How to retire, even retire early

Retiring early is no easy feat. Many years of sacrifice, planning and hard work will get you there though. Here’s my list of suggestions for getting there (in no particular order).

  • Find an employer with a healthy defined benefit pension plan (Not Detroit or Stockton).
  • Quit buying shit you don’t need. Money you don’t spend can be saved and invested, or at the very least keep you out of debt. learn the difference between needs and wants. If in doubt ask someone else… You don’t usually NEED a new car, you WANT one. Let someone else take the depreciation hit and buy something used and reliable in the 3-4 year old range.
  • Make your savings automatic and pay yourself first. Set up an automatic savings program with your bank where you transfer out 10-15% of your earnings to invest (I’ll leave the how-to’s of the investing to you to investigate).
  • If you are married, stay married to the same spouse. Consumer debt and financial worries are one of the leading causes of marital stress and divorce.Giving away half of everything you have puts a crimp in retirement plans. I know it’s not always within your control, but do your best to keep it together.
  • Don’t count on marrying well, inheritance or the lotto to pull your ass out of the retirement fire late in life – odds are it’s not going to work out for you.
  • Maximize your pay by upgrading your education / skills. Always keep learning so that you can do higher level work thereby making yourself more valuable to an employer (hopefully higher wages result). If you don’t get rewarded for your new-found skills it’s time to move to an employer who will appreciate you financially.
  • Take on new challenges / promotions where possible to earn more money. Higher wages should mean that you are able to save more.
  • If you get a wage increase try banking the increase instead of spending it which is a tendency for most people.
  • If you live in a depressed area, and some areas seem to be chronically and perpetually depressed, it’s time to move on in spite of the fact that your forefathers forefathers settled the place.
  • Don’t go out to eat all the time. Making dinner is not really all that hard especially with a little planning.
  • Going out for dinner and wine / drinks with friends can be incredibly expensive. Entertain in more. Rotate having dinner parties with your friends and make it a BYOB event. If you are part of a group of 3-5 singles/couples you only have to host once in a while. Lots of fun, more privacy and, in my view, more relaxing than a restaurant.

These things are all a start. You just need to be planned and deliberate about retirement. The money will not simply and magically appear when the time comes. You need to pay attention and work at it, and if you do, you will be rewarded.

Holiday from holidays

I don’t know about you, but I find that holidays and traveling can be exhausting. I know – life is tough, what a problem to have. The problem comes with trying to cram so many activities into your days away. For me, especially when vacationing with others, this tends to result in early days AND late nights.

Over the past month and a half I spent Nine days in Maui with my family and eight days in the sticks at a friends cabin.

The trip to Maui was our first trip to Hawaii and I was impressed. We rented a 2 bedroom condo in Kihei from a lady in California. Top notch accommodations, excellent grounds and very well located. We tried surfing, snorkeling, did the Road to Hana drive, and went to a luau at the Royal Lahaina Hotel. All were great experiences.

We rented a couple of surfboards in Paia which we strapped to our rented van and headed for the surf. While I didn’t even make the attempt, the kids did. By all accounts surfing is clearly note difficult than it looks.

Snorkeling was fun for us, especially after we actually found out where the sea turtles hang out. A beach shared by a hotel and the city in Makena turned out to be golden. Lots of fish and a number of sea turtles were sited.

One of the highlights of the trip was the Road to Hana drive. Those of you who are prone to car sickness should either skip the trip or get set up with some suitable medication. The road is long and incredibly twisty-turny with a significant number of one-way bridges. It’s a bit of a drive but the scenery makes the trip well worthwhile. One tip for those of you considering the Road to Hana is that you download the Road to Hana app for iPhone or Android. It’s only $5.00 and uses your phones GPS functionality to guide you with voice commentary through your trip. We were impressed with the app produced by gYpSy.

