I think perhaps people assume that when you give notice at work that it should be some sort of big deal. There should be shock, drama and all sorts of interesting things. In my case, it was mainly boring, except for one thing. Why was it boring? Because everyone involved in this decision knew it was coming.
It all started way back almost a year ago when I mentioned my plan to leave work would likely occur in the next year during my performance review (please recall I do blog publicly about my plans so work has been aware of them in some form for the last five years or so). My boss and I were discussing how much notice he would like and we agreed to a figure of at least three months.
Then earlier this year during the work planning cycle I mentioned that I was concerned about taking on a project that I wouldn’t see the end of. So I provided an updated on my plan and said that I would likely provide official notice after my summer vacation (I figure no one should make that sort of big decision without first being calm and relaxed – you know that feeling you have after not being at work for like two weeks). And on top of that, I have even been dropping comments into conversations with co-workers that I would likely be leaving work this calendar year.
So like I said everyone involved knew this was coming, hell, I even had an appointment for 8am on the day I got back to work from my summer vacation to officially provide my retirement notice. The meeting was only ten minutes long. I handed over my letter of official notice (that I wrote six months earlier) and had printed off over a month ago (it was sitting at the bottom of a file at my desk just waiting for me to sign it). So the conversation was short and I explained that my last day was Oct 27, 2017, but I was going to be on vacation prior to that so my last day in the office is Sept 15, 2017. I then entered this information into our online system (which by the way I actually submitted my retirement notice, I didn’t just resign) and with a click of a button my days as an employee were numbered (because it says right on the form you can’t delay or revoke your retirement after you submit it).
Therefore on the process side things went very smooth so far and no drama or surprises. Yet what I wasn’t fully prepared for was the emotions that ran through me on this day. I woke up sort of nervous. You know like when you have a important meeting or presentation to do. I got to work and I got a little light headed and clamming skin right before the meeting (again nervous…after all I was ending my career here). Then afterwards things got worse, I didn’t calm down or get better. In fact, I was a ball of conflicting emotions. I had feeling of being excited, fear, worry, anxiety and a good dose of thinking “what the hell am I doing?” all at the same time. It was like my entire body was vibrating on a slightly different frequency than normal. Then the nausea hit in the early afternoon and I went home sick for the rest of the day. I hoped it was food poisoning but in fact it may have just been emotional overload.
So despite having read a library of material on retirement I still wasn’t prepared for the emotional impact that hit me. You can think you are ready, but nothing will prepare you for actually ending your career and jumping into your new life. I wonder what other surprises await me in the days ahead.
It might seem odd to say this, but I’ll say it anyway: it’s easier to keep working than retire.
I know it’s a bit obvious in some respects, but I find with all our talk of retiring early on this blog perhaps we should revisit the other side of the equation. What happens to your retirement plan if you just keep working?
Well the good news for all the people that worry about saving enough money, is that every year you keep working the lower the risk you have of running out of money. It’s sort of a three fold compounding that occurs since you are living off your work income, you are still contributing to your accounts and your investments keep growing. Also you are at the very end of your savings cycle you are at peak investment compounding so if you ride this out for a year or two longer it can significantly stack the deck in your favour. For example, if I keep working at this point my net worth keeps climbing by roughly an extra $100,000 a year.
Another positive thing of keeping working is you can finish up any key projects you are involved in at your job. I actually knew a few guys over the years that planned on retiring after they finished up their last big work project. This provides some sense of closure at work since you are not leaving mid-way on something and also lets you feel like you have left a bit of legacy behind you. Both can be important depending your personality.
Another advantage of not leaving work is you get more time to prepare key people in your life,like your spouse, for the change . So you can talk more about the change retirement will bring to your lives, buy any key items they feel you need, or add a renovation project prior to leaving. What ever support they need to help sleep at night you can help with since you are not in a rush to leave work.
Then perhaps the most obvious reason of all: staying at your job is the path of least resistance. You don’t have to explain your retirement plan to anyone, you don’t have to justify your choices or go through the emotional upheaval of retirement. You can continue along in your life if you are enjoying it.
Perhaps the only downside to keep working is well: the work. If you don’t like what you are doing it can seem more like a prison sentence. Also you lose out of another year of freedom to do what you want.
Overall, I understand why people add an extra year or two to their initial retirement goals. It is very easy to do compared to actually having to retire. So would you keep working an extra year or not?
I was chatting the other day with someone about my plan to retire early and they noted that if things go wrong that “You may never earn this much ever again.”
To which I frowned and then replied, “But that doesn’t matter. I’ve NEVER spent my entire salary, so who cares if I fail and go back and earn less? I don’t.”
You see that is perhaps why I’m a LOT more relaxed about my plan to retire early than most people. I’m not obsessing about the fact I’m currently at my peak earning potential in my life. That I believe is the logical flaw that sucks in a LOT of people who fall into the one more year syndrome. They erroneously assume you have to keep working since you can potentially never earn this much income again. They confusing having to work again in the future with having to have the same income and/or career.
The issue comes down to this, even if things go horribly wrong and I have to go back to work for a while I am under no obligation to go back to my current career or pay range. Honestly, I earn currently north of six figures and only spend a bit over $30K a year. So in reality if I have to go back to work to save some more money my actually target is to earn more than $30K a year to allow some savings while paying the bills. So any job that pays $31K or more will work. It’s just a matter of how much do I want to save and when I quit again.
Of course this ignore the reality that we already have substantial assets and I would likely notice things going wrong sooner than later. Thus in fact I won’t even need to earn more than $30K to pay the bills, the fact of the matter is earning ANYTHING would result in me saving some money. So even some mindless minimum wage job at half time would be enough to help build up my savings again. It would just be at a slower rate than I’m doing right now.
So yes, I’m currently riding my peak earnings towards my early retirement date and if that is the case, so be it. I can give up the really high saving rate and roll the dice on my current plan. Yes, I may lose and have to go back to work at some point doing something, but if I win I will have an additional 25 years of time to do things that interest me. I know what I’m choosing.
So what about you? Would you spend an extra year or two working at my current job to buffer against ever working again or take the risk of having to do some work in the future? Would you care if you worked again in the same field or not?