A few years ago, my family and I took a one month mini-retirement to Ireland and England. Before that trip, we applied for two British Airways Visa cards (one for my wife, one for me). Each card gave 100,000 frequent flier miles for signing up and meeting a minimum spend. We used some of the miles on that trip, but most of them have been sitting unused (dumb!). I recently got an email that said the miles were about to expire, so I did what most people would do. I booked an 18-day, 25,000-mile trip around the world. I’m leaving soon and I’d love to have you follow along.
A bit about the trip
I’ll keep the specific destinations under wraps for now, other than to say I’ll be leaving home and flying west. My itinerary has 10 flights and I’ll be spending time in 4 countries (plus two more for connecting flights). That’s waaaaay more stops than I would normally recommend for a trip of this length, but I’m not really looking at the trip as a relaxing vacation. Instead I’m viewing it as a bit of a combo between a work trip and a lifestyle experiment that will give me some interesting things to write about at Intentional Retirement (as well as our Facebook page). I’m able to connect into my work computer remotely and I have a phone plan that works seamlessly in 170 countries, so I’ll be communicating with clients and working a “normal” day most days. I also have some fun activities booked at each destination, so I’ll be writing about those, as well as about things like how I plan trips, how to pack, demystifying travel, spontaneity, being proactive in retirement, designing your ideal lifestyle, taking risks, finding your purpose, location independence, remote work, overcoming excuses and living an intentional life.
The expiring miles were a good excuse, but truth be told, the trip has a bigger purpose. My goal with Intentional Retirement is not just to sell books or write articles, but to help people actually make positive changes in their lives. To nudge them from apathy to action. So I hope the trip is fun and interesting, but mostly I hope it inspires you, in some small way, to get your own dreams off the drawing board.
Next week I’ll post an article or two about how I plan trips and what I’m packing for this trip (hint: almost nothing). Then I’ll hit the road. I’ll be posting articles to the site as I go, but I’ll also be posting some pictures and videos to our Facebook page, so follow along there to see the good, the bad and the ugly of how the trip is going. And if you have any friends who might be interested in following along (or who, like you, want to live an intentional, meaningful life), please email this article to them or share it on social media. Have a great weekend! And as always…
Hardly a day goes by that I don’t see an article about how to live a longer life. Drink coffee. Don’t drink coffee. Eat a paleo diet. Be a vegetarian. Do yoga. Meditate. Do this to avoid Alzheimer’s. Do that to minimize the risk of prostate cancer. Of course, there’s nothing wrong with wanting to be healthy and live a long life, but what about actually having a life worth living? Isn’t that more important?
A long life is good, but only if you’re healthy, happy and fulfilled. So try to get your recommended fruit and veg, but don’t forget why you want those extra years to begin with. Is it just to be alive? To check off another year on planet earth? Or is it to actually use those years to live a meaningful life? Of course, everyone would say it’s the latter, but our actions don’t always reflect that. We procrastinate. We don’t take our plans and dreams seriously. We put things off until “someday.” How can we do better? Below are a few practical ways to add life to your years (rather than just years to your life). Each is punctuated with a quote taken from the essay On the Shortness of Life by Seneca.
Carl Sandburg once said “Time is the coin of your life. It is the only coin you have and only you can determine how it will be spent.” A few extra years would be great, but how have you spent the last 10 years? How are you spending this year? How about today? Stop wishing for more time and start actually using the time you have wisely.
“It is not that we have a short time to live, but that we waste a lot of it. Life is long enough, and a sufficiently generous amount has been given to us for the highest achievements if it were all well invested. But when it is wasted in heedless luxury and spent on no good activity, we are forced at last by death’s final constraint to realize that it has passed away before we knew it was passing.”
Don’t spend your precious time and money pursuing and maintaining a lifestyle that isn’t what you want. That feels pointless and toilsome. Decide what’s important to you. Invest in that. Cut out everything else.
