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Early Retirement Decision

Early Retirement Questions

I've recently spoken with two people who reminded me about my own efforts to answer these big early retirement questions.

- What will I do / will I be bored?

- Do I have enough money / will it last?

I remember going over and over these questions.

Deciding to retire early would mean resigning from my job, the very thing that kept me both busy and provided me with money. What if I went ahead and resigned only to later discover it was the wrong thing to do? It was tough to think about that.

When I settled on my decision, I still wasn't sure of the answers to these two questions. Perhaps that my job had lost its allure was a blessing, helping me overcome my less than perfect answers to these questions.

If I hadn't fully answered the "what will I do?" and "do I have enough money?" questions, then how did I make my decision? I took a leap of faith, and paid attention to what my heart was saying and what my gut was feeling.

It's not as reckless as it sounds. The leap of faith was the final part, after I had answered as much as I could about those two big questions. The decision was therefore a healthy amount of thought and logic, but there's no doubt that heart and gut played a sizeable role too.

In hindsight, I suspect my dilemma was normal, but at the time I thought I was the only one unable to decide based on logic and fact alone. It's worth remembering that for any decision that stretches decades into the future, it's impossible to figure everything out.

Perhaps you're thinking about early retirement, and are battling to answer these same questions. My advice is don't beat yourself up, it's normal. I know it doesn't feel comfortable, but you may also have to take a leap of faith to get to your decision, whatever that may be.

So far, my thought, logic, heart and gut haven't disappointed, early retirement is working out well. I'm not bored, and my expense tracking indicates that I should be OK on the money front.

Anyway, back to the two people who made me think about this topic today. I'll call them "M" and "S". M reminded me of the "what will I do?" question and S about the "do I have enough money?" question.

What will I do?

I spent a lot of time trying to answer this question. I was 46 at the time, thinking about what I would do for the next 40 or 50 years.

I'm sure others have also tried to figure out the same thing. I now suspect that trying to think decades ahead is nonsense.

I feel the focus should be on thinking about what I will do over the coming months and year, and perhaps some idea for up to 3 years ahead. Maybe still not easy, but a lot more doable than 40 or 50 years of planning.

Our interests may change, or perhaps the future will turn up something we hadn't thought about. Would Donald Rumsfeld call these "unknown unknowns"? In any event, as unknowns, they won't feature in our current thought process.

Business also gives us a steer. They make detailed plans for the next year, and then something less detailed for 3 or 5 years at most. And my experience is there is often a lot of guesswork in these plans. Good businesses know things will change and are willing to adapt.

So the lesson I've learned is to not stress too much on the question of "what will I do?". Having a plan, or at least some ideas, for the next year or so is sensible, but we don't need a detailed plan for the next 5 or 10 years, let alone 40 years. It will evolve.

But what if we're still struggling to think of what to do for even a year ahead? Assuming you still think early retirement is the right choice, don't panic. The trick is to start doing something, almost anything is OK. You may have a few false starts, but the likelihood is you'll find something and it will grow or lead to other things. And if we start some things that don't work out, stop and start something else.

My blog is an example. I didn't know about blogs, but I decided to dive in. I found I enjoyed it. Through it I discovered other blogs that I learn from. I spend time gathering information. I've been interviewed for, the National newspaper and a Chinese language magazine. I've given a talk to (the local chapter of Bogleheads and ChooseFI), and I've met up with a number of people through my blog.

This wasn't all part of my master plan. Start a blog was an idea, but these other things have evolved from that. They've all been a positive surprise to me, they keep me busy, entertained and having fun. I simply started, and one thing lead to another.

Will my money last?

I haven't changed my mind on this one, it's still an important question, one you want to get more right than wrong! My experience is that I've needed less money than I thought, and I could certainly live on less than I do if required.

But you do need to ensure that your finances can deal with unexpected situations. This is echoed by S who got in contact with me to share her experience.

S retired in 2016. Despite having kept fit and looked after her diet, she recently needed an operation and has subsequently been diagnosed with cancer. If that wasn't a difficult enough time, her pets have also had health problems. The veterinary costs alone have run to tens of thousands of dollars, and on top of that are the medical costs for her operation and cancer treatment.

S tells me that her health is OK at the moment, and I'm sure you join me in sending our best wishes. But the medical issues have clearly been a shock, and that is before the financial impact of the veterinary and medical costs.

The message that S wants to share is that we don't know what tomorrow will bring. I like to be an optimist, but this story does remind us that we need to be able to provide for difficult circumstances should they arise. In particular, S suggests starting a savings fund for possible future medical events.

I have reviewed our financial position, and I'm comfortable that we can afford to deal with such issues. It's certainly a reminder that events don't always go to plan, and it's worth checking that our finances are able to deal with such eventualities.


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