If you’ve saved up 25x your annual living expenses, you’re ready to retire, right? Or is it 30x? 33x, maybe?
Truth be told, you could have 100x your annual expenses, the ability to live on 1% of your assets, and still be woefully underprepared for retirement. As Jim Wang realized when he sold his first website for millions, there’s a lot more to it than money.
He reflects on the challenges he and other potential early retirees have faced, sharing how he is personally preparing for retirement and the considerations everyone should have before taking the big leap.
This Friday Feature was originally published on Wallet Hacks.
Over the past five years or so, there’s been an explosion of “early retirement” headlines. It seems as though everyone is rushing to share the latest story about that person or couple in their early to mid-thirties who retired with [insert six-figure net worth here] and “you won’t believe how they did it!”
I understand the appeal – retiring in your thirties sounds pretty great.
Imagine never having to work again. You can enjoy a life pursuing what you want instead of what your boss wants. Wake up without an alarm, sleep when you want; it’s pretty much complete freedom.
But is freedom all it’s cracked up to be?
If you are in a position to retire, whether it’s early or “on-time,” there’s a good chance you will not be ready.
If you ask me whether I’d retire or not, my answer is that I wouldn’t. Not because I don’t like leisure, I just don’t view retirement in the same way the mass media portrays it.
In 2010, at the age of 30, I sold a personal finance blog and effectively “retired.” I had to go to work as part of the contract, but that was more of a contractual courtesy than a financial obligation.
The problem was that I wasn’t ready to retire. I shared my thoughts about early retirement on Our Next Life and how I felt completely unprepared for what happened next. There was an emptiness there, and it scared me.
When I retire (again), I’ll make sure I’m prepared.
Everyone’s Retirement Is Different
I grew up in an age when it was expected that you would work well into your sixties before retiring to a life of leisure – forty-plus hours a week at a job that, for most, was a means to an end. You made money so you could “make a living” – be able to pay for the things and the experiences you wanted.
Often the job was just that – a job, for which you had no emotional connection. If you were one of the fortunate few, it was more than a paycheck and offered some fulfillment as well.
But the idea was that you worked for forty years at a company so you could save up enough to retire – then you retired. This was the model of “retirement.”
However, that’s not what retirement will be like for me, so I have to reframe how I think about it.
I won’t retire to a life of leisure because the flexibility of my current life already offers me plenty of leisure (not counting the pandemic!). I would love more leisure but I don’t need it 24/7.
You Have to Go Through the Emptiness
You won’t know what you want unless you go through the emptiness.
It’s like being lost in the forest. Would you rather be lost in the forest with absolutely nothing? Or would you prefer a list of ideas to help you when you’re lost – like, go towards the water and follow it, or retrace your steps?
I’m sure you would prefer to have some options.
So, before you retire, build a list of things you want to spend time doing. Make it long. Make it ridiculous. Make it seem frivolous. It doesn’t matter. This list is your map.
When you feel that emptiness, you have your list. Learn a new instrument. Take that hike. Pursue that new hobby. Start that project.
Also, don’t forget to try out the items on your list now to find what you want to do on the other side.
There May Not Be An Emptiness!
When I “retired” after selling my first blog, I felt empty because I tied my identity to my work. You may not!
When I sold my blog, it was after a few short months of negotiations. You, on the other hand, may have had your eye on retirement for several years and already prepared for it, both mentally and physically. Your ‘ideas list’ might be thirty feet long!
While everyone’s experience is different, all retirements have one thing in common.
When you have questions, and you will have questions, the answer will always lie within. When you feel lost, you may be tempted to look externally, but the way home will be right there, on the inside. You just need to know where to look.
I know it sounds a bit zen, but it’s all about finding a new place in the world where the 9-5 is no longer your default, your identity.
Athletes Go Through This Often
If you listen to Olympians, or national champions, or Chess Grandmasters, anyone who has worked towards a single goal for a very long time, they all experience this.
For example, in a Tim Ferriss podcast with Maurice Ashley, Tim asked Maurice what it was like when he finally became a Grandmaster. Maurice said it was horrible!
To give you a bit of context, it takes many years of grinding for someone to become a Grandmaster, much like working an entire career. The end happens much faster than you think.
The problem with reaching the top of a mountain is that you’re at the top. There’s nowhere to go but down. What you need is another challenge, another mountain to climb, something you can set your sights on.
When you retire from work, there is no “next job” or “next promotion” or “next project” waiting around the corner – it’s over. It’s like the end of the Olympics or the final buzzer of the national championship game – you have to do something else.
That transition is tough if you aren’t prepared.
Projects & Progress Are Absolutely Crucial
Human beings need to grow. Whether it’s mentally or physically, growth is important.
Progress is important.
Viktor Frankl has a beautiful quote in his book, Man’s Search for Meaning, that captures this:
What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him. What he needs is not the discharge of tension at any cost, but the call of a potential meaning waiting to be fulfilled by him.
When you stop growing, you start dying.
Our bodies do this naturally. If you start lifting weights, your body will react and start building muscle. The moment you stop lifting weights, your body reduces its muscle mass. We do this because muscle is calorically expensive, and our body doesn’t want to carry around weight if it’s not required.