In my view the highlight of our trip was the luau at the Royal Lahaina Hotel. This event is a bit pricey, however our daughter and son-in-law sacrificed an hour and a half of their time attending a timeshare seminar in order to obtain a significant discount for our group. The event was a 30th anniversary gift for us from them. Great food, lots of drinks, and excellent entertainment. Interestingly, there were at least a couple of hundred people there but it still felt like an intimate event – maybe it was the free liquor – if you go, remember to pace yourself. The drinks really hit you when they are free and plentiful.

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The trip to my friends cabin was great. A couple of successful days of fishing and some construction work on the place took up the bulk of our free time. Add in cooking supper, lots of board and card games and a movie every evening, and the time was chewed up pretty quickly. I brought a book but only had time for a couple of chapters.

The cabin is lakefront and quite a distance from the road. The place is most often dead quiet which is quite unnerving for someone used to the constant noise of the suburbs. Very peaceful and at night, without the lights present like in the city, it’s as if a blanket gets thrown over the place. Looking forward to next year!

A nice Father’s day

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I had a wonderful day today. It started off with a 5K run, my first after not running for a week for a variety of reasons. I then made a Lemon Merengue pie for consumption later in the day. After attending church we had lunch, which for me included Gouda cheese and pickled herring (gifts from my youngest daughter). This may seem like a strange combination of foods however they can be attributed to my Dutch heritage. I’m not a big fan of presents and my daughters have figured out that instead of a shirt or a tie or other stuff that I don’t really need, some Dutch delicacies are always welcomed gifts.

The afternoon was taken up watching TV (World Cup games from Brazil) and walking the dog.  We had the kids and my Dad over for supper and then, yes, more World Cup matches. My favorite team are the Oranje, otherwise known as the Dutch. Their Friday opener on Friday resulted in a 5-1 shellacking of the Spanish team. It was quite an exciting game. The Dutch team’s next game is this coming Wednesday against Australia. One of the added benefits of being retired is not having to worry about work interfering with the game schedule!

 

 

Still enjoying retirement after 2 years

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Well, having completed two years of retirement, I can still say that I’m enjoying it. We recently returned from a one month trip to Europe (Holland and Greece this time) and are preparing to take the kids to Maui for 10 days this July. I’ve been running fairly steadily and, depending on how I feel, manage to put in 5-7 K three times a week. I do need to spend some time though doing some other form of exercise, perhaps some weights and also some swimming and biking. My temporary contract work has been completed for the time being so I will likely have the whole summer off…oh well, I’ll just have to deal with it.

The reactions I get from people who ask me what I do and find out that I’m 54 and have been retired for the past two years range anywhere from shock to disbelief to awe. Most however seem a bit cheesed off and tell me they’ll have to work to 67, if they can retire at all. I’m not mentioning this to brag. It bothers me that people can be so negative which tends to cause me to become somewhat defensive. I’m the first to admit my good fortune at a 30 year career with an indexed DB pension plan. This is no different than someone having good fortune in business or investing, or inheriting money for that matter. Added to that however was a concerted effort on our part over the years to avoid purchases that would lead to big debt. At the time of my retirement everything was paid off and we had some money in the bank. I bought used cars, took modest vacations, refrained from eating out mostly, didn’t buy “toys” like trucks, boats, trailers, ATV’s, motorcycles, and tried to stay out of unnecessary debt.  I know people who are paying interest only on their mortgages and seemingly never expect to retire their mortgage. I don’t get that.

Some are incredulous at the fact that I’m not doing “productive” work. I always thought that your work was a means to support your lifestyle. If your lifestyle can be supported without work then it seems to me that you should be able to stop working if you want to. Someone else out there I’m sure is happy to have my old job. I don’t need to buy a bunch of crap or shovel money into my bank account. I have enough and what I receive each month is more than enough.

In any event, I can’t control how others feel and will simply have to take their negative energy in stride. What I can say is that I’m thoroughly enjoying retirement. The freedom to do, or not do, what you like is refreshing and liberating. Going to bed and waking up without any stress or concern related to work is a great feeling.

Want to retire early? Quit buying sh-t!

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Being retired leaves me with a fair amount of time to look into topics that interest me. As might be expected the whole issue of retirement is one of those things that is of interest to me. Not how to retire necessarily – as I’m already there, but perspectives on retirement – what to do, hobbies, how other people handle retirement, trips, etc.

