Have you ever noticed that the time it takes you to do something expands to fill the time you allow yourself to do it?
I see this most frequently at work. If I have 5 tasks to do and all day to do them, it takes me—surprise!—all day. If I only have half a day to do the same five tasks, however, I am somehow able to check them all off my To-do list before lunch.
I don’t think I’m alone in this. You do it too, right?
Too Much Runway
With that in mind, think about your retirement. The typical retirement age is 65, which means we give ourselves about 45 years to get “Retirement Ready.”
At the risk of stating the obvious, forty-five years is a LONG time. Too long. Giving yourself that much runway almost guarantees that you will procrastinate and not take things very seriously. After all, there’s always next year (or next decade).
What would happen if you only gave yourself 40 years? Or 35? Or 10? Answer: You’d be much more serious about hitting your goal. You’d save aggressively, spend intentionally and invest wisely. How much could you shave off the typical 45-year timeline? Let’s look at an example.
Ben and the Incredible Shrinking Career
We’ll need to make some assumptions here, but just keep in mind that the end result is more important than the assumptions. Let’s say you have a 20-year-old guy named Ben who wants to retire with $1 million. Let’s assume the markets return 8% per year and Ben makes $50,000 per year throughout his entire career and never gets a raise.
Given those criteria, if Ben saves about 5% per year he will hit his $1 million goal in 45 years. But what if he saves more?
Save 10% = Retire in 37 years
Save 15% = Retire in 32 years
Save 20% = Retire in 28 years
Save 25% = Retire in 26 years
So Ben could retire in his 40s or 50s instead of his 60s if he decided to spend his money on mutual funds instead of mojitos.
I’m guessing I have exactly zero readers that are 20 years old, but the above math can apply to you as well. Sure it won’t be as dramatic because you don’t have as many years as Ben, but you’re also not starting from $0, you’re in your prime earning years, your kids are grown and if you’re over 50 then you’re eligible to make catch-up contributions to your retirement accounts.
You probably won’t be able to shave 20 years off, but could you shave off one? Five? Seven? Each year is a year you can spend with your spouse and friends instead of your boss or that difficult client. It’s a year you can spend seeing the world instead of staring at your cubicle. It’s a year you can spend sitting at the beach instead of stuck in meetings.
With so many people behind on their savings, retire later is a common piece of retirement advice. Given human nature, however, retire early might yield better results. And don’t forget…
Life is short. Be intentional
Retirement planning affects almost everyone so, not surprisingly, there are a lot of people writing about it. I do my best to bring you helpful information each week, but there are lots of other writers out there producing great stuff as well.
With that in mind, I thought I’d start periodically highlighting some of the best retirement articles from around the web that I think are interesting and helpful.
This week, I’ve selected several articles from my fellow writers over at Dow Jones MarketWatch. There is some great stuff here, so set aside some time this weekend to grab a cup of coffee and do a little reading.
How to retire early – 35 years early. By Andrea Coombes. An interesting interview with blogger Mr. Money Mustache on how he used some unconventional thinking to retire at age 30.
Retirement: Two different views on the 4% rule. By Wade Pfau. The 4% Rule is a common rule of thumb, but it’s not perfect. Wade gives a few thoughts on whether or not you can rely on 4% as a safe withdrawal rate.
What’s the best age to retire? By Robert Powell. This article covers many of the factors that should weigh into your decision of when to retire.
Retire happier: Control your medical costs. By Elizabeth O’Brien. A few strategies for keeping your health care bills from swallowing your retirement income.
8 habits of highly successful retirees. By yours truly. These are the habits that make retirement remarkable.
Have a great weekend. And remember…
Life is short. Be intentional.
P.S. From the “where credit is due department”, thanks to my friend Joshua Becker over at Becoming Minimalist for giving me the writer roundup idea.
