I retired at 63. My employer made the following offer. My retirement account would be converted into an annuity that would pay as thought I was 65. It would be at the current rate, not the lower rate that would go into effect the day after I retired because professors live too long. And I would get a retirement bonus of 3/4 of my current salary for the 25 months till I actually turned 65. This was too good to pass up. The result is that between me and my wife (and our RRSPs–more or less the equivalent of Roth I think) we have an annual income of over C$125,000 and, even after 25 years of inflation are still not spending it all. So I have no fear of its running out and we plan to leave a nice nest egg for our kids.
Now what have I done in the 24 years since? Well I was a research mathematician and till about 5 years ago, I continued doing that. It was my life; I enjoyed it; I think I was pretty good at it. But I seem to have run out of steam about 5 years ago. Also my field seems to have left me behind. Also I am not in very good physical shape. I cannot walk a whole mile any more. Right now, I am planning to walk ten round trips in the hall of my condo, about a kilometer, which will leave me exhausted. Of course, I never expected to be alive at this point.
I guess my advice is to find something you enjoy and do it. Until you can’t.
I’m doing the more physically demanding things I want to do now earlier in my retirement in case I can’t do them later.
Having interests that sustain you is important - ideally a mix of things that keep you physically and mentally active and get you out into the world where you are interacting with other people who share those interests.
When I was 12, I went to a summer camp, and the director said something to us (an audience of about twenty kids of varying ages) that I never forgot:
“Life should, at all times, be an equal mixture of study, work, and play. Unfortunately, people often divide their life up into thirds. The first third is nothing but studying. The second is nothing but work. And the final is nothing but play. All of these extremes are unhealthy.”
We have been spending between $20K and $25K on travel, and that number has been climbing the last few years. As we move closer to retirement (I’m 60, my wife is 59, no kids) that number is just going to increase. This year we’re probably going to hit $30K. Our goal for the early part of retirement will be to spend 1-2 months a year living away from home, possibly overseas. Our retirement savings is targeted for some significant spending in our early retirement years, with that tapering off as we age out of our ambitious travel plans.
Sounds like the sort of advice someone who runs a children’s summer camp gives to 12 year olds.
The reality is that if you don’t study enough, it’s a lot harder to find the sort of work you will enjoy and that will actually allow you to eventually play when you’re older.
But I also see a lot of people work very hard to build a life they don’t seem to particularly enjoy. It’s like up until their 20s or 30s people seem to be more about doing stuff, going places, trying new things, and just generally “living life”. Maybe it’s because they are young and it seems like they have all the time in the world and are working towards whatever life they think they want to build.
Then there seems like this 20-30 year period where they decide to “join the real world” and take a job they don’t like, get married because they think they are supposed to, move to some boring suburb they can’t stand, maybe they have a few kids they are dealing with. Not that these things are inherently terrible in and of themselves. But I think they can become terrible if you treat them like a constant backlog of “tasks” that need to be accomplished.
That’s when people start looking forward to “retirement” when they no longer have these responsibilities and think they can start living life again.
So not inconsistent with your camp director’s advise.
A friend of mine booked an AirBnB in rural England for a month and worked from there. Its doable.
I “retired” (semi and not voluntarily) in my late 40s after a mental health collapse. My husband still works, and has a great job. Currently we are sitting in a rental condo - he’s working while we “snowbird” for a week and I’ve been walking the Hilton Head beaches. I’ve been able to travel with him when he speaks at conferences all over the world - and we’ve done a lot of travel together now that kids are grown. Travel…gets old. You may end up doing a lot less of it than you envision - though I’d recommend doing it when you are youngish. The Sacred Valley in Peru not a place to explore with bad knees and heart disease. Being folded into an airline seat for fifteen hours to get to Sydney is harder as you get older. Make a list and prioritize it based off how healthy you need to be to do it (a safari in Africa is riding around in a bouncy jeep - it isn’t great on your back, but its better than the gazillion steps of a temple in the Andes at altitude. Europe tends to be easy. America seems designed for those that move slower (Hilton Head is a place of old people in the Winter months).
Also, being retired, even semi retired like I am, is boring. There are only so many books to read. I end up doing weird things to fill time. I need to find a light job - one that won’t cause another break down - not for money, but for structure.
Our financial person at Fidelity refers to the early stage of retirement as the “go-go years” since those are the years where you’re going places every chance you get.
My in-laws did a fair bit of that in their first few years. Not so much massive travel, but they had a fairly active social life (and did take a few trips). After 10 years or so, their world started contracting; between their own health issues worsening, and their declining social circle (which happens, when you move to a 55+ community in an area where nearly everyone is a retiree), and the pandemic, they almost never even left their apartment and they saw nobody except their housecleaner and their doctors.
Whatever we do in retirement, I do hope we manage to keep an active life in terms of human contact.
The “international” part may be tricky from a legal / tax perspective. Even in the US, it’s a likely a little dodgy from a US tax perspective, since you’re supposed to pay state taxes where you’re physically working; I don’t know if any tax codes have been updated to handle the increase in telework.
My husband and I are also on projects where we are 100% remote, and could physically work anywhere, but we are explicitly NOT permitted to work when in another country. We have and will continue to take advantage of the work-anywhere aspect, otherwise - e.g. last year when we were selling our condo in Florida, we worked for 3 weeks down there.