Inevitably, especially when looking at comments sections of online news articles related to retirement, I come across a certain attitude that really concerns me. The whole issue of pension envy often rears its ugly head. I’m the first to admit that my career choice made it easier for me to retire (DB pension plan) although I had some significant input into how well I would retire. I indicated a few posts ago that I’m doing a couple of days a week of work with my old employer under contract. I don’t need to, but a little extra cash is always nice for projects or a rainy day. In truth, I don’t really need to work at all. My point here is not to brag, but simply set the stage for what will follow, that is my advice for how to be able to retire early, or if not early, at least comfortably when the time comes.

i shop terefor i amEarly on in my career I went into my bank to sign my mortgage renewal papers and had a casual conversation with my banker. During that conversation I asked her what I was doing wrong. I recalled how I had seen many people my own age or younger living in bigger houses than I had with driveways covered in new vehicles, boats, campers and the like. Her answer – “You’re not doing anything wrong, they are”. It turns out that much of the bling that others possess is as a result of borrowed money. I had a good job and found it unlikely that so many people would be making more money than I was, so her response was enlightening.

debtHad I still been making payments on all that STUFF I would not have been able to retire at 52. We lived within our means, didn’t borrow for warm weather vacations, renovations, cars, boats, trucks, campers and general rampant consumer spending. We saved and spent money on what we needed to. We carried no debt except for our mortgage which we pounded away at especially as we neared the point where I could retire.

Not only are many folks stuck with mounds of consumer debt, but the stress that comes with it can cause significant problems in relationships. It turns out that financial stress is a leading cause of divorce in our society. It’d hard enough to retire well when a couple are on the same page. In a case where financial stress is a foundational cause of a divorce the family equity pie gets split up leaving both parties to essentially start over again in separate households. I have former co-workers who went down this road which led them to have to split their pension with a former spouse and then continue on working full time in an effort to gather enough financial resources to be able to retire some day.

Now, I know that people get divorced for reasons other than money stress, but money stress is what we’re talking about here. Sometimes people change or want something different and pull the plug on a marriage. I get that and there’s not much you can do about that. My point is simply that rampant consumerism can have a detrimental effect on relationships and ones ability to retire.

No one is saying you have to live like a peasant your entire working life so that you can retire at some point. Take pleasure in the small things in life. As an example, instead of going out for dinner and drinks with your friends, take turns hosting dinner parties. They’re a bit of work but way cheaper and arguably more intimate and fun than going to a restaurant. Depending on how many friends you involve in this you will only have to take your turn hosting every so often. Save for your vacations instead of borrowing and digging yourself a financial hole that will be difficult to fill. When you do go on holidays (because we all need holidays) try to  get a place that will allow you to cook your own meals. This is way cheaper and probably better for you. Keep the menu simple so that you don’t feel overburdened with making meals – however, do treat yourself a bit and go out a few times – the best of both worlds.

So, even if you are part of a good defined benefit pension plan (not like Detroit or Stockton) you need to make sure that you have your finances in order when the time comes. There’s nothing more limiting than a bunch of debt owing when your time to retire comes.

Those of you without a DB pension plan need to do the same but also need to sock away a healthy portion of each paycheque to your retirement savings. This is essentially what DB pension plan members do, except that they do it as a group and have someone investing the money for them. Those of you not in a pension plan need to do that yourselves or you need to find a good financial advisor.

One additional point that I’d like to cover is that you should always be striving to raise your earning potential. Keep learning. Get yourself more qualified. Take on additional responsibilities. Strive for promotion. Change jobs if you need to. I’ve seen too many people who make low wages complain that they can’t retire, yet have put in little or no effort to put themselves in a position to make a better wage. Employers don’t just give you more money – you have to demonstrate your value for them to come across with more money. If your employer won’t, it’s time to look for other opportunities. Move if you have to. If there’s no work in your area and you didn’t move to seek better opportunities you shouldn’t be complaining.