“One cannot really come to appreciate one’s life, save by playing with it and hazarding it a little.” ~ Jack London
Just over a month ago we packed our bags and hit the road for Mini-Retirement #1. The trip was part vacation and part experiment as I tested out some of the things that I’ve been writing about here at Intentional Retirement.
Before I fill you in on how it went (spoiler alert: it involves a visit to the emergency room), let’s do a quick review of the “What?” and “Why?”
What is a mini-retirement?
A mini-retirement is when you take small chunks of your retirement (say a month or two) and spread them out during your working years. That way you can do some of the things that you’ve been putting off until “Someday” while you’re still relatively young and healthy and you’ve got your kids and/or friends around to enjoy them with you. A mini-retirement can focus on travel, hobbies, or anything else you’ve wanted to do but have been putting off until retirement. For more on the concept read this: The Case for Mini-Retirements.
Because you only have one short, precious go-around at this life. You can either spend it dreaming about “Someday” or you can decide what you really want out of life and start taking those plans very seriously.
How did things go?
When I first proposed the trip to my wife I told her it would either be a great time as a family or the biggest mistake we ever made. Thankfully, it was 100 percent the former. The weather was perfect, the people were friendly, and the scenery was absolutely amazing. We hiked places like the Cliffs of Moher and the Wales Coast Path. We frequented local pubs where live music, a cold pint, and friendly conversation with the locals were always on tap. We took guided tours through a few thousand years of history in places like Stonehenge, the Roman Baths, Buckingham Palace, Westminster Abbey, the Tower of London, the Guinness Brewery, and the Jameson Distillery. Most of all, we spent four weeks of relaxing, memorable, focused time as a family. I could go on and on about what we saw and did, but instead I thought I’d share a few takeaways from the trip that you can use for your own life and retirement.
Have a quest. All told, we were gone 31 days, but the trip was much more than that. It was 9 months of saving, planning, anticipation, dinnertime conversations, overcoming obstacles and figuring out logistics. And once the planning was over we actually got to summon a little courage and sail away from safe harbor. We got to have interesting experiences and make memories that will last a lifetime. We got to return home different than when we left. In short, it wasn’t a vacation. It was a quest. A quest can take an ordinary month or year and turn it into something interesting, exciting and memorable. There are about 25 weeks left in 2014. What kind of quest can you dream up?
The conditions are never perfect. Had we waited for the stars to align perfectly, we never would have gone. The time never seems to be right. You could always use a little more money or a few more days at the office. But we went anyway (non-refundable airfare and accommodations are always a good motivator) and you know what? Everything worked out great. So don’t wait for the perfect time. It will never come.
If it’s going to be, it’s up to me. Write that on your bathroom mirror. It might sound a little corny, but at the end of the day, it’s not your boss, your spouse, your trainer, or that retirement blogger who are going to make things happen in your life. It’s you. Period. No one can live your life for you. The hard work of making things happen is your responsibility and the satisfaction of a life well lived is your reward.
Your health is WAY more important than you’re making it. Almost everywhere we went there were tour buses loaded with traditional retirees. Some of those people were spry and fit and able to get around, but many of them had visible health issues and were limited to exploring within a very short distance of the bus. Contrast that with the couple we saw while hiking in Wales. They looked to be in their mid-70s, but you could tell that they had worked at staying fit and healthy throughout life, which is why they could head out for an all day hike on a rugged coastline. We can’t control everything about our health, but we can control much of it. I came home from this trip with a renewed desire to be healthy so I can enjoy whatever years I have left to the full.
Solitude begins where the pavement ends. The Cliffs of Moher are absolutely stunning. They are sheer, 600-foot cliffs that abruptly delineate where Ireland ends and the Atlantic Ocean begins. The parking lot was a zoo. The visitor center too. The concrete viewing platform was pushing allowable capacity. But if you walked 50 feet (Seriously. 50 feet.) away from the pavement, you pretty much had the path to yourself. What came next was one of the most beautiful 8-mile hikes you could ever hope to take. Rolling hills. Beautiful wildflowers. Grazing sheep and horses. And mile after mile of those cliffs all to yourself. Too often people pull into the parking lot, get out for a quick look, check off the item on their bucket list, update their status on Facebook, and then move on to the next place. The more I travel, the more I realize that some of the best things are found away from the crowds and off the beaten path.
