Why Don't More People Seek Earlier Retirement?

[sheepstache]

I think anchoring is an important concept that addresses things a little more broadly than just peer pressure.  I was keenly putting money into an IRA and wasn't big into spending money, but the idea that I might get a net worth in the 6 figures any time soon seemed like an alien concept. Yet to people who handle large amounts of money and talk about it, it wouldn't seem so strange. And now when I hear about my friends' finances I'm like, 'This is so weird. Why wouldn't you be able to come up with $10,000 in a year?'

Also, for young people, there are so many unknowns in life, so I think even the thrifty ones who have excess cash find it much easier to stash it in a savings account than risk it in the market.

And then you run into articles like this:
http://finance.yahoo.com/news/robert-shillers-depressing-advice-investors-130622396.html

Can't imagine why people feel antsy. :-/

Did they just say Robert Shiller's new book is going to "drop" next month? Like a hot mix tape? Oh, Yahoo Finance, never change.

Let me put it this way.  I recently completed a degree in Finance.  Did we study Jim Cramer?  No. Did we read about Dave Ramsey? Hell no.  Did we learn about Robert Schuller?  Um yeah.  He won a Nobel prize in Economics for fucks sake!

So, yeah, I ignore 99% of what is written, but not this guy.  Doesn't mean I'm going to blindly follow him either, but I'm not ignoring it.  (Not that it's a completely new idea, it's not by a long shot.)

Oh, word, son, he's the grand mac daddy of dope economic shiznits. No doubt he should be dropping sick theories on the regular.

I'm just making fun of the slang word choice applied to a dorky Nobel prize winner. Like, the editor told the interns, "Listen, there's this Yale professor I've never heard of, could you make him sound more hip? Ya know, like, more like Jim Cramer?" Or that these interns are like legit mad fucking excited about Shiller, suggesting that someone over there has a clue.

[sirdoug007]

What Shiller is saying now is that bonds are overvalued.  It's not clear to me how rising bond yields would affect stock values but it's more so bonds than stocks he is ringing the warning bell about.

http://www.cnbc.com/id/102421990#.

[toodleoo]

When I first stumbled upon this site, I was excited and overjoyed, but part of me was angry. I thought I had been doing all the right things. I was maxing out a Roth IRA, contributing to my employer's 401(k) enough to get the full match, and didn't have any credit card debt. All of the things the experts tell you to do. But yet, had I known that you could take this to a whole new level and get years, even decades, of your life back, I would have leapt in and never looked back. I could have saved so much more money and time...I try not to be angry about it anymore since what's done is done, but we really need to get this message out there.

[malligator]

When I first stumbled upon this site, I was excited and overjoyed, but part of me was angry. I thought I had been doing all the right things. I was maxing out a Roth IRA, contributing to my employer's 401(k) enough to get the full match, and didn't have any credit card debt. All of the things the experts tell you to do. But yet, had I known that you could take this to a whole new level and get years, even decades, of your life back, I would have leapt in and never looked back. I could have saved so much more money and time...I try not to be angry about it anymore since what's done is done, but we really need to get this message out there.

At least you were doing the FI part. Now you've added the RE part. I wasn't doing either. I have too much debt and not enough savings so not only am I far from RE, but I'm not even FI. I am a recovering wage-slave.

[Milizard]

I think anchoring is an important concept that addresses things a little more broadly than just peer pressure.  I was keenly putting money into an IRA and wasn't big into spending money, but the idea that I might get a net worth in the 6 figures any time soon seemed like an alien concept. Yet to people who handle large amounts of money and talk about it, it wouldn't seem so strange. And now when I hear about my friends' finances I'm like, 'This is so weird. Why wouldn't you be able to come up with $10,000 in a year?'

Also, for young people, there are so many unknowns in life, so I think even the thrifty ones who have excess cash find it much easier to stash it in a savings account than risk it in the market.

And then you run into articles like this:
http://finance.yahoo.com/news/robert-shillers-depressing-advice-investors-130622396.html

Can't imagine why people feel antsy. :-/

Did they just say Robert Shiller's new book is going to "drop" next month? Like a hot mix tape? Oh, Yahoo Finance, never change.

Let me put it this way.  I recently completed a degree in Finance.  Did we study Jim Cramer?  No. Did we read about Dave Ramsey? Hell no.  Did we learn about Robert Schuller?  Um yeah.  He won a Nobel prize in Economics for fucks sake!

So, yeah, I ignore 99% of what is written, but not this guy.  Doesn't mean I'm going to blindly follow him either, but I'm not ignoring it.  (Not that it's a completely new idea, it's not by a long shot.)

Oh, word, son, he's the grand mac daddy of dope economic shiznits. No doubt he should be dropping sick theories on the regular.

I'm just making fun of the slang word choice applied to a dorky Nobel prize winner. Like, the editor told the interns, "Listen, there's this Yale professor I've never heard of, could you make him sound more hip? Ya know, like, more like Jim Cramer?" Or that these interns are like legit mad fucking excited about Shiller, suggesting that someone over there has a clue.

Lol

[sol]

I don't have 10-15 years of data yet, but for the three full years of tracking our expenses have not only not inflated, they've declined every year! I would expect it to eventually level out in the next few years, and then hold steady, but we'll see.