In short, it’s really up to you. Be careful and responsible with your money. Don’t spend more than you make and avoid the stress and possible marital problems that come with indebtedness. From your early working days save 10-15 % of everything you make and invest it for the future – live on the rest. Strive to improve your qualifications and seek higher paying jobs and promotions. Take pleasure in the small things in life now AND when you retire. You can do it, you just have to be very deliberate about it.

Fall Vacation

Focus, focus, focus. You’d think that being retired would at least leave you with enough time to make the occasional blog post. You know that thing retired people say – that they are busier than when they were working – it’s true. I think it’s the lack of discipline that comes with not having a schedule. Your time just seems to go here, there and everywhere.

Some part time contract work (no I couldn’t resist as it is too financially lucrative and helps pay for the holidays like the one we’re on now), hobbies, volunteering, a kitchen renovation with me doing the plumbing, electrical, tiling (my wife painted because I can’t stand it),etc, and the rabbit hole of YouTube have limited my motivation to post.

We are currently poolside in Palm Springs where the e-mail to post feature of WordPress is coming in handy for this posting as I jab furiously at my BlackBerry with my thumbs.

We drove south and spent a night in Roseburg, OR and then two nights in San Francisco where I hadn’t been for about 25 years or so. Fantastic city – highlights were Fisherman’s Wharf, specifically Pier 39, Alcatraz, and a bus tour of the city. I sure do love that San Francisco sourdough bread. I think that I’ll try and cultivate a batch of sourdough started when we get back home. I need another hobby, but sadly probably not the carbs…

Will be spending the next few weeks soaking up the sun so as to get through the cold, wet winter weather at home.

Wishing all my American friends a Happy Thanksgiving!
Sent from my BlackBerry®

Too much time on my hands??

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I guess part of adjusting to retirement is finding a healthy balance in what you do every day. My wife and I just spent three relaxing weeks in Palm Springs, having gone back there after having returned home a month earlier. It’s a lot nicer to sit out by the pool in the sunshine than hide in our regular home from the rain. We didn’t do much – pool for a few hours in the morning and then again in the late afternoon for a few hours (4:30-6:30 or so). In between we either hid in the air-conditioned house reading, surfing the net, or went to the air-conditioned mall or movie theater. The trips to the theater resulted in my seeing Ironman 3, Star Trek: Into the Darkness and The Great Gatsby. Ironman 3 and Star Trek were both viewed in IMAX 3D which was awesome.

I’m one of those people who is interested in lots of stuff; that is, I know a little about lots of things but not a lot about a few things. In short, I’m kinda curious. The internet, wonderful tool ( read: time eater) that it is allows me to explore the many things that pique my interest which ultimately leads me down the rabbit hole that is difficult to escape from.

I don’t know how I got there, but my latest line of internet queries has led me to the possibility of building an electric car, energy self-sufficiency, earthship construction (environmentally sustainable housing – query it), emergency preparedness including living off the grid and preparing for the coming (armageddon, collapse, peak oil, nuclear war…insert your favorite tribulation here_________). Interesting stuff to be sure, but it’s a little unsettling to know that so many people are expecting things to get really bad in the short term. And here I am a mere 14 months into my retirement. Having said all this, there sure are a lot of creative people out there practicing their skills at keeping themselves and their families safe no matter what is thrown at them.

Spending most of my money on a remote plot of land, building sustainable housing off the grid, and raising chickens, cows, pigs and operating a garden or greenhouse – as romantic as that notion is – seems like an awful lot of work – which certainly doesn’t fit with my view of retirement. If the shit hits the fan, I, like most other people will have to figure out how to get by on the fly.

Note to self: Stay away from scary internet sites that suggest the world as we know it is about to end…and find something else to do…

On the running front I’ve settled on running 5k’s every second day or so, with the occasional longer run thrown in. Much more than that and I start hurting in places that force me to back off a bit. All in all I’m happy with the fact that I’ve been running consistently for over a year without a significant injury.

Back to digging my bunker…Just kidding…. :)

A day at the beach!