“It is inevitable that life will be not just very short but very miserable for those who acquire by great toil what they must keep by greater toil. They achieve what they want laboriously; they possess what they have achieved anxiously; and meanwhile they take no account of time that will never more return.”
One of the biggest unintended consequences of “planning for retirement” is that it trains us to procrastinate. Yes, it’s important to save for your future, but that doesn’t mean ignoring your present. Life is meant to be lived. If you’re trading the very best of your present for some uncertain future, you’re doing it wrong. Plan for your future. Make the most of your present. Those things aren’t mutually exclusive.
“Putting things off is the biggest waste of life: it snatches away each day as it comes, and denies us the present by promising the future. The greatest obstacle to living is expectancy, which hangs upon tomorrow and loses today. You are arranging what lies in Fortune’s control, and abandoning what lies in yours. What are you looking at? To what goal are you straining? The whole future lies in uncertainty: live immediately.”
Mini-retirement defined: With traditional retirement, you save the good stuff for that 20-year period at the end of life. The idea of mini-retirements takes some of that 20-year period (say 5 years), breaks it up into 1-3 month chunks and spreads it out over your working years. A mini-retirement is longer than a vacation, but shorter than retirement. It may involve part-time work, depending on the length of time away.
I recently received this email:
I’m not usually one to write a note like this out of the blue, but I somehow feel compelled the day after my wife and I booked one-way tickets halfway around the world. I just wanted to say a simple thank you for being inspiring to me for the past few years …And now we’re only a couple months away. I started reading your site after the newspaper had your column about mini-retirements. Since then we have talked about trying something like it. Now, both age 51, we are taking leaves of absence for 8 months and moving into rural New Zealand. I have secured a job there with less time commitment (and less income) than my current job, and my wife has a work visa so she will have the ability to find something once we arrive if she is inclined. This is a bigger chunk of time than the mini-retirement you wrote about. But we are both lucky enough to have employers who have agreed to allow for a longer leave and hold a spot for us — though we decided it would be worth it even if we came back and had to look for work. I don’t want to make this a long story, so…just to say–I know you put a lot of time and heart into your writing. Please know that you have fans out here who appreciate your insights. You are inspiring us to learn and grow, and to be intentional. Kia Ora!
As you might imagine, I responded right away. First, I just wanted to thank him for the kind email. Seriously, my heart grew three sizes that day. Second, I wanted to ask him if I could interview him for Intentional Retirement. My articles about mini-retirements are some of the most popular at the site, but even so, I think many people still dismiss the idea of mini-retirements as “fun to think about, but that would never work for me.” We can all learn something from someone who had all the same excuses we have, but made it work anyway. Pay particular attention to the answers to question 8 below. As someone who has helped people plan for and live in retirement for more than 20 years, I can tell you that the answers to that question are full of lessons, takeaways and insights (both financial and non-financial).
Just a quick note. In the Q&A that follows, I edited portions of the answers for length and also removed the names and other identifying information because the person wishes to remain anonymous.
1. Tell me a little about the mini-retirement you have planned.
My wife and I will be taking 8 months off our current full-time jobs to move to New Zealand where we will live and work in a small community. I will work there as a general practice physician, and my wife plans to work part-time remotely with her current employer. I will say I’m having a little trouble with using the term “mini-retirement” for this endeavor. Maybe there’s not an official definition of the term, but I think of mini-retirement as period of time without working at all. That said, when we read your pieces on mini-retirement that came out a few years ago, it helped nudge this dream into a plan for us. As far as terminology, maybe “trial semi-retirement” fits better since we will both be employed, and afterward, we plan to return to our current full-time jobs.
2. What prompted the trip? Why not just wait until retirement?
At 51 we are both still healthy and active. We want to do this while we can still enjoy many of the outdoor activities that New Zealand offers. We are empty-nesters and our kids are getting settled into their lives, but no grandkids yet. It may be harder to do this in a few years when we may have even more family ties to keep us closer. Our kids are young and active too, so it is also a great opportunity to bring them along for a visit in the middle of our stay to share the experience with us before they have families of their own.
