Sep 19, 2012
Note: This was originally sent in by Doug, a member, as a comment with an alternative approach to retirement, specifically in reaction to Betty Fitterman’s article, “Retiring on a Dime“. We publish here because it has some interesting and common sense ideas, and appreciate Doug sharing them with us.
Hopefully my example will help others prepare for their retirement. Deciding when to retire is the key. In my opinion you should retire when you realize you’ve acquired enough assets and possessions to maintain the standard of living you want to live. I “semi” retired at the age of 43. My original plan was age 50 but circumstances led me to retire early. Six years later I don’t foresee outliving my money at any point because I not only planned my retirement finances but my retirement lifestyle.
Financially I set myself up for income with a rental, IRA’s and some stock. A financial planner? Sure I have one he manages the IRA’s and a couple of other things but I do the real work. He seems to think I’ll outlive my money and if I lived his lifestyle I certainly would. By comparison I don’t want or need a 5,000 square foot house and $250,000 car to “make me happy”. Investments need to be monitored and cared for just like any physical asset if they aren’t working you need to make changes, stocks and real estate can be sold, Ira’s moved and cash invested.
Next is Lifestyle. When your retired you have a lot of time on your hands. You can’t live the lifestyle you had when you were working nor would you want to. When working my days off were limited and spent running around trying to get my housework and projects done only to collapse and start the process all over again. Now I have the time to do everything! Although all related I broke down lifestyle to encompass Health, Hobbies/Interests and Expenses.
Health – Good health is first priority, do research and take on a course of self improvement for life extension. Look at yourself in the mirror and ask if this is who you want to be if it’s not change it. Sure it takes work, hard work but then again your not working are you. At just 35 I was faced with having to take medications for the rest of my life I chose not to take the drugs and took a course of well being with diet and exercise. I keep a vegan diet not only did I drastically lower my grocery bill I improved my health tremendously. Instead of buying a recreational motor vehicle I bought a bicycle for a couple of thousand, took up yoga and got some used workout equipment. All of which replace the physical work I did, lower stress and improve health and well being.
Hobbies and Interests – I took on hobbies that don’t have ongoing costs with membership fees or maintenance. When I was working I had a power boat for a few years it needed hauling, maintenance and had to be set in a marina now I plan to get a kayak. Other hobbies and interests like photography, astronomy, motorcycling, biking, reading, hiking and walking can improve the mind and body without much expense after the initial investment. If you enjoy doing it your making improvement but only if you can afford it.
Expenses – Surprisingly my cost of living dropped by over one third when I retired. This was mostly because of the costs I incurred just going to work. How do I know? I keep a spreadsheet detailing every dollar I spend in a personal budget. This helped me target and review where my money goes. The first thing I looked for was overlapping services one example is insurance. I had towing insurance on my auto policy, motorcycle policy, auto warranty and AAA all of which I paid for. Needless to say I cut and canceled the overlap. All within a couple of years my old refrigerator and TV broke. Replacing the fridge with a new one saved me $20 a month in electricity and will pay for itself in just 3 years. Mindful living has further reduced my expenses, small things add up like using dish towels instead of paper, putting electronic devices on power strips and turning them off saved me $10 a month. Now my electric bill averages $20 a month and there’s no need to put big black panels on my roof.
I hope you enjoyed the story of my personal venture. I wanted to offer a success story written from the point of view of an average guy with a little college under his belt who owned a small blue collar business. I live a great life, travel at will and my only worry after breakfast is what to have for lunch!
Comments: Please share your ideas and reactions in the Comments section below.