Sure, that's to be expected from someone who is transitioning away from a wasteful lifestyle.  But once you're spending has been optimized, do you really think you'll be 100% immune to inflation forever?

I think the issue with your spreadsheet is that it only increases the expenses for the case where you increase your income. 

My only point was that in order to stay on the same "years to retirement" curve, you have to increase your savings rate whenever you get a raise.  For someone who always saves 50% of their income as their income changes, that graph is wrong.

I've bolded one part where you've stated a condition that is actually more strict than necessary to preserve the same retirement date... if your only goal is to maintain the same retirement date throughout your working career, you can inflate your lifestyle when you get a raise -- but not by the entire amount of the raise.

Cathy's example of someone who gets a huge raise the last year of work is just an end-member case.  A more general solution is easy to come by, though, and it looks like the amount of your raise that you need to allocate to savings is a function of your current savings rate.  A 10% savings rate person who gets a 2% raise has their expenses go up 1.8%  A 90% savings rate person who gets the same 2% raise has their expenses go 0.2%.

It's just an algebra problem at this point, but a rough one because you need to know the relationship between "years to retirement" and expense increases.  For example my last post mentioned having to work 20 years instead of 16 years for a person saving 50% and getting 3% raises.  But a person only saving 10% is going to have their working career extended from 52 years (at no raises) to 85 years (at 3% raises).  So lower savings rates are hurt the most by raises, because most of the raise goes to expenses.

The moral here? Every time you get a raise, you'd better be sure most of it goes to savings instead of lifestyle inflation or else you're just lengthening your working career.

[Retire-Canada]

Talk about backwards -- you got a $25k raise this year, now you need to work longer for retirement!

I think this is an underappreciated point with this crowd. 

The graph from the Shockingly Simple Math article shows you how long you should have to work for a given savings rate, but it assumes you never get raises. 

In reality, I think most people will slowly inflate their living expenses and their wages will rise.  If you maintain a constant 50% savings rate and get a 5% investment return, the graph says you need to work 16 years.  But if you get a 3% raise every year and hold that same 50% savings rate, you've effectively increased your expenses by 1.5% per year so the target value of 25 times your expenses keeps going up, and suddenly you need to work 20 years instead of 16.  That's a 25% increase in working time over what this community commonly assumes (4 more years on top of 16).

The solution to this problem is that you cannot change your expenses when you get a raise, which means you effectively have to increase your savings rate every time you get promoted.  I think we can all agree that would be ideal, but over a 10 or 15 year working career I'm not sure it's reasonable to expect 0% inflation of your expenses unless they were already grotesque to begin with.

The spreadsheet attached lets you compare the size of a growing nest egg to your target retirement sum based on savings rate, investment return, and what kind of annual raise you get.   In every case except 100% savings, you retire faster if you never get raises.

The issue I have with this is that it assumes that your working living costs will be the same as your ER living costs.

I found that as I got paid more I incurred expenses that I wouldn't continue as a retired person [business lunches, nicer clothes, nicer car, etc..].

So let's say you start saving at a 50% savings rate and earned $80K. Your cost of living is ~$40K.

You earnings rise and you maintain a 50% savings rate..

- $90K = $45K/yr savings
- $100K = $50K/tr savings
- $120K = $60K/yr savings

You decide to retire and can live on the $40K/yr you started at since you don't have to spend any working/business related expenses and you have lots of time to find ways to save.

Your savings per year equalled or exceeded at 50% savings rate for a $40K cost of living so you'll actually be FI sooner than if you hadn't got a raise.


-- Vik

[dragoncar]

Talk about backwards -- you got a $25k raise this year, now you need to work longer for retirement!

I think this is an underappreciated point with this crowd. 

The graph from the Shockingly Simple Math article shows you how long you should have to work for a given savings rate, but it assumes you never get raises. 

In reality, I think most people will slowly inflate their living expenses and their wages will rise.  If you maintain a constant 50% savings rate and get a 5% investment return, the graph says you need to work 16 years.  But if you get a 3% raise every year and hold that same 50% savings rate, you've effectively increased your expenses by 1.5% per year so the target value of 25 times your expenses keeps going up, and suddenly you need to work 20 years instead of 16.  That's a 25% increase in working time over what this community commonly assumes (4 more years on top of 16).

The solution to this problem is that you cannot change your expenses when you get a raise, which means you effectively have to increase your savings rate every time you get promoted.  I think we can all agree that would be ideal, but over a 10 or 15 year working career I'm not sure it's reasonable to expect 0% inflation of your expenses unless they were already grotesque to begin with.

The spreadsheet attached lets you compare the size of a growing nest egg to your target retirement sum based on savings rate, investment return, and what kind of annual raise you get.   In every case except 100% savings, you retire faster if you never get raises.

The issue I have with this is that it assumes that your working living costs will be the same as your ER living costs.

I found that as I got paid more I incurred expenses that I wouldn't continue as a retired person [business lunches, nicer clothes, nicer car, etc..].

So let's say you start saving at a 50% savings rate and earned $80K. Your cost of living is ~$40K.

You earnings rise and you maintain a 50% savings rate..

- $90K = $45K/yr savings
- $100K = $50K/tr savings
- $120K = $60K/yr savings

You decide to retire and can live on the $40K/yr you started at since you don't have to spend any working/business related expenses and you have lots of time to find ways to save.

