Have you noticed how the word “retirement” isn’t very useful?
There’s nothing wrong with being retired, spending one’s days however one wishes. My grandparents had an idyllic retirement in many ways. They lived in the Georgia countryside, had a giant garden, drove huge American cars, went fishing whenever they wanted, and cooked fresh food nearly every day. Their retired friends visited them, often unannounced and bearing gifts of produce, leading to spontaneous pea shelling or corn shucking sessions under the car port, where the most entertaining homespun story-telling imaginable occurred. Best of all, they lavished time and attention on my brother and me as kids, taking us on summer road trips for weeks at a time. When we were with them, the only time our grandparents weren’t spoiling us with their love and attention was when their soap operas came on, at which time we were hustled outside to play.
The paradox is, they were “retired” but they were also busy. Today, too, when people finally unchain themselves from paid work many of them soon say, “Wow, I thought I retired but I’ve never been so busy!” They are volunteering, running errands, traveling, doing house projects, and visiting friends.
Sounds pretty good, right? So, what’s my problem with the word “retirement”? In our work-oriented culture, it implies that one’s paid career is over and now the retiree is dedicated to full time leisure. It’s binary: You work until you don’t have to any more. Earning is either happening full time or it’s never happening again. On/Off.
The problem is, On/Off is not what I observe in very many post-career people. To be sure, some former workers are dedicated to unpaid leisure. Bully for them, if they can afford it and if it’s what they choose. Other people encounter health challenges or care-taking situations that require their focus. Still, I observe a lot of post-career people doing a variety of activities, which is a mixture of leisure, service and paid. A lucky few can’t tell the difference.
People no longer working full time might still be at their traditional employer but on reduced hours, or consulting a bit, or driving for Lyft, or running an Airbnb. I am secretly envious of the clerks down at the hardware store working a few hours per week and seeming to enjoy cheerfully welcoming customers and helping them find what they need. When I visit REI I seek out the staff my age and ask if it’s fun to work there (yes, apparently, though it’s tempting to buy too many gadgets and clothes).
Even my retired grandparents were economically active their whole lives, considering that they owned some commercial property in town and regularly sold timber from their land to the local paper mill. My own parents are in their late 70s and are still engaged with part time work. My dad experimented with full blown retirement at age 75 but soon discovered he liked being an engineer too much, so his former company gladly rehired him to continue designing machines 3 days per week.
“Retirement” also doesn’t seem to fit the new generation of “FIRE” enthusiasts. If you haven’t yet encountered the burgeoning FIRE community online, it consists of thousands of avid savers and investors aiming to decouple themselves from job-dependence just as soon as possible by becoming Financially-Independent/Early-Retired.
People pursuing FIRE are committed to their goals and to living their lives intentionally to a degree that really impresses me. The simple idea of FIRE is to leverage one’s job to create permanent financial security. They limit debt and moderate consumption, using the resulting large marginal income to build an investment portfolio as quickly as possible that is sufficient to support their required spending forever. Portfolios usually consist of simple, low-cost and entirely passive stock and bond index funds, though a few are building up rental real estate holdings or other businesses.
Someone who can achieve financial independence in their 30s, 40s or 50s thanks to visionary goal setting and uncommon financial discipline is probably not the type of person who will gladly pivot easily to the hammock of full-time traditionally-conceived “retirement,” umbrella drink in hand. No, these people are so productive that they probably can’t help but continue attracting earned money, only now these “FIREd” folks work creatively on their terms. That’s what I want to do.
I have been consuming the abundant and inspiring FIRE-related blogs, podcasts, books and other media for years now, so I count myself a fan and avid participant in this friendly, positive and supportive community.
At age 52, I’m also getting very focused on acting on what I’ve learned. Long before the FIRE acronym was coined and its online community emerged, my wife and I lived beneath our means, saving and investing 30-50% or more of our income starting in our 20s, even as we worked in the non-profit sector our whole careers. We’ve never felt that we have sacrificed anything important to us.
I lead us on this path, though my wife certainly does her part. I was compelled to take advantage of the tax reductions and employer matches in our 403b plans (the 401k equivalent of the non-profit sector), which together amounted to a half-price sale on dollars. There was nothing we really wanted to consume that made us want to dial back savings and turn away from the opportunity to save with the helpful tailwind from the government and our employers. Rather, we always found little ways to increase our savings rate every year, little by little, until we maxed out all of our tax-advantaged savings vehicles, so we then started saving and investing after tax dollars.
We simply directed our savings and employer matches automatically into stock index funds until our late 40s, when we started gradually adding a total bond index fund into the mix for some ballast to the stocks’ inherent volatility.
We also bought and renovated a few old houses, one at a time as we lived in them, making some profit along the way. We aren’t aggressive “fixers and flippers” but we discovered that we enjoy learning new skills to beautify our living space as a satisfying creative outlet. In hindsight, renting places to live would have probably been the better choice from a purely-financial perspective but, then, we obviously do not live our lives in order to obtain maximum money. After all, we’ve had non-profit careers and, as Jerry Seinfeld once said, “‘Non-profit’. That does not sound like a good business model!”
I enjoy my full-time job raising money for a wonderful organization that a lot of people rely on. I still feel a strong sense of mission about my work in philanthropy. Still, like most everyone I know at my age, my wife and I are sort of looking to do something different. The marginal returns of habitually expanding our careers feel to us to be diminishing a bit. We’ve accomplished a lot of our career goals. We’re not as willing to prioritize work over the rest of our lives.
Some people I know, however, have identified things they want to do and are not waiting to do them. One work friend, a model for our field and at the peak of his earning potential, now that his kids are out of college is dialing down his career in his late 50s to become a clown. Literally. He’s reduced his work hours and will attend clown school with a plan to entertain people in nursing homes. He’ll be the best clown ever, too.
I am not driven to be a clown but I celebrate his intention and want to model it. Fortunately, I am inspired by the possibilities of freedom in the state of FIRE and its many avid practitioners. I am making plans to leverage the reasonably strong financial position we’ve built over several decades, using the portfolio as a kind of 3rd salary to support some exploration and discovery that might be different than what I’ve been doing for years now. I’ll look forward to chronicling the journey in future posts. I want to learn how other people, like my clown friend, are making the leap, too, and to feature their unique experimentation here.
My wife is taking a needed break this year from her career, which gets me back to the title of this blog: Through our own longstanding FIRE habits, we realize we can work and live, pretty much as we choose to. We can dial it up or we can dial it down. Right now, I’m dialing work up and she’s dialing it down for a while, because we choose to. If we choose something different later, we’re in a position to act. For example, we plan to both dial it down in a few years for a gap year or so to travel internationally. That goal is another adventure I want to chronicle here so we can learn about others’ rich experiences while traveling.
As apt and evocative as the FIRE acronym is, the “Early Retirement” half of it is not our mindset. Like lots of people, we find ourselves somewhere on the middle of the continuum of paid work-to-unpaid activity. The best alternative word to “retirement” that I’ve encountered that more accurately describes what we’re about is “pretirement”*. I look forward to learning and sharing in this blog our own and others’ unique journeys of pretirement. I think the next enjoyable phase of life will feature dialing economic pursuits up, dialing them down and dialing them all around as we choose how we work.
*The Wikipedia page for Pretirement describes “the emergence of a new working state, positioned between the traditional states of employment and retirement.”