How you can fail miserably at early retirement: Challenges and pitfalls of FIRE (financial independence retire early) lifestyle
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| Grandview Overlook, New River Gorge National Park |
Fred Rogers: “Often when you are at the end of something, you’re at the beginning of something else.”
Recently, I came upon an article that piqued my interest. It was about a 38 year veteran of the financial services industry who had retired, but failed at it. He was going through a phase similar to what I went through after retirement, which is figuring out what you want your retirement to be.
Without having a purpose, you can easily feel lost after reaching your financial independence, then retiring early. In this post, I’d like to share my thoughts on this phenomenon after retiring.
Let’s first get few things put out there about the reality of early or normal retirement.
- Retirement will not fix all of your problems
In our case, work and the stress it caused was our primary reason for early retirement. By eliminating that factor that caused the most stress for both of us, we managed to fix our problem by retiring early. Unless this is also your primary reason for why you retire, then nothing will change just because you retired.
Figure out the problems and look for solutions before your retirement. If you have relationship problems, work it out together (or with help from a professional). If you have kid problems, again work it out together. Communication is always the key to fixing any problems. If outside help is needed, you can always seek that as needed.
Retirement should be your reward for working hard most of your adult years! Go enjoy it!
- Retirement is not easy, unlike those retired people portrayals (walking on the beach, playing golf, traveling) in financial services industry commercials
For many people, job/career defines who we are. It creates a sense of purpose to be going to work. It creates camaraderie among colleagues. It provides a sense of accomplishment after a job well done.
It also sets a pattern for five days out of the week on how we spend our days. It tells us when we should get up to get ready for work. It tells us what to work on. It tells us when we can eat. In short, it forces us to spend majority of our working days, getting ready for work, actually working and thinking about work.
Most of our lives revolves around our work. It defines (whether we like it or not) who we are, how we spend our week, and who we communicate with.
By not working after retirement, this change can be devastating for some people who defines job as one of the most (if not the most) important part of their lives. It’s been said one of the most stressful life events is changing/quitting/losing your job.
If having a job is really important to you, then you should plan on either working part time (or do contract work), or be an entrepreneur and create your own job. Having a purpose that suits you is a must for retirement.
- Retirement without a plan is a bad idea!
We simply had too much time on our hands. This abundance of time can drive people crazy, unless you have a plan and a purpose!
For me, creating my blog and YouTube videos bring me joy. You also need to find that ‘it’ which makes the time fly, keeps you in-the-zone, and keeps you fulfilled. It may require some deep thought and soul searching, but this is really important for a happy retirement.
- Retirement is not all about the money
Most retirees will constantly worry pre-retirement as well as post-retirement, whether their money will last their remaining years. Sometimes, it’s a daily struggle worrying about the ups and downs of the stock or the bond markets.
Just like during the accumulation phase of your retirement, the drawdown phase of your retirement should be the same. You’re still looking at long term, and you should already be prepared for the inevitable gyrations of the financial markets.
I would argue that most FIRE (financial independence retire early) movement retirees have seen their net worth increase over time, thanks to the stock market. One other advantage of being FIRE movement adherents is that our yearly expenses are kept well under control.
Because we’re spending down much less than typical retirees, the chance we would run out of money is much smaller than most. And on top of that, most FIRE movement adherents would keep a year or two years worth of expenses in savings accounts or similar, in case of market drops.
Running out of money should not be keeping you up at night if you planned for the inevitable market drops which will definitely happen.
In conclusion:
The reason why some retirees might fail at retirement can be personal. In many cases though, it boils down to few things that impacts everyone, retiree or not. Such things are: relationship issues, marital issues, kid issues, to name a few. It’s important to figure out a solution to these issues beforehand so your retirement will be a more enjoyable one.
Retirement, just like in life, requires a reason/purpose. Without one, your retirement will be just one boring day after another. I mean, how many streaming videos can you really watch every day, day after day?
To make retirement enjoyable and fulfilling, plan for things that bring you joy, happiness, and fulfillment. If that’s working part time, or picking up a new hobby, finding that ‘thing’ is the difference between a happy/fulfilled retirement vs a boring/meaningless retirement.
For my wife and myself, traveling, spending time with our family, painting, and creating content are what give us purpose and meaning. It makes us happy and fulfilled doing these things we hold dear.
Remember, retirement is your reward for paying your dues, working all or most of your adult life. Make it a good one!
Thank you all for reading!
Jake
Wandering Money Pig
If you missed the post ‘What’s it like to hand in your resignation...’, please click here.
