Posted by Robert on January 30, 2012
What makes a smooth transition to retirement? I personally didn’t have anything in mind. In the first week or two that I stopped going in to work every day, I had more naps than I’d care to admit. I’ve also read a lot, but too much of it has been internet news (or entertainment). Something that’s important to me is to spend my time doing things that are worthwhile. That’s why I’ve decided to spend more time volunteering at my children’s school and at the YMCA.
It seems that volunteering is a common theme among retired people. At the YMCA, I met a woman who explained that she’s currently transitioning into retirement. Without being rude, she is quite a bit older than me, probably nearing the normal retirement age. She worked for years as a psychologist, helping children (eg. with ADHD) adjust to their usual environments, such as school. She has decided that she wants a smooth transition to retirement. Her first step was to stop taking on new clients. Each client is a relatively short term project, measured in months, not years. This reduces her commitment (and income, I assume), without ending it all at once. It also gives her a modest amount of extra free time.
Most people, after working full time for the majority of their lives, crave a routine and a feeling that they are contributing to a cause larger than themselves. The woman I met has chosen to volunteer at the YMCA in order to be part of a group effort and to have a time commitment that builds into her routine. I’ve talked with other people who either worry what they would do with the spare time afforded by retirement. They seem to take literally the proverb “idle hands are the devil’s playthings”.
That may hold true for some people, but having the luxury of being able to choose where and how to spend my time gives me options that wouldn’t be available otherwise. My favourite things to spend my time on relate to my interest in public education. I regularly spend time in our school, volunteering in one or the other of my sons’ classes, or joining them on field trips. I also talk with other parents about their experiences with and expectations for our school. I have the luxury of being able to read news, scholarly articles and books related to the education issues that our school and our system are facing.
None of these activities were planned as a transition to help smooth me into retirement. But I think that a smooth transition is certainly worth the effort. I continue to try and sort my activities into a regular schedule that produces a routine. Fortunately, whenever I feel that I’m wasting my time, I can take my daughter (who’s not in school yet) and play with her. Nurturing my kids is time well spent.
Do you have plans to ease the transition from one stage of life to the next?
Posted by Canadian Dream on January 26, 2012
I’m currently on a business trip which I made the mistake of packing for at the last minute. While heading out the door I had the feeling that I was forgetting something, but could not determine what it was. So I left anyways.
After driving for an hour with that feeling I finally figured out missing: my dress shoes and my bag of all toiletries. So I had some time to determine what I was going to do about this.
The dress shoes I determined I was just going to live without. I had black hiking boots on in the car and some jeans. So I’ll skip my dress pants and wear the jeans to make due. I’m not buying a new pair of shoes for just two days.
The toiletry bag was more of a problem. I’m not going away for two days without brushing my teeth..ick. So I first went to the hotel to assess what they had in the room. I was somewhat in luck that they had a little tub of shaving cream along with the standard soap, shampoo, conditioner and hand cream. I also check the guest services list to see if they offer a program to offer a free…whatever…in case I forgot something. No luck there.
So I then tracked down the nearest drug store and went shopping. I skipped any of my usual products and strictly looked for the cheapest thing I could get (its just for two days so I live with it). I found a toothbrush on sale ($2) and travel size toothpaste ($1.29) and disposal razors ($4). So including tax I covered my mistake for $8. Overall not too bad.
Yet what stuck me about this entire event was how people tend to over pack as not to forget something when traveling. I forgot two fairly important things and it only cost me $8 and some minor inconvenience. If you stay flexible about your plans the reality is forgetting something is likely not a big deal. It will certainly cost you money for the odd mistake, but really carrying every little thing you may need is more of inconvenience with overly heavy bags in my mind.
So how about you? Do you pack light and accept the odd ‘oh crap’ moment or do you pack everything but your kitchen sink?
Posted by Dave on January 24, 2012
This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I am by far the last person to ask about specific investing advice (for now, I hope to change this in the near future). What I can tell you is what I am looking at right now in my future investment plan and why I am going to do it this way.
I have an undergraduate degree in Economics (which doesn’t really mean a whole lot, I do not claim in any way to be an Economist, but I sometimes remember some of the stuff I tried to learn in the four years of school I was paying for) – one of the main facets of Economics is an efficient market, whether it is in a labour market, commodity marketplace or in the case of investing stocks and bonds. The efficient market hypothesis (as it applies to stocks) basically states that prices reflect all known information available. A lot of investing books use this hypothesis to tout index funds, essentially saying “the market is efficient anyways, don’t try to beat it, just own it (through index investments)”. I generally agree with this, and think that index investing is right for most people – it’s safe (or relatively safe, as compared to either keeping cash under a mattress or picking stocks based on a hunch) and pretty easy to do, I just don’t want to do this.
I’m not eschewing index investing due to its simplicity – I’m pretty lazy and would enjoy something like a Couch Potato Portfolio, where I rebalance a few times per year and generally don’t worry about my investment otherwise, compared to a dividend portfolio of single stocks, which require constant monitoring. No, I’m going to invest in things that are going to pay me cash now, not later.
Why is having cash now important to me? There are a couple of reasons:
- I’ll need cash when I retire – a constant cash flow that comes from investments such as stocks, bonds and REITS will replace my salary at some point (hopefully). Having to sell off the stock itself does not seem like a good long-term plan to last through retirement. Dividends (or interest) paid out will allow me to own the original investment (which will hopefully appreciate).
- I don’t really trust the marketplace – This may seem like a silly reason to choose an investment, but for me I would rather have cash in my pocket now and see money coming in rather than investing in a company hoping to pull my money out at some future time. I realize that I am a little crazy for this, but rather than seeing the stock appreciate, I would rather take a portion of my investment off the table.
My first reason is perhaps a little more rational than the second, but they both work for my purposes. To me, investing has a lot to do with personal preference and these are mine.
Do you invest for capital gains, or cash flow, or a mix? How do you decide (or did you decide) on the type of investments you were looking for?