Even if you don’t want to work long-term somewhere else, you can combine the remote work with your true vacation plans, saving on travel time and reducing time off of work. We’re doing that for several trips this year: leaving the weekend before, getting an AirBNB nearby, working 4 days, taking a long weekend, then getting another AirBNB. This allows us to drive vs fly (I hate flying, and after the meltdowns in recent years, don’t trust airlines; plus still concerned with being in a tin can with Covidiots for 3 hours). And the driving is done on a weekend, thus no additional lost working time.
Someone I worked with 10+ years back became a full-time RV’er with his wife. Their kids were grown. They travelled to a place, spent a few months there, and he worked from wherever they were. As long as he could get high-speed internet, he could park that thing wherever they wanted to go. I was quite jealous.
I’m trying to do this now, pre-retirement, while I still have health and a salary (I’m at the stage where I am earning as much as I ever will from a job and can get the time-off). My retirement accounts are in OK shape, but as mentioned upthread, I want to live the life I want now. You can make more money, but you can’t make more time.
For the international tax thing, google digital nomad. Some countries will let you work casually without concern for varying amounts of time as long as you are doing your job (i.e. not taking a job from the residents) And the U.S. isn’t going to care as long as you pay your taxes. The U.K. has a six month digital nomad visa, for instance. Germany’s is three months, Greece is a year.
Definitely travel, and do it early, as other people said. I’m 72, and last October we flew from SFO to Amsterdam, which is a long trip, longer than it used to be.
Before I retired, 7 years ago, I went around the house and made a spreadsheet of all the stuff that I wanted to do that was delayed due to me working. It was very helpful, both in getting organized and in answering the inevitable “you’re retiring? What are you going to do?” question. I just told them I had 62 things on the spreadsheet they no longer wondered.
As far as money goes, retirement is about cash flow, not cash balance. Compute how much you spend a month, not counting savings, and compute how much your investments and Social Security will bring in. I waited until 70 to collect, now our dual Social Security payments are like 80% or more of our monthly expenses, so our investment balance goes up since we don’t even spend the earnings.
Find a stretch goal that involves other people. There are lots of book clubs. I bet there are cooking clubs. I’m happily married, but I’m the webmaster of a writers’ group, and 90% of the members are women, half of them single.
The best thing, though, is getting up and reading the paper and drinking coffee still in my pajamas. Getting rid of the commute beats just about everything.
If you have time/money - which you have time in retirement and sometimes the money works better this way anyway, break up the travel. Amsterdam is a long way away. But its closer from New York than California. Or stop in Iceland for a few days. We did Tanzania last year - and because we weren’t up for the eighteen hours to Africa (including the stop), flew eight to Amsterdam (from MSP), spent two nights there enjoying Amsterdam, then eight hours more to Kilimanjaro airport. On the way back, we just spent one night in Amsterdam - not really enough time to see the sights, but enough time to stretch legs, sleep in a bed, have a real meal, etc. Flying to Sydney involved a few days in California. (And a Delta One seat for the SFO to Sydney leg).
I’ll be 53 this year, single/no kids, earning low six figures as a project manager with a large defense contractor. I’m debt-free but with super modest savings and only my car as an asset (I rent), and my only retirement account is a 401(k) that I’ve rolled over from employer to employer…but only for the past 15 years, after I cashed out and started over (I had reasons; no regrets). So, even though I’ve maxed my contribution for the past few years the current balance (<$0.5M) isn’t quite where it should be. I figure by the time I get there, the retirement age will be 70: I’m hoping the 401(k) will be much healthier by then, and that I’ll be able to stop working FT. I can’t imagine being able to retire early.
Unfortunately, my retirement plan is to get as many singing gigs as possible. I say “unfortunately” because being a musician is an expensive avocation. I’m trying to earn and save as much as I can for the next 14-17 years, while also enjoying life – and being a musician – now. If I want or need to, after officially retiring I could probably do some PT consulting as a proposal writer/manager (prior career). And a PT retail gig isn’t out of the question, for pocket money. I look 10-15 years younger than I am; having a big ol’ baby face will work in my favor then.
I do like to travel, go to baseball games, go to live shows, etc., but I don’t like doing any of that by myself (though don’t confuse unwilling with unable), so how much I want to do in retirement might depend on whether I meet someone. Like the OP, “while I don’t discount the idea of finding a partner to spend my twilight years with, it’s not something I’m counting on either.”
Well, maybe I’m a cautionary tale. I’m 56 and retired after 30 years of construction…(Foreshadowing). We have what I consider plenty of money–net worth in the mid single digit 7 figures, no debt. However, I’m falling apart. New shoulder 2 years ago. Severely arthritic neck. Tore my quadriceps tendon off my kneecap last fall–turns out that’s kind of a big deal. My wife has MS which is nicely controlled by the $100k annual infusions, so there’s that, and had breast cancer 3 years ago. So don’t assume anything. I have a good friend who has a couple orders of magnitude more money than us and he has debilitating spinal issues that have not really responded to many surgical interventions. My only recommendations are to have enough money to afford medical care, have good genes, and try not to get hurt. Good luck!
The flight came free with a cruise, so stopping wasn’t really an option. And I much prefer not transfers that can get screwed up.
However next time we are going to spring for business class. We flew from SFO to Hong Kong business class, thanks to our daughter working for the airline, and it was great.
I’m trying to earn and save as much as I can for the next 14-17 years, while also enjoying life – and being a musician – now. If I want or need to, after officially retiring I could probably do some PT consulting as a proposal writer/manager (prior career). And a PT retail gig isn’t out of the question, for pocket money. I look 10-15 years younger than I am; having a big ol’ baby face will work in my favor then.