Your savings per year equalled or exceeded at 50% savings rate for a $40K cost of living so you'll actually be FI sooner than if you hadn't got a raise.


-- Vik

They don't even have to be business expenses.  You can make a valid time vs. money argument as your income is rising.  As long as you're ok dumping the dry cleaners, car mechanics, lawn service, etc. once you retire.

[Zikoris]

I don't have 10-15 years of data yet, but for the three full years of tracking our expenses have not only not inflated, they've declined every year! I would expect it to eventually level out in the next few years, and then hold steady, but we'll see.

Sure, that's to be expected from someone who is transitioning away from a wasteful lifestyle.  But once you're spending has been optimized, do you really think you'll be 100% immune to inflation forever?

Hard to say. Our rent will increase by about inflation. Our groceries have been exactly the same for 3 years. I don't see our phone plans or internet increasing by a huge amount. Travel cost seems to be more influenced by the particular places we decide to go than any sort of inflation. That's the bulk of our spending there. I don't anticipate lifestyle inflation, but it will be interesting to see.

[deborah]

I don't have 10-15 years of data yet, but for the three full years of tracking our expenses have not only not inflated, they've declined every year! I would expect it to eventually level out in the next few years, and then hold steady, but we'll see.

Sure, that's to be expected from someone who is transitioning away from a wasteful lifestyle.  But once you're spending has been optimized, do you really think you'll be 100% immune to inflation forever?

Hard to say. Our rent will increase by about inflation. Our groceries have been exactly the same for 3 years. I don't see our phone plans or internet increasing by a huge amount. Travel cost seems to be more influenced by the particular places we decide to go than any sort of inflation. That's the bulk of our spending there. I don't anticipate lifestyle inflation, but it will be interesting to see.

Surely groceries will increase at least with inflation and your travel will too, once you have got them down as far as they will go? I know that with global warming the cost of raw food is expected to go up, and there have been signs of that over the past ten years. Where I live, entrance fees and camping fees for National Parks have gone up in the last couple of years.

[sol]

d]
I'd say this is a pretty significant development in retirement theory. The shockingly simple math is fundamentally incorrect.

Well I wouldn't go that far.  I already posted the spreadsheet that does all of these calculations, and we've talked about this effect here before.

It's most significant if you have low savings rates and/or high inflation rates, because both of those contribute to rapidly rising expenses.   If if the time unti you attain your target sum set by 25 times your expenses is rising faster than your increasing savings rate is reducing the time, then you fall behind with every wage increase. 

And as Jacob pointed out ages ago, as your savings rate approaches 100% all other variable become insignificant.  If you're saving 90% of your income, you can get 0% investment returns and 5% inflation and still retire in 3 years instead of the expected 2.5 years.

[deborah]

So that is why the Baby Boomers had problems ERing, and why it is much easier now! I remember mortgage interest rates at 18.5% (when I was buying my house), and inflation was double figures.

[tarheeldan]

The "shockingly simple math" works just fine.

You forgot to increase the investment returns rate so that it is 5% *above* the rate of inflation. Otherwise it's not a real rate.

In the 3% example, you have investment returns at only 5%, which is a real rate of just 2%.

You can have a 50% inflation rate and still retire in 21 years.

https://www.dropbox.com/s/73u007fz5zo73fv/FIRE_0.5SR_Inflation.png?dl=0

Spreadsheet:
https://www.dropbox.com/s/ejudfdlf1l9qera/FIRE_0.5SR_Inflation.xlsx?dl=0

[brooklynguy]

I'd say this is a fairly significant development in retirement theory. The shockingly simple math is fundamentally incorrect.

I wouldn't say there are any new developments here.  We always use the underlying assumption that one's expenses will perpetually remain stable (on an inflation-adjusted basis).  Avoiding lifestyle-inflation is a fundamental tenet of mustachianism and one of the premises behind the math of early retirement.  It usually goes without saying that permanently increasing your expenses will increase your required stash size and therefore prolong your working career.  But once you've established your personal spending equilibrium, the idea that anything less than 100% immunity to lifestyle-inflation is acceptable is anti-mustachian.

The concept of using a multiple of annual expenses to determine your required stash size inherently assumes that your future expenses will not increase (on an inflation-adjusted basis).  If you're not going to be tempted to allow outsized investment returns in retirement to inflate your spending levels (at least before the point when it has become clear that your portfolio is on a successful trajectory), then why are you going to allow increased income during your working years to do so?  One possible answer is that the psychology in the drawdown phase differs from that of the accumulation phase, and the fear of portfolio failure during retirement does a better job of keeping your spending in check.  But the during the accumulation phase, the desire to free yourself of the indentured servitude of employment can operate in the same way (with the effectiveness dependent on your level of dissatisfaction with your job).

Cathy, the connection you have drawn between "inflation" in the economic sense and "life-style inflation" is artificial.  As tarheeldan said, your analysis is ignoring the effect of inflation on investment returns.  In the real world, under normal economic conditions, investment returns will rise with inflation, so it doesn't make sense to theorize about situations where wages and spending levels both rise with inflation, but nominal investment returns do not.

[tarheeldan]

So the first thing to note is that MMM's model predicts 17 years for this case, so your method gives a longer working career in each case.