I believe the same happens with our minds. If you aren’t challenging yourself, working towards something, and growing – you’re going to lose it.
After I sold my business, I started a few other businesses that did OK but nothing stellar. I started a marketing company with two friends. Another marketing company eventually acquired it. I cofounded a meal planning business with an absolute rockstar (and friend) that still operates today ($5 Meal Plan). Then there’s this blog.
I jumped into projects I found interesting, but my primary motive was financial. I was still “working.”
For now, I will continue to scale my “next mountains,” but there will come a time when I’ve ascended the top of my final mountain, and I will once again have to make that transition.
You’re Not Who You Think You Are
This one sounds strange but bear with me – I was chatting on Twitter with Chris Mamula from Can I Retire Yet?, and he mentioned something really interesting about his retirement:
I thought this was fascinating because it speaks to that transformation that happens when you retire. You leave your work, the place where you had stored quite a bit of your identity, but you’re not that person anymore. It’s a transition and a hard one at that.
In his case, he filled it with other things, including “Volunteering, blogging (connecting with readers & other bloggers) provide purpose/connection. Hobbies (outdoor adventure, gardening, reading) fill time.”
I filled it with another business. And another. And eventually settled with this blog as my “primary” job but one where I can be a bit more casual about what I’m working on.
What does this mean for me now? I have to realize that at the next transition, I need to be ready for the transformation. I won’t be the same person I am today.
How I Am Preparing for Retirement
My preparation is around three key ideas:
- To find projects I enjoy that will challenge me physically and mentally. Projects like WalletHacks.com are great because I enjoy writing as a creative outlet, I enjoy the business of blogging, and it’s fun. I’ve also started running and while I don’t think participating in races will become a big part of my life, I do enjoy the challenge. I think building up cardiovascular strength will also make other activities more enjoyable too. I am working on building up a list of projects I want to work on when I have all the time in the world.
- Nurturing friendships and relationships. Loneliness kills and if there isn’t anything else you do today, watch this TED talk by Robert Waldinger on “What makes a good life?” He discusses the results of one of the longest studies on happiness and the importance of deep relationships (rather than the number). With retirement may come an emptiness you need to get through, but you don’t have to go it alone.
- Rethink retirement. Retirement isn’t the end of work. It’s simply the end of being required to work. This is more of a mental transition than a financially driven one. I’ve started to adjust my work to avoid as much “active work,” as possible – the work I must do right now or at a set schedule. A lot of my work, like writing, can be done in batches, at any time. I could be “retired” now, but my brain hasn’t gotten there yet.And doing work while in retirement is not uncommon. A lot of retirees take up side hustles, or encore careers where they are consultants or they coach others. They can pass on their experiences and learnings to the next generation. It’s still work, as they’re still being paid, but the value comes in passing on information and not necessarily the paycheck.
One final thought – much like you and I will have changed by the time we retire, retirement itself will look much different in 10, 20, or 40 years.
Take the side hustle, for example. For years, it was looked down upon as nothing more than a “second job.” Nowadays, we celebrate side hustles. And most of the popular ones today didn’t exist in 2000, like delivering food for DoorDash or driving for Uber. Just like in the past, life will look very different in just a few short decades.
The key is to start preparing for life in retirement now so you can navigate it more easily.
In what non-monetary ways are you preparing for retirement?
14 thoughts on “Are You Ready to Retire? Probably Not”
So I have enough to retire but what do you do about health insurance?
In short, pay for it. I’ve written about our decision-making process, as we also considered a health sharing ministry option, but we ultimately went with true health insurance from the exchange.
Early Retirement Checklist Part Two: Insurance, Family, and Social Considerations Prior to FIRE
I was the classic set up for a disastrous retirement because my identity was so closely melded to my job. I ran the company I started out with as a summer intern. It was a household name in our small state and I became the face of the company, a minor celeb. Yet I never felt any emptiness, never once missed that job or the status that came with it during the six years I’ve been retired. I was actually surprised that I did not struggle. I think because I was prepared by having arranged a part time consulting gig and already being plugged into some volunteer roles. Those felt kind of like a continuation of my old career, but without the time demands and the stress. I added a few new things like mentoring and expert witness cases and pickleball and life is as good as it has ever been. I only do a tiny bit of paid work, quite a bit of volunteer work and lots of sports and outdoor leisure activities. Its a mix I greatly enjoy!
Another way to look at the “what do i do next” problem is that our culture turned your ego into a striving machine. Your ego is not happy unless you are striving. In this context, what you can do next is tame your ego. Learn to be content without striving. For a hint of how this feels, try to remember a time in your life when you were content just to be.
Bogus article which might apply to a young person but not to the vast majority of physicians who have been humping it for 30 years and who have been abused.
Does the fact that the author’s experience differs from yours make it a bogus article?
If you’re ready to retire, that’s great — much of this blog is geared toward people like you. I personally left medicine when I was 43 years old.
I do, however, like to bring alternate points of view to give people something to ponder. Many physicians that I know have failed retirement, and the insights in this article can help prevent such an outcome.
Thanks for this. Sounds like the “work” continues in RE.