Live an extravagantly modest lifestyle. We’ve learned a few tricks for traveling on a budget over the years, but there was no getting around the fact that this trip was expensive. That’s ok though, because we’re willing to spend miserly on things that aren’t important to us so we can spend a bit more extravagantly on things that are. I like this way of thinking because it provides you with a bigger “return on investment” for the dollars that you’re spending. You can read more about it here: The benefits of an extravagantly modest lifestyle.
Most of our excuses are bogus. People are nice pretty much everywhere. They don’t hate Americans. The food won’t make you sick. You can afford it. You have the time. The excuses we tell ourselves are usually red herrings for “I’m not making it a priority and I don’t want to put in the effort.” Sorry if that’s blunt, but it’s true. If it’s not happening, it’s almost certainly your fault. You can make that truth sting less by deflecting the blame onto something else, but that won’t get you any closer to your ideal life.
Things will go wrong, but you’ll figure it out. My previous point doesn’t mean that things won’t ever go wrong. They will. I can’t think of a trip where something hasn’t gone comically wrong. I sliced my thumb open cooking a late dinner in a small town in England and had to figure out where to go to get stitches. I lost my credit card in Paris. I had my car break down in the middle of nowhere in El Salvador. Yes, things will sometimes go wrong when you travel, but that’s not a reason to stay home. You’ll figure it out and move forward. It’s all part of the adventure.
Rent houses whenever possible (they’re usually cheaper and better than hotels). Hotels are small, cramped and impersonal. Houses give you a place to spread out. They give you a place to cook meals and do laundry. They make you feel more like you’re at home. Not only that, but they put you in a neighborhood so you can get away from the touristy places and experience the restaurants and shops popular with the locals. We usually rent from either Airbnb or VRBO.
The longer you can go, the better. All vacation days are not created equally. Modern travel can be challenging. Navigating airport security and then spending the day in Peasant Class on a cramped airplane can be exhausting. If you take a seven day vacation (the typical break in the U.S.), two of those days are spent in the aforementioned airplane and two of those days are spent either a) recovering from the airplane or b) packing up to get back on the airplane. That leaves 3 actual days of vacation. 3 days is a weekend. So basically, our modern vacations are super expensive, exhausting weekends. You can remedy this by taking a two week vacation (or three or four). When you do that, the travel days are a smaller part of the whole and you can actually enjoy your time away.
Go where the dollar is strong. One reason we chose Ireland and England was because my wife wanted to be somewhere English speaking for our first experience with such a long trip. I doubt we could have made a worse choice when it came to expenses. The Euro is strong against the dollar and the Pound is even stronger. Between the conversion rate, the VAT tax, and the fact that major tourist cities are expensive to begin with, we could pretty much count on everything being 2-3 times more expensive than at home. It doesn’t take long when you’re spending $25 on a cheeseburger or $8 on a pint of Guinness before you decide that your next trip will be to somewhere like Ecuador or Vietnam.
Last, but not least: Don’t wait. “I wish we had started doing these sooner” was a common refrain toward the end of the trip. I can’t turn back the clock, but I’ll definitely make use of mini-retirements in the future. The lesson here was not to wait. Delayed gratification is overrated. Regardless of whether your goal is travel or something entirely different, get started on that now. Doing something that you’ve always wanted to do is like planting a tree. Sure, the best time to start was 20 years ago. But the next best time to start is now.
Thanks for following along with this little adventure. I hope you found something useful or encouraging for your own life. Also, thanks for being patient while I took a break from writing during the trip. I’ll get back to my normal posting schedule now that I’m back. And remember…
Life is short. Be Intentional.
P.S. If you want to see some pics from the trip, just visit my Instagram page.