It turns out that this initial set of surprising results is just because your spreadsheet has an error in the "FIRE?" column. You check for 25 times of income rather than 25 times of expenses. After correcting that, however, your spreadsheet is still not invariant with respect to inflation. It instead gives the following results:

1% inflation ⇒ 16 years of work to retire
6% inflation ⇒ 15 years of work to retire
30% inflation ⇒ 14 years of work to retire
50% inflation ⇒ 13 years of work to retire

Oops! Yes, I screwed up the formula and replaced income rather than spending.

You used:

investment return = (portfolio size) * ((real rate of return) + (inflation ratio))


Upon reflection, both formulas are incorrect.

Nope, this was right. Real return = nominal return + inflation *rate*

I fixed it: https://www.dropbox.com/s/ejudfdlf1l9qera/FIRE_0.5SR_Inflation.xlsx?dl=0, and also conformed to not applying investment returns to this year's contributions and it looks like it replicates your results.


While years to FIRE is not insensitive to the inflation rate, it is highly inelastic. Varying the inflation from 5% to 100% only results in 2 more working years (15 vs 16)

[tarheeldan]

Gotcha, Cathy. Thanks for explaining, agreed!

[Albert]

Do you define lifestyle inflation as inherently negative? It often is, but not always. For example you might not have or want any kids, but then in your 30-ties change your mind. That will be a lifestyle inflation as well. Same goes with moving to a more expensive area for any legitimate non-monetary reasons or even just to get a higher paid job.

[dragoncar]

d]
I'd say this is a pretty significant development in retirement theory. The shockingly simple math is fundamentally incorrect.

Well I wouldn't go that far.  I already posted the spreadsheet that does all of these calculations, and we've talked about this effect here before.

Boom

http://forum.mrmoneymustache.com/investor-alley/instead-of-swr-how-about-a-ssr/msg120572/#msg120572

[sol]

Boom

http://forum.mrmoneymustache.com/investor-alley/instead-of-swr-how-about-a-ssr/msg120572/#msg120572

Yes, a good example.  And there are others.  I know it's come up a few times with bo_knows in the context of cFIREsim, too.

As brooklyn pointed out, nobody here should be using the simple math post to determine a retirement date anyway.  That requires making your own spreadsheet, accounting for your own expenses and investment returns over specific defined months, and tracking the resulting balances under your proposed drawdown schemes as your hypothetical retirement plays out.   

All of these rules of thumb are fine guidelines, but they don't represent an actual plan.

[ender]

The point of the shockingly simple math article isn't to get a sure-fire, 100% guaranteed "only going go take me 17 years to retire!" statement.

It's to realize how dramatically your savings rate is correlated with how long you have to work.

[ChrisLansing]

When I first stumbled upon this site, I was excited and overjoyed, but part of me was angry. I thought I had been doing all the right things. I was maxing out a Roth IRA, contributing to my employer's 401(k) enough to get the full match, and didn't have any credit card debt. All of the things the experts tell you to do. But yet, had I known that you could take this to a whole new level and get years, even decades, of your life back, I would have leapt in and never looked back. I could have saved so much more money and time...I try not to be angry about it anymore since what's done is done, but we really need to get this message out there.

“Of all sad words of tongue or pen, the saddest are these, 'It might have been.”

I could almost cry over the missed opportunity, but what good would it do?   

[arebelspy]

“Of all sad words of tongue or pen, the saddest are these, 'It might have been.”

I could almost cry over the missed opportunity, but what good would it do?   

[ChrisLansing]

“Of all sad words of tongue or pen, the saddest are these, 'It might have been.”

I could almost cry over the missed opportunity, but what good would it do?   

lol

[capital]

2)  Madison Avenue over the last 30+ years has just become so sophisticated at marketing a lifestyle to people.  People actually believe they have to lead this lifestyle.  I can't remember which thread this was in, but this chart of consumption rates in America is astounding:

http://research.stlouisfed.org/fred2/series/A794RX0Q048SBEA

I'd really like to see a content analysis of advertising over these same years.  While certain things have become more expensive over the the years (adjusted for inflation), a lot of what we actually need to live is cheaper now than then.

Do realize that figure includes housing, medical care, and education.
http://en.wikipedia.org/wiki/Personal_consumption_expenditures_price_index

[Retired To Win]

... I think a lot of people choose low income jobs that they think will be interesting, which in itself may be a false dilemma. Then, their self-discipline in living below their means is more about freedom than growing wealth...

For 30 of my 36 years in the workforce, I never made more than $30,000 a year.  The last 6 years I made just under $50,000 a year.  But my utter lack of focus on early retirement for most of that time was not due to relatively low wages.  It was due to cluelessness.  If at any earlier time during my job tenure I had identified the concept of earlier retirement, I do believe I could/would have done "something" about it.

Now, my question is... how come I did not have a clue until I was in my 40's?