3. Were you and your spouse on the same page from the beginning or did it take some convincing?
We were totally on the same page because we really enjoy travelling together and learning about the world away from home. When we go to a new place, we like to get outside the tourist areas. We try to immerse ourselves in the local culture as much as possible, though opportunity is limited during the traditional one-week vacation time. This is our chance to go for a longer period of time and immerse into the culture.
As a physician, I see a lot of advertisements about practices that need some extra temporary help. We have talked for a long time about the possibility of trying some of these locum tenens positions. These are short-term positions usually because a doctor is temporarily absent, or it may be after someone retires and the practice is searching for a replacement. The most challenging part for us was finding the time to go that would work for both of our careers while also making sure it worked with our family’s life.
4. How did your employer respond when you talked with them about it?
I can’t imagine any employer is very happy about an employee asking for 8 months off, but both our employers have been gracious about this. When we decided to set this plan in motion, we both felt it was the right time. If our employers were not able to hold our positions until we returned, we would deal with the job search when we returned to the U.S. Fortunately, both employers feel we are valuable enough to hold our positions for us. There will obviously be some changes since our duties have to be covered while we are away. We know we will come home to find the job we return to is different from the job we left. Looking through an objective lens, the duties we are both doing now are different from what we were doing 1-2 years ago as things naturally evolve. Ultimately, we knew this would be an adjustment with some potential regrets, but a greater regret might be not going. Neither one of us wanted to say later in life, “I wish we would have taken off on that adventure.”
5. What were the toughest hurdles to overcome or logistics to work out?
One of our biggest challenges will be missing friends, family, and our pets. We talked about taking our dog to New Zealand. Unfortunately, the hoops to jump through for a dog to go were more onerous than for us humans to get work visas. Also, she would have to spend a long time in the plane cargo hold and quarantined after arrival. We decided that it would be too hard on her even though we would like to have her there.
We bought our kids airline tickets as their present for the holidays, so we’ll get to see them for a while at Christmas, and we also have some friends planning to visit. Also, communication is much easier now with social media and video chatting, so we’re hoping that helps us stay close electronically.
As far as work challenges, I feel a lot of guilt leaving for that long with the expectation of returning to my current position. In doing so, I am asking my co-workers to cover for me for such an extended time that I’ll never really be able to pay it back. My wife has already hired her replacement for a job she loves and knows that her position will be different when she returns. Those are the most difficult personal and career challenges.
6. How did you pick your destination(s)?
Years ago, we started discussing trying a locum tenens job as a “someday” thing to do in later years prior to retirement. Mostly we considered staying in the US, but noticed a few positions were available internationally. New Zealand is among the few countries that will accept a US medical license as means to obtain a permit to practice there. Rural New Zealand, like much of rural America, has a shortage of primary care doctors. The practice I will be joining has used temporary doctors for years, but all the while they continue to search for someone to take a permanent position. So, there is the sense that I’ll be helping fill a need in the community there, while also integrating as a local New Zealander more than a short vacation would allow.
7. Anything special you need to do or plan to do with your house while you’re gone?
Fortunately, we will have family who will live in our house in the US and take care of our pets. Their availability to house-sit for the year really helped us choose when to take this time away. Before we secured a house sitter, we were asking ourselves other questions such as, “Is it time to downsize and sell our house?” but “What if it doesn’t sell or sells too quickly?” We also considered renting it for a year and the uncertainties of a being a landlord from overseas.
8. What are two or three things that you hope to see come out of the trip? This could be something you learn, a particular experience, a relational outcome, or whatever.
Mostly, I hope this is an amazing life experience for us. I look forward to the chance to learn about a new country and really get to experience the culture. I hope to learn about the healthcare system and bring back a new perspective for myself. I hope to return refreshed and recharged with a new appreciation for my job, and maybe there will be some things to share and integrate within our office.
