Why Are So Many Doing "One More Year"?
« Reply #42 on: March 10, 2015, 05:43:22 AM »
I just posted this on another thread about kids, but I thought it would be relevant here as well. 
If you have a reasonably large stash (lets say over $1M), then each additional year could pay for multiple years of college for your kids. 
$1M x 5-8% rate of return = $50k to 80k.  Given that college costs range from $20k to 60k/yr, you can pay for an entire child's education at a cheap public institution and maybe a year at the most expensive institution.   


This is an interesting way to think about it.

2lazy2retire

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Re: Why Are So Many Doing "One More Year"?
« Reply #43 on: March 10, 2015, 06:45:27 AM »
I also think the kids factor comes into play. A couple of more years would enable us to have a nice fund available to help them out if the need arises, house purchase start a business whatever. I have been fortunate in that my position/salary allows me to FIRE relatively early and looking at some of the salaries out there I think it would be more difficult for them to accumulate a stash in a similar time frame, maybe a nice fund when the reach 40 to give them options - only if they need it of course.
On the flip side we both have aging parents in our home country which pulling the plug now would enable us to spend more time with, but as with some families I'm not sure they want us hanging around indefinitely - they love to see us coming to visit, but equally I suspect they also like to get their own lives back when we leave.
The other issue I have is with the whole "you can always go back to work" option that gets put out on these forums, it is totally not for me. I would never get anyway near my current pay and the fact that you NEED to go back to work would put a whole different slant on things, going through all that BS with a new employer knowing I need a job - f@ck that - OMY is my current cushy number seems a lot less painful.

ColorOfCash

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Re: Why Are So Many Doing "One More Year"?
« Reply #44 on: March 10, 2015, 08:56:54 AM »
I'm not at FI kind of money yet, but with my side hustles I'm covering all our bills and saving some. It's changed my relationship with my day job and changes the job to be one of a lever that can do big things every month (e.g.: buy a newer car for cash next month with 1-2 months of income). It's also at the point where I'm knowledgable enough about my position that I can get it done in 1/8th the time of others, I do my magic and they're happy as can be.

As other said, I've got these as well:

- Kids in school right now so tied to a location (homeschooling didn't go well for 1 of our kids)
- Wife with medical issues and "security gland" concerns, better to stay at a full-time job to keep her nerves in check while she gets more comfortable as we get to FI.
- Father who lives off social security disability, helps others but not taking care of himself.
- Benefits at work, they flew me to a conference 2 weeks ago and I got to see my old college, planning to do the same in the fall and visit family. Flights are my choice and not part of my day-to-day work. Going to a casino buffet and a baseball game on the company dime tomorrow.
- Stock Options aka Golden Handcuffs. Every year they get heavier, need to decide when to unshackle myself.

rockstache

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Re: Why Are So Many Doing "One More Year"?
« Reply #45 on: March 10, 2015, 10:22:06 AM »
...
There was also the thought that a little more money during retirement might not be a bad thing.
(That's very un-MMM, I know, but I like a little bit of luxury / frivolous spending :-)
...

Kudos.  And thank you.  You've helped me to confirm that a little bit more is something that we all want.  And believe me, I'm 100% with you on that.

Yes, I could be Retired but I sure wouldn't consider my self Winning if I quit the game with 25x my annual spend.

To quote the one and only Gordon Gekko -- "The point is ladies and gentlemen that greed, for lack of a better word, is good."

More is the difference between quitting the game and WINNING the game.

And, as we all know, winners never quit and quitters never win.  A little bit more is the difference between being a Winner and a Loser.  You are a Winner.  You played the game and won.

I couldn't disagree with this overall philosophy more. I mean the whole message behind MMM is about being contented with the important things in life (whatever it is that you value). Yes, it is human nature to always want more. In my opinion though, that is something to overcome, not something to encourage or give in to. Greed is not good.

NoraLenderbee

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Re: Why Are So Many Doing "One More Year"?
« Reply #46 on: March 10, 2015, 11:38:00 AM »
I'm doing one more year--actually, several more years--because I don't have enough money yet.


The other issue I have is with the whole "you can always go back to work" option that gets put out on these forums, it is totally not for me. I would never get anyway near my current pay and the fact that you NEED to go back to work would put a whole different slant on things, going through all that BS with a new employer knowing I need a job - f@ck that -

Same here. Plus I'd much rather work for my current salary than do some shit job for $10/hr when I'm 60. I might cut back to part-time at some point, but once I quit working, that's IT. I don't ever want to NEED to go back to work. 
Also, age discrimination is very real. It is harder to get a job at 50 than at 30. It is even harder if you've been out of the workforce for a while. Don't kid yourselves.

CCCA

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Re: Why Are So Many Doing "One More Year"?
« Reply #47 on: March 10, 2015, 12:18:13 PM »
 Thinking about this some more made me pull out the spreadsheet. 
Once you have a reasonably large stash, each extra year of working gives you two things,
  • (1) additional savings, and
  • (2) greater investment growth on your stash.
If you are around the magic number of 25x expenses, the amount that you add from each of these sources will vary depending on the savings rate (1) and investment rate of return (2).


I made a spreadsheet that looks at how much you can add to your stash from each of these sources.  See attached picture. 

Table 1 shows the ratio of stash increase from investments vs savings and Table 2 shows the ratio of total stash increase (investment+savings) to annual expenses.

On the top, (in blue) you have different rates of returns on an example stash of $1M.  On the left side (in purple) you have different savings rates (and the amount of savings that can be added to your stash each year). 

Simple assumptions are $1M stash and $40k/yr in expenses (but it doesn't really matter as one is just 25x the other, and the ratios in the table don't change if you change the stash size as long as its 25x the annual expenditure).  In each table, the blue across the top is the investment returns added to the stash and the purple across the left is the savings added to the stash.


The key takeaways in Table 1 are that investments are a key driver for Stash growth once you are near FIRE for a wide range of assumptions.  And the key takeaway for Table 2 is that each additional year of work can potentially fund multiple years of retirement across a wide range of input assumptions. 

sol

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Re: Why Are So Many Doing "One More Year"?
« Reply #48 on: March 10, 2015, 02:14:11 PM »
In addition to those two benefit, each additional year also buys you one less year of life that you need to cover from assets.  So maybe you now have a 29 year time horizon instead of 30 years.

Whether that is a good or bad thing kind of depends on your perspective.

SugarMountain

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Re: Why Are So Many Doing "One More Year"?
« Reply #49 on: March 10, 2015, 02:27:44 PM »
I'm doing one more year--actually, several more years--because I don't have enough money yet.


The other issue I have is with the whole "you can always go back to work" option that gets put out on these forums, it is totally not for me. I would never get anyway near my current pay and the fact that you NEED to go back to work would put a whole different slant on things, going through all that BS with a new employer knowing I need a job - f@ck that -

Same here. Plus I'd much rather work for my current salary than do some shit job for $10/hr when I'm 60. I might cut back to part-time at some point, but once I quit working, that's IT. I don't ever want to NEED to go back to work. 
Also, age discrimination is very real. It is harder to get a job at 50 than at 30. It is even harder if you've been out of the workforce for a while. Don't kid yourselves.

Exactly.  Some of this may be demographics on these forums, if you're in your mid 30s making $100k, leaving for a couple of years and then trying to go back and earn close to that is probably pretty doable.  If you're 50+ making $200k, that is much less true.