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Thursday, July 24, 2014

Up and Out

Posted by Tim Stobbs on September 27, 2013

You are standing on a cliff with the best view ever, but you are also strapped into this device that is suppose to make you fly, but you keep doubting it will work…so do you ever jump off?

While that might sound extreme, it happens all the time to people on the edge of retirement.  You can apply logic and do math for years trying to sooth your fears, but in the end the final jump off that cliff into retirement is all about emotion.  Can you answer the question: am I ready for retirement with a firm “yes!”.

After all you are entering an entirely new phase of your life where you will start living off your assets rather than focus on growing them.  Fear is a normal response and frankly damn useful.  It’s good to have some fear and double check your numbers and get a second opinion (but don’t take the results too seriously…some places don’t really handle early retirement financially modelling all that well…case in point I’ve seen online calculators that won’t go low enough for my target retirement age).

It’s also good to do a little fear testing by playing the game: what’s the worst that can happen?  Some classic examples are: what if I run out of money when I’m 80 (solution: sell the house), what if I get bored (solution: have some hobby or travel plans lined up to keep you busy), what if I miss work (solution: consider what jobs that you could do part time or seasonal).  A large part of fear is not knowing the answer, so if you can come up up with some answers there is less to fear about the decision to retire.

Then once you address the fears about retirement you might need a bit of motivation to pull the pin.  So turn the fear game around and play the other side: what if things go better than I expect?  What if I get an inheritance that I wasn’t expecting? Go travel more!  What if I excel at one of my new hobbies and make money at it? I could buy better supplies and try out some really big projects! What if I find a part time, low stress job that I LOVE to do? Enjoy some of the extra money and then perhaps do some charity work with the rest.

Life isn’t typically all bad, there are some good things that happen to people as well.  So keep that in mind when you are standing on the edge of your retirement.  That way you can jump off your cliff and go up and out.  So what are your fears about retirement or ideas on what could turn out better than expected?

Comments

2 Responses to “Up and Out”
  1. Retired Syd says:

    Great post. The decision isn’t irreversible, especially if you retire young. If you hate it or you don’t like living on a reduced budget, go back to work and do it again later. It doesn’t have to be such a life or death decision.

    And to your point, I didn’t build in any budget for piano lessons when I retired. But now that I’ve discovered I LOVE piano, it turns out my blogging and freelance writing income pays for the lessons. Problem solved! (I could have just reduced the going-out-to dinner budget, or the wine budget, or the travel budget, or some combination of “electives” also. But this solution is no pain all gain!)

    But an unexpected inheritance would be nice too . . .

  2. Matt says:

    I’m standing on that cliff and just the other week applied and got a part time job that will still provide health insurance. It’s a big decision and after running all the numbers and using a financial plan I’m taking the jump. At 46 I think I still want to do something just not the full time gig that required me to have availability 7 days a week 16 hours a day. I wasn’t getting doctor wages. I will be next learning to do other things than save money for the future. A good friend got cancer and the wake up call to me is enjoy today as well as prepare for tomorrow.

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