We hope to continue to grow as a couple. The good news is we really like spending time together! During this experience, like we also expect in retirement, we will spend even more concentrated time together. As we watch retiring couples, that seems to have its pros and cons. We’ll find out what it’s like to start fresh in a new place far away from home. We’ll learn if combining travel and work like this is something we might want to do again down the road or if it will be something we do only this once.
We will live in a more minimalistic way than we do at home where we have accumulated 30 years of stuff. We will each be taking only one piece of luggage plus a carry-on for an 8-month trip, so soon we’ll see what it is like to live without most of our possessions. We will also both take a significant pay cut for the time we are gone, so we will find out how we manage living within a lighter budget.
Financially, this is a giant step backward in terms of saving for our eventual retirement. Overall, we have prepared fairly well for the future. We’re not in the category with some of the early retirement enthusiasts out there, but we currently have saved about 20x expected annual spending with a goal of between 25-30x by age 60. Depending on how our perspective on expected annual spending changes after this experience, we may adjust the numbers or time frame a bit. But it’s all a work in progress. Regardless, we should get there if we continue to work full time and save as we have been.
To use some of the terminology from your writings, this is our version 1.0 of retirement for this decade. We are certainly not done with our years of employment, but this is one iteration of what we are doing in our 50’s to prepare for that time. For now, all we know for sure is that we choose to control this particular slice of our time and money in this way while we are healthy enough to enjoy it.
9. Any advice for others who are considering a mini-retirement.
Ask me that after we get back…
Hopefully, I’ll have an opportunity to check in again with them over the next 8 months and let you know how things are going. Meanwhile, if you’d like to read more about mini-retirements, here are a few articles from the one I took a while back:
As you enter retirement, the temptation to do nothing can feel pretty strong after years of drinking from the fire hose of daily life. Unfortunately, doing nothing is not a good strategy for long-term fulfillment. It can be rejuvenating for a while, but it will get boring.
Your goal should not be to do nothing. It should be to do what excites you. If you’re feeling spent and burnt out, by all means take some time off and recharge your batteries. But after that, you need a plan that will keep you challenged and provide meaning and fulfillment. You need something that will help you stay active and use your gifts.
During your working years, that “something” was, to one degree or another, your vocation. Your job. That thing you did every day between 8 and 5 in exchange for money. But most people jettison their job once they retire. And when you subtract things—work, obligations, commitments—you create a void in your life where those things once were. That void can open you to self-doubt, regret, lack of purpose and boredom. The solution? If you take something out, you need to replace it with something else.
What is that something else? Leisure has a role to play (travel, relaxation, sipping mojitos at the beach), but it isn’t enough. As someone once said: “Leisure is a beautiful garment for a day, but a horrible choice for permanent attire.” My suggestion? Replace your vocation with an avocation.
A vocation is something you primarily do for money. You do it because you have to. An avocation is something you do because you want to. Because you’re passionate about it and it gives you a sense of purpose. It often has all of the positive aspects of a job—challenge, learning new things, social interaction, purpose—with one important exception: you probably won’t get paid. That might sound like a bad thing, but it’s actually good. First off, in retirement you don’t need the paycheck. That’s being handled by your portfolio and other sources of income (pension, Social Security). Second, when you remove the pay requirement, it opens the door to almost any hobby, activity or pursuit you can think of. If I had to feed my family based on my ability to create and sell paintings, we’d all starve. Remove the financial constraints, however, and I can paint for the pure enjoyment of it. I can take as long as I want to learn, practice, grow and develop without the pressure to monetize it.
History is replete with examples of people who pursued both vocation and avocation. Copernicus was a cleric by day and astronomer by night. Sir Edmund Hillary paid the bills as a beekeeper, but you likely remember him for his avocation as a mountain climber and the first person to summit Everest. Franz Kafka was an insurance assessor, but you probably remember him as a writer. Tolkien was a philologist, but you probably remember him for his novels. Harrison Ford pays the bills as an actor, but he moonlights as a pilot and a carpenter.