[Ferrisbueller]

Excellent question and lots of good thoughtful answers.
A big part of my work is retirement advice to employees of companies - including my own.  I want people to engage with providing for their normal (never mind early) retirement (65).  The vast majority of people, many embarrassingly intelligent, don't engage as has been said.
I think there is ignorance, and distrust of 'the markets',  but the bigger problem I see is failure to prioritise retirement planning.  A lot of people KNOW they should be 'doing something about it' but don't.
There is an area of behavioural economics that has been looking at why people don't engage enough to bother acting and a big part of the reason it seems is that people simply don't truly relate to themselves as older people or being retired (negative connotations of retirement don't help - old, bad health,mobility issues etc).
One company where I'm from has recognised this in their most recent advertising campaign. It shows an older person looking in the mirror at a much younger version of themselves saying something like "that hairstyle was a bad idea but starting a pension was one of your better decisions" and "if I could tell the 30yo me one thing, it would be to start a pension".
I'm 44 but I still feel about 28 and lots of my friends in the same cohort feel the same way - younger than their chronological age, it sort of fits then that many people simply don't see the urgency.

[PatStab]

My husband kept working as I had to quit early to take care of our daughter and mom for some years.  The DD part is effecting us greatly, we are likely going to have to place her soon, the situation is deteriorating.  If we can't get assistance from the state we are talking $60k a year for private placement, she has been mentally challenged since birth but there are such waiting lists, good luck.  Here in Indiana the good news is they give precedence to caregivers who are 80 and over.  LOL!  We will be 69 this year and planning on hubby quitting at year end, but that could change.

I have relatives that lived to nearly 100 and 1 that lived beyond that.  In my family there isn't cancer or alzheimers, my relatives died of old age basically.

Now husbands is a different story.  He had some live to be old but his mom, an aunt, uncle, and gmother all had or have dementia or alzehimers so we are very concerned about that.  He is a vet so could use VA services if they are available at least.

So looking at the long life spans that changed our idea about retirement.  Yes, we are in good financial shape but wouldn't take much of DD's expenses to eat away at our retirement funds.

So as it is we see a need of replacement income of $65000 a year.  Now that is being comfortable.

Here is a budget I roughed out but stays fairly consistent.

Insurance and Taxes  Home         $6000                           $500
Food and exras                             9600                             800
Gas & Maint                                  9600                             800
Electrical All heat, cooling               2900                             240
Phone, internet, cable                    3120                             260
Water                                            480                                40
Mower, etc                                    1200                             100     Gas, don't mow all year but repairs?
Allowance each                            10400                              800
                                                   10400                             800   Will take care of anything we leave out

Totals                                          $53700                          $3140

Supplemental Ins after medicare      12000                           1000  My MIL pays $3520 a year for supple
                                                                                                   so we aren't sure what it will cost,
                                                                                                   also at least $110 a month comes   
                                                                                                    out of each SS check for the govt
                                                                                                    part of medicare

So that ends up  being                  $65700                          $4140 a month

And we have no payments on anything.

Good luck retiring in your 50's as I would guess most are still paying on houses, kids education etc.  Lot of money to have to accumulate.

[CrisAdams]

People are programmed or scared to retire early because they have a hard time determining how much they will need to save.  If you set the intention to retire early, in your 20s, then it is feasible.  It takes planning and financial knowledge but it is possible.  Life is too short to not enjoy some free time in your later years.

[Albert]

Is it really that easy in US to keep working past 65 unless you have your own business? Here it is pretty strict 65 (sometimes earlier). Take your pension and leave some growing space for younger people…

[Metta]

Is it really that easy in US to keep working past 65 unless you have your own business? Here it is pretty strict 65 (sometimes earlier). Take your pension and leave some growing space for younger people…

There are very few laws that restrict how long you can work and few workplaces have that sort of requirement here. (There are exceptions. Pilots must retire at a certain age, for example.) However, in practical terms it is actually hard to continue to work into your elder years. Many people who want to work are forced to retire much earlier than they want because of layoffs and difficulties finding work afterwards. In fact on average, people start accessing their Social Security retirement benefits at age 63.8. So clearly many people plan for late retirements but cannot manage it. Another good reason for planning for FIRE even if you don't intend to retire.

[Retired To Win]

People are programmed or scared to retire early because they have a hard time determining how much they will need to save.  If you set the intention to retire early, in your 20s, then it is feasible...

It is STILL feasible if you start carrying out an earlier retirement plan in your 30's or 40's.  In my case, I did not even start considering the possibility until I was 42.  And I broke free at 53.  Which was a hell of a lot better than my previous expectation of retirement at 67.  :D

[PatStab]

My husband likes his job.  It pays extremely well and he doesn't physically work, his is more like a consultant position.  He has been with his company since 1989.  They have guys working overseas in their 80's.  Hard to believe but the level of expertise these guys have is hard to replace.  Most worked their way up through the company and it will take many of the college educated years if ever to learn what they know.  They are a dying breed.  Even he laughs and says he is a dinosaur.

He is a workaholic.  He is home on 3 weeks leave now and I bought a rent house up here so he will have something to putter on when he is home.  It may take a year or so, no hurry.  I will help in warm weather too.

I said what will you do after this one, he said buy another one to fix up.  He has no desire to travel, he has done a lot of that.  I travel with DD.  He doesn't fish, play golf, or do anything just for fun.  But I may be able to get him to buy a winter place in Florida.  He is healthy,  took up scuba diving in Indonesia about 3 years ago and got certified.  I'm pretty healthy too, just some arthritis.  He said I don't know what people find to do in retirement.  What can I say.

