During the life of this blog I’ve interviewed a fair number of people. Some are just bloggers and other for PF related material. Sydney has been a real treat to interview because she is a blogger and also a recent early retiree (she just quit about 6 months ago now at age 44). I’ve always admired her blog for insights of the emotional aspects of retiring. So without further introduction here is my conversation with Sydney.
Tim: So Sydney tell me about yourself and how you came to early retirement.
Sydney: After I graduated from college, I went to work in San Francisco at one of the “Big 8” accounting firms (I think they are down to Big 4 now). I learned a lot there but I did not enjoy my short tenure AT ALL. After four years there I landed a dream job with a venture capital firm as their controller (and subsequently their Chief Financial Officer). I have to say that I entertained visions of retirement as early as I began my career. I always longed for more vacation time; work just felt like it was always getting in the way of me enjoying my life! Even though I loved my job for most of my venture capital career (for a job), I remember early on in, spending HOURS using a program that Vanguard used to sell–a retirement planner. I loved that program. I kept playing with the assumptions until finally I decided that I could retire at 45 if I planned on having a part-time job in retirement at that point. It told me exactly how much I had to save each month, and I always tried to save even more.
In the end, I did it by age 44, and have been retired for almost 6 months now.
Tim: WOW! You are my role model. I’m trying to 45 as well. So what do you feel are the most important things people can do to get ready for an early retirement?
Sydney: Well, it probably goes without saying, that knowing how your finances will stack up is the bedrock of getting ready for retirement. If it is something you really want, you will probably have to be a bit creative. Are you willing to work part-time in retirement or give up some things you currently spend money on? If you are really obsessed about retirement like I was, you brain is always coming up with new ideas about how you might help achieve it.
As to getting mentally prepared, I’m learning, at least for myself, it’s something you just need to figure out as you go along. I read some great books about the non-financial aspects of retirement planning, and had all the lists, ideas of what I would be spending my time on. Turns out I didn’t really need to do all that, and I spend my time more flexibly than I had thought I would. Seems a lot of those books recommend you build a new structure for yourself, which I find restricting. I’m retired now, I don’t want anymore structure (or at least very little of it). That is probably hard for a lot of people–learning to go with the flow rather than forcing it, based on what you think you “should” be doing.
Tim: So how did you figure out you have ‘enough’ money to retire?
Sydney: As I previously mentioned, I started out playing with retirement software to see how the numbers worked out early on in. There are several of these calculators on the internet that do a good job of getting a pretty good ballpark. Unfortunately, as I got closer to the time I wanted to retire, I didn’t feel like I wanted to go with that plan of working part-time. So I created my own Excel spreadsheet based on my assumptions for portfolio earnings, inflation and my longevity to see if I could refine the plan more closely.
I wound up deciding:
- I would be willing to make more budgetary sacrifices to retire
- I would be more than willing to sell our vacation home to retire
- I would be willing to downsize my home at some point in the future (or take a reverse mortgage).
I also really studied the plan and figured out a) in my last few decades of the plan, I probably wouldn’t be spending as much (less travel, and probably more hanging around the house) and b) if I took into consideration where I thought my tax rates would be more specifically, I could see that I actually had more money than I thought. The spreadsheet got more and more complicated, but more and more precise–something most of the retirement software doesn’t have the ability to do: get creative.
Tim: You’ve only been retired for a short while now, how are you adjusting?
Sydney: My husband retired a few years before me. So a lot of the adjustment was just us figuring out how to be retired together without driving each other nuts. I quickly learned that I needed my own “room” for my computer. Being together in the same room all day wasn’t really that good for us. Most days, we each have our own thing going on during the day, and then hang out together in the afternoons and evenings. Works for us.
I also had to learn to stop feeling guilty if I didn’t “achieve” during the day. It’s a bit of an adjustment to just let yourself enjoy your life! But I’m very used to my newfound freedom now. Without the time constraints formerly imposed by my job, I feel less selfish with my time, less hurried, much more flexible. Minor irritants like traffic, slow service, family obligations, and unexpected changes in plans don’t bother me at all now. It’s just easer to take things in stride when you own all your own time.
Tim: So your husband went first? Interesting. How has he adjusted to your retirement?
Sydney: My husband is really a laid back kind of a guy, so he would say it hasn’t been a problem for him. But I think the truth is that it did take some getting used to for him. Although I’m laughing thinking about the beginning–I kept saying “I know you think I’m just lazy ’cause I’m not doing anything!” And he would say “NO, I think that’s great!” And he really did–I was just having problems with my own guilt for not achieving all the things on my “list,” and I would attribute these thoughts to him. But it was really ME thinking I’m lazy–not him!
Tim: That is funny! So it might be a bit early to ask but how has your cost of living been in retirement? Are you about what you expected?
Sydney: When I first worked up the retirement budget, I learned something very important. About half of the budget was discretionary items. So, when we have an unexpected expense, we have to find some place from the discretionary part that has to give. This year, we are way under budget in travel because we had some other big expenses come up in other areas–so this is where we made up the difference. Watching the stock market tank since my retirement has also had an impact on the spending. I think we are being a lot more careful this year in particular (being the first year AND having the market behave so badly). But I’m glad we’re off to that kind of start, so now I know we have it in us to make these kinds of adjustments.
Tim: I suppose it is better to learn in the beginning the trouble with a down market. So has the recent poor market performance impacted any of your retirement plans?
Sydney: I suppose if it didn’t get better in 2 or 3 years, I might re-think that idea of part-time work. But so far I’m not looking at the want ads.
Tim: So speaking of something a little like work, why did you start blogging?
Sydney: Blogging was just a recent discovery for me. Last year, several months before I retired, I took a long vacation from my job to go live in New York City with my husband for a month. I thought learning to blog would be a fun way of keeping our friends and family up on our adventures long distance. Well, I was hooked. I couldn’t wait until my retirement to blog more regularly. Plus, I thought I would need some more hobbies when I retired–little did I know how consuming this one would be! I’ve spent so many years using the nerdy accounting side of my brain, it’s so nice to do something creative for a change! And with blogging, it’s even more engaging because you wind up having great “conversations” with others out there that are thinking about the same issues as you are!
Tim: That’s great! So any parting words of wisdom about being actually retired?
Sydney: I think everyone should know that it takes a few months to get your rhythm down. You feel like you’ve waited so long for retirement, you just want to jump right into the business of getting through those to-do lists, having fun, learning new hobbies, exercising, taking classes, etc. etc. It’s a lot to tackle all at once and will overwhelm you. I recommend not expecting so much from yourself right from the get-go. Just get used to the way things are, you’ve got all the time in the world now.
Tim: Thanks for taking the time to do this Sydney and take care.