How about you? What would you do if money weren’t an object? If getting paid wasn’t a precondition? Not sure? Test some things out. Start experimenting. Maybe you want to go back to school or start a second career. Maybe you want to volunteer or start a small business. Maybe you want to learn to bake, paint, cook, collect something, write, garden, take photographs, draw, birdwatch, make pottery, scrapbook, sew, play a musical instrument or do woodworking. Maybe you want to become an amateur dietician, actor, archeologist, beekeeper, computer coder or songwriter. The possibilities are endless.
Again, the goal is not to do nothing. That just creates a void. The goal is to do what excites you. Yes, you may look forward to the day when you can quit your job, but just because you don’t want to work 60 hours a week anymore, doesn’t mean that you don’t want something that will give you satisfaction and a sense of accomplishment. If you want your retirement to be remarkable, have a plan to replace your vocation with an avocation.
Hardly a week goes by that I’m not asked the question: “Should I pay off my mortgage before I retire?” The answer, of course, depends. On math. On your situation. On your personal preferences. Let’s look through some of the key variables to consider and then I’ll tell you what I’m doing with my house (spoiler alert: I’m a big proponent of retiring debt free) and give you some tips on how to retire your mortgage early, should you choose to do so.
Variables to consider
Interest rate. What is the interest rate on your mortgage? If you buy a $250,000 home and have a 30-year mortgage at a rate of 4%, you’ll pay $179,674 in interest over the life of that loan. That same loan at 6% would cost $289,595 in interest, about $110,000 more. The higher your interest rate, all else being equal, the more incentive there is to pay it off sooner.
Other debt. Mortgage rates are typically lower than rates on other forms of debt like credit cards or car loans. If you look strictly at the math, it makes sense to pay off your higher interest rate loans first. If you carry a credit card balance or car debt, focus on those first. Once those are gone, you can target your mortgage.
Investment alternatives. Your house is an investment. Whether you use available cash to pay it off will partly depend on the other investment opportunities you have for that available cash. If your mortgage is 4%, but you have another investment opportunity that yields 8%, it might make sense to hold off on the house and invest the cash at the higher rate. Just keep in mind that paying off your house offers a guaranteed return (the interest disappears), while alternative investments likely do not.
Income sources in retirement. Think about your income sources in retirement. Social Security. Pension. Income from your investments. Add that up and then compare it to your retirement budget. Is there enough there to easily service your mortgage without limiting your other plans for retirement? If so, carrying a mortgage in retirement might not be a burden. If not, it might make sense to pay it off early.
Nest egg. Are you on track with your retirement savings? Are you maxing out your 401k and IRA contributions each year? If not, focus on those things first and then, if you still have some extra cash, consider paying down your house second.
Peace of mind. The decision to pay off your house isn’t entirely numbers based. I’ve had plenty of clients who could justify carrying a mortgage, but they paid it off anyway because they wanted the peace of mind of being debt free. I’ve never had a single client tell me that they regret the decision to pay off their house.
How long will you live there? Do you plan on downsizing to a different house or moving somewhere else in retirement? If you only plan on being in your current house for a few more years, it might not make sense to pay it off. If you plan on being there for a while, however, owning it outright would probably be best.
Tax considerations: Many people argue against paying off your house because of the “tax benefit.” Recent changes to the standard deduction make this argument less compelling, but even before then, I think this argument didn’t hold water. Consider a person in the 20% tax bracket who paid $10,000 in interest and got a $2,000 deduction. They paid $10,000 to get $2,000. Better to pay it off, spend a little more on taxes and save the $10,000 in interest.
What I’m doing and why.
As you’ve probably guessed (both from this article and others I’ve written on debt), I’m paying my house off early. I thought through the math, but to be honest, that was secondary. The three primary drivers of my decision are:
- Peace of mind: I sleep better when I’m debt free.
- Security: Debt adds risk and reduces cash flow. Both are bad for retirees.
- Priorities: According to the Employee Benefits Research Institute, the average retiree spends 40-45% of their budget on housing. I have other plans for that money! (