[CopperTex]

I know this is blasphemy to many of you, but some people LIKE to work and enjoy what they do! They enjoy the sense of purpose and social interactions. They would be bored in early retirement and feel lost. Really!

[EscapeVelocity2020]

I know this is blasphemy to many of you, but some people LIKE to work and enjoy what they do! They enjoy the sense of purpose and social interactions. They would be bored in early retirement and feel lost. Really!

It's not blasphemy (but you do have to have a bit of thicker skin, sometimes).  What you should do though, is point out if you are FI and still working, or if you enjoy work but also still require the income.  Also, all of that gray sea in between is quite interesting.

[sol]

some people LIKE to work and enjoy what they do! They enjoy the sense of purpose and social interactions. They would be bored in early retirement and feel lost. Really!

Anyone who says this has clearly missed the point of this website, so let me spell it out for you.

"Sense of purpose" is a bad reason to be a wage slave.  You can find purpose in life a million different ways.  Volunteer for the United Way.  Walk dogs at your local animal shelter.  Teach a child how to read.  I seriously doubt your cubicle or office offers the best and highest purpose a human being can find on Earth.

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

It's great that you love your job, I love mine too.  But would you do the exact same job if you won the lottery? 

Very few people, if being honest with themselves, would claim they would continue their current jobs if they never needed to worry about money again.  They would at least change some small aspect of it, or give up some part they don't like very much. 

Most of humanity, for most of history, has been obligated to follow orders given to them by people more rich and powerful than they are.  We live in a unique moment in history, one with such abundance that everybody born in a westernized nation is finally capable of breaking free from this kind of slavery.  And yet people keep showing up here to claim "but I LIKE being a slave!"

Work is great.  Purpose is great.  I recommend everyone strive to find both in their lives, as much as possible, and to do so in such a way that your freedom and your economic well being are not dependent on continued obedience.  I am skeptical of anyone who claims he has achieved perfection in both their work and their life's purpose, and even more skeptical of anyone who claims to have found it while being ordered around by a pointy-haired boss.

[PatStab]

Well I hope he retires.  I'm hoping that I can get him to enjoy life after retirement.  I can't go with him.  He lives and works in camps but he has seen the world and if not for DD I could have worked on projects and been an accountant and traveled too.  I wanted to do that more then anything.  Sometimes things just don't work out.  I don't begrudge him as he has made up for the salary I lost and he has given us about anything anybody could want.  I just get lonesome and hope he retires while he is still able to do some things for fun.  Sometimes there are tradeoffs in life that you must make.

[Numbers Man]

some people LIKE to work and enjoy what they do! They enjoy the sense of purpose and social interactions. They would be bored in early retirement and feel lost. Really!

Anyone who says this has clearly missed the point of this website, so let me spell it out for you.

"Sense of purpose" is a bad reason to be a wage slave.  You can find purpose in life a million different ways.  Volunteer for the United Way.  Walk dogs at your local animal shelter.  Teach a child how to read.  I seriously doubt your cubicle or office offers the best and highest purpose a human being can find on Earth.

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

It's great that you love your job, I love mine too.  But would you do the exact same job if you won the lottery? 

Very few people, if being honest with themselves, would claim they would continue their current jobs if they never needed to worry about money again.  They would at least change some small aspect of it, or give up some part they don't like very much. 

Most of humanity, for most of history, has been obligated to follow orders given to them by people more rich and powerful than they are.  We live in a unique moment in history, one with such abundance that everybody born in a westernized nation is finally capable of breaking free from this kind of slavery.  And yet people keep showing up here to claim "but I LIKE being a slave!"

Work is great.  Purpose is great.  I recommend everyone strive to find both in their lives, as much as possible, and to do so in such a way that your freedom and your economic well being are not dependent on continued obedience.  I am skeptical of anyone who claims he has achieved perfection in both their work and their life's purpose, and even more skeptical of anyone who claims to have found it while being ordered around by a pointy-haired boss.

Stands up and claps. Bravo!

[Albert]

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

Have you tried this one already? I haven't yet, but my father retired recently at 65. He was happier when he still worked. He has enough money for a modest life but no real hobbies and he has nothing to do all day long. I fear he will not last very long like this even though his health is still good...

Universe is not black or white as you are trying to paint it…

I personally wish to be involved in world class research and interact with others of the same inclination. I would literally need to win a jackpot to be able to do that privately without holding a job somewhere (industry or academia). I do want to be FI for obvious reasons, but I aren't all that impressed with all this ER part.

[CopperTex]

"Sense of purpose" is a bad reason to be a wage slave.  You can find purpose in life a million different ways.  Volunteer for the United Way.  Walk dogs at your local animal shelter.  Teach a child how to read.  I seriously doubt your cubicle or office offers the best and highest purpose a human being can find on Earth.

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

I do not aspire to be told what to do. That is why I have been self employed ALWAYS. I have never had a boss, a cubicle, a paycheck, etc. There are alot more options to work other than the cubicle, office dweling, bosses, and wage slave lifestyle. It is not just 1. be a wage slave or 2. retire. We all have as many options as we have ideas and if you disagree, you are only trapped in your own mind as well as your cubicle.