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Yikes, other than a mini-post a few weeks back, you folks haven’t heard from me for almost three months! I’d love to have all sorts of excuses but, sadly, I don’t have any. I guess I’m simply in retirement mode. I’m easily amused so I’m finding that I don’t have the problem of being bored that some retirees report. There’s no longing to go back to work – even after a full year off. That was one quick year.

IMG-20130505-00127We’re certainly getting our share of travelling in, having spent time in The Netherlands, the South of France, and as of next week, three separate trips to Palm Springs. Speaking of France, we flew to Marseilles, rented a car and drove along the south coast to cities including Cassis, Cannes, Antibes,  Nice, Villefranche-sur-Mer  and Monaco / Monte Carlo. If I have one piece of advice for anyone planning to travel to the south of France it’s that you need to get a copy of Rick Steves’ Provence and the French Riviera. The book is easy to carry in your backpack and is an incredible resource for travelers. Hotels, transportation info, places to see, restaurants, and local customs / idiosyncrasies are well laid out and very helpful. No matter where you are going Rick Steves has a great guidebook available through Amazon.

Also, if you are renting a car, GPS is a must as it removes a whole layer of complexity from your travels. Most GPS providers allow you to purchase and download destination maps which you install before you head out. My purchase of a European map for my TomTom GPS was money well spent as I used it in Holland, Germany and France. Amazon has a great selection of GPS units available.

Today we spent a nice day at the beach now that temperatures in our are have climbed substantially (32C or 90F). Hung out with the kids and had supper at the beach as well. All in all, a perfect day.

My running has been going pretty well although I’ve had to back off on the mileage a bit. I had managed to get up to 10K with some regularity but find that my right knee was clicking a bit and was a bit tender. After a few extra days rest the soreness went away and I can do a 5K without much of a problem. This morning’s 5K was good and the knee feels fine. I think I’m learning the truth of the saying – one that my brother is fond of – which states “You can’t out-train a bad diet”. I went from about 250 lbs to 220 lbs where I’ve been sitting for the past 2-3 months, in spite of a regular running regimen. I have to get serious on the diet aspect of my lifestyle. Hopefully a further reduction in weight will result in a merciful break for my knees.

My next post will be from beautiful Palm Springs California…

Thoughts and Prayers for Boston

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flagA terrifying and tragic day for those affected by events in Boston today. Our thoughts and prayers go out to the victims and their families and friends.

Americans are a resilient people and will get past this. Law enforcement folks are no doubt digging deep and will bring the perpetrators to justice. It’s too early to point fingers, so please folks, don’t jump to any conclusions until we have more information. Sent from my BlackBerry®

Running to and from my bi-weekly run with a friend…weird…

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This morning I did something that I would never have done before my most recent return to running. I have a standing bi-weekly appointment with a friend of mine for a run.  We usually drive to a local park and meet there for the run. Today, however, I was stuck at home without a vehicle. Rather than ditch our plans, or have him come to pick me up, I told him that I would run from home and meet him at the park which is some two kilometers (1 1/4 miles for you non-metric folks) away.

Kinda cool how running is becoming easy and enjoyable enough for me to run to and from my run. (I know it’s the same as simply going for a longer run, but it’s the actual conscious decision to forgo the use of a car that counts here!)

This afternoon I had the crap scared out of me. My wife, who has a long list of post-retirement home improvement projects, wanted to go to the local home show, so I said “sure”. You know the kind of event, the one with the caramel corn booth, the micro-phoned cleaning implement and cooking hucksters, fudge makers, and the on-the-spot orthotic booths (don’t ask me why they are there, but they seem to be ubiquitous at these types of events). Strangely, there were even some displays that actually had something to do with home improvements such as flooring, counter-tops  windows and the like.

It quickly became clear to me that retirement was pretty much over, for two very simple reasons. First, actually completing the projects on my wife’s wishlist was going to keep me very,very, very busy. Second, the costs involved in replacing  counter-tops, flooring and fireplace re-surfacing was going to give my retirement nest-egg a serious shit kicking…making me wonder if it wouldn’t have been better to stay at work!

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