[caliq]

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

Have you tried this one already? I haven't yet, but my father retired recently at 65. He was happier when he still worked. He has enough money for a modest life but no real hobbies and he has nothing to do all day long. I fear he will not last very long like this even though his health is still good...

Universe is not black or white as you are trying to paint it…

I personally wish to be involved in world class research and interact with others of the same inclination. I would literally need to win a jackpot to be able to do that privately without holding a job somewhere (industry or academia). I do want to be FI for obvious reasons, but I aren't all that impressed with all this ER part.

+1

I'm looking at ways to *build* my career, not get out of it ;)  FI is absolutely important though, especially because I have some concerns about the degradation of the tenure system in the US. 

Edit: and yeah, I think I would still be super into what I'm doing even if I won a million trillion dollars; I read the literature for 'fun' in my spare time...

[Turkey Leg]

So why does the majority of people settle for so much less free life?  What do you think?  And what lit the fire in your belly to retire earlier?

Because I just didn't even consider the possibility. But I'm on track now! :)

[sol]

I read the literature for 'fun' in my spare time...

Many of us in research jobs, myself included, seem to have disproportionately high levels of job satisfaction.

Even I can find aspects of my job I don't like, though.  The challenge is deciding how long the access my job provides will continue to outweigh the headaches.   Hint: not forever.

[willow]

I read the literature for 'fun' in my spare time...

Many of us in research jobs, myself included, seem to have disproportionately high levels of job satisfaction.

Even I can find aspects of my job I don't like, though.  The challenge is deciding how long the access my job provides will continue to outweigh the headaches.   Hint: not forever.

I'd totally do my job for free if I were FIRE. But I wouldn't do it on such a rigid schedule and would probably prefer to work from home most days.

[kathrynd]

I'm getting the impression, that the ones who really don't want to retire, don't have physically demanding jobs.

Don't see too many saying they would love to work longer than necessary in a factory, as a dishwasher, brick layer,etc.

Workaholics, from what I hear, think the place wouldn't run without them.

Maybe their family lives aren't very satisfying, or think they have much in common with that partner, any longer.
This isn't the fault of the family or partner, but it would be nice if they are told this, so they don't devote their lives waiting for a few hours here and there from the workaholic. They wouldn't need to live a lonely life.

Too many people identify themselves with their job.
Most jobs aren't worth the hassle.

[RetiredAt63]

There are other ways to cope.  I knew at 12 that I would not fit well into a corporate world of suits and makeups and dress shoes.  I went into Biology - totally different world.  Of course the pay is much less.  If I had known how easy actuarial science might be (I'm good at math and I loved life tables, and they are more work) then maybe I would have gone that route - good money and dress code would have had me out by 40  ;-)

I unabashedly admit this! I knew at 23 that I couldn't hack it! I hated every minute of the corporate world, even though the work itself wasn't bad. I couldn't hack the mind games, the politics, the drama, and the downright idiocy of my fellow workers. I had to get out to save my sanity and my soul and that's why I busted ass to ER at 33. I'm not ashamed of it in the least. When people ask, I just tell them, "Hell, yeah, I worked hard for ten years and literally bought my freedom." Then they look at me like I've grown an extra head, but I'm happy so whatever.

In Canada they are slowly pushing to have Canada Pension Plan taken at 67, not 65, and the same for Old Age Security. Whether employers will cooperate remains to be seen, there is always the push to have "old non-productive and more expensive" people out.  However, based on demographics there may well be a labour shortage, and in that case people would have the opportunity to work longer.

Is it really that easy in US to keep working past 65 unless you have your own business? Here it is pretty strict 65 (sometimes earlier). Take your pension and leave some growing space for younger people…

Re personal financial planning - In my 20's and 30's, not only was there not the internet, there was really not a lot at all available about personal finance.  Brian Costello's book Your Money and How to Keep It (1983?) was revolutionary, it inspired us to increase our mortgage payments so that a 25 year mortgage was paid off in 19 years - and this was at 7-19% interest rates.  It also encouraged us to start RRSPs at a time when most people were not.  Given that my pension is only partially indexed, having the RRSP and other investments as backup is essential, given that I could well live another 25-30 years.

Unfortunately, looking back, we got into lifestyle inflation big time.

[Retired To Win]

... Unfortunately, looking back, we got into lifestyle inflation big time.

Now there's one good reason why so many people erroneously conclude that earlier retirement is not feasible or possible for them.  Their lifestyle inflation keeps moving the goal post.  Raising the ante.  Continuously.  Without end, if they let it.  And they do.  Sad.

[kathrynd]

There are other ways to cope.  I knew at 12 that I would not fit well into a corporate world of suits and makeups and dress shoes.  I went into Biology - totally different world.  Of course the pay is much less.  If I had known how easy actuarial science might be (I'm good at math and I loved life tables, and they are more work) then maybe I would have gone that route - good money and dress code would have had me out by 40  ;-)

I unabashedly admit this! I knew at 23 that I couldn't hack it! I hated every minute of the corporate world, even though the work itself wasn't bad. I couldn't hack the mind games, the politics, the drama, and the downright idiocy of my fellow workers. I had to get out to save my sanity and my soul and that's why I busted ass to ER at 33. I'm not ashamed of it in the least. When people ask, I just tell them, "Hell, yeah, I worked hard for ten years and literally bought my freedom." Then they look at me like I've grown an extra head, but I'm happy so whatever.

In Canada they are slowly pushing to have Canada Pension Plan taken at 67, not 65, and the same for Old Age Security. Whether employers will cooperate remains to be seen, there is always the push to have "old non-productive and more expensive" people out.  However, based on demographics there may well be a labour shortage, and in that case people would have the opportunity to work longer.

Is it really that easy in US to keep working past 65 unless you have your own business? Here it is pretty strict 65 (sometimes earlier). Take your pension and leave some growing space for younger people…

Re personal financial planning - In my 20's and 30's, not only was there not the internet, there was really not a lot at all available about personal finance.  Brian Costello's book Your Money and How to Keep It (1983?) was revolutionary, it inspired us to increase our mortgage payments so that a 25 year mortgage was paid off in 19 years - and this was at 7-19% interest rates.  It also encouraged us to start RRSPs at a time when most people were not.  Given that my pension is only partially indexed, having the RRSP and other investments as backup is essential, given that I could well live another 25-30 years.

Unfortunately, looking back, we got into lifestyle inflation big time.

As a Canadian, I wish they would increase it to 75 or 80.
Pensions were only really meant to last for a few years after retirement...not 35+ yrs.

[marketnonsenses]

Lots of speculation on what others do and why. Talking to my family and close family friends here are the reasons they give

1. Like their job, like their coworkers, would be bored at home.
2. Health of spouse or child that need lots of income and good medical (a couple people gave this reason)
3. Poor planning and not understanding fiances
4. Horrible divorcee
5. Son's legal fees
6. Wife's cancer and bills destroyed all saving (both had low income jobs)

[Apples]

Running a family business.  I'm in this gig until my (not yet born, conceived, or seriously planned) children are 30-35 and can step in as full-on managers, regardless of when I sell to them.  In my 50's I'll be able to cut back during the down time a bit, but I'm in this until my mid 60s.  But in the meantime we're saving 40% of our income and in the future will see a large income go back out the door to pay off a giant farm loan, so I like the community of the MMM forums :)

What if your "not yet born, conceived, or seriously planned" kids don't have any interest of continuing the family business?

Then the same thing will happen, but with a farm manager coming up from either the employees at that time or a new hire.  Eventually sell to them when I can no longer work.  But I'll have to be in my 50's working full time before my kids are old enough to make that decision.  So the same transition of management would occur late 50's/early 60's.

Sofa King has a good point. My Dad had a lucrative business that I didn't want to take over. It was a combination of me having other career interests and wanting to prove that I could make it without nepotism. It turned out after the fact to have been the best financial decision as well because his industry went on the decline after going through a boom while I was growing up. I think I still could have made a good living from it but it was not the slam dunk that it appeared when I chose a different path.

[mbl]

some people LIKE to work and enjoy what they do! They enjoy the sense of purpose and social interactions. They would be bored in early retirement and feel lost. Really!

"Sense of purpose" is a bad reason to be a wage slave.  You can find purpose in life a million different ways.  Volunteer for the United Way.  Walk dogs at your local animal shelter.  Teach a child how to read.  I seriously doubt your cubicle or office offers the best and highest purpose a human being can find on Earth.

"Social interaction" is a bad reason to be a wage slave.  Do you think early retirees sit home alone all day in darkened rooms?  Quite the opposite, they are free to choose their activities and their company with complete discretion, unlike the office worker who is forced to spend 1/3 of his life in the company of people of someone else's choosing, in a place of someone else's choosing, doing work of someone else's choosing.  Do you really aspire to be told what to do, and when, and where, and with whom?

Most of humanity, for most of history, has been obligated to follow orders given to them by people more rich and powerful than they are.  We live in a unique moment in history, one with such abundance that everybody born in a westernized nation is finally capable of breaking free from this kind of slavery.  And yet people keep showing up here to claim "but I LIKE being a slave!"

Work is great.  Purpose is great.  I recommend everyone strive to find both in their lives, as much as possible, and to do so in such a way that your freedom and your economic well being are not dependent on continued obedience. I am skeptical of anyone who claims he has achieved perfection in both their work and their life's purpose, and even more skeptical of anyone who claims to have found it while being ordered around by a pointy-haired boss.

So many generalizations and pronouncements!   Not sure that your judgement of "bad reasons" is valid for everyone.
To each his own.   Values and personality and perception vary from one to another.
You use words like  "Slave" and  "dependent" and "pointy-haired boss".    Not all of us are suffering out here. 

And you've stated,  having "purpose in life" is to be found in the type of morally lofty pursuits that you've described.  There are a lot of us that do those things and much more while we are participating in work.   

One of the goals that is often shared here , is to do what is meaningful and that which brings contentment.

That might manifest itself in working for some.    Yes, hard to believe, but true. 
And, for the record, some of us have jobs that facilitate our ability to volunteer, travel, be exposed to those things that bring very high levels of happiness, contentment, satisfaction and humbleness.......     

The longer I live, the more it becomes evident that the best in life can be achieved in an infinite numbers of ways.   For each that "purpose in life" looks different and is approached in ways unique to each individual.  It is for no one to judge how, when, where or why I seek  my personal life's "purpose" if you will.   Or for that matter whether one even defines "purpose" in life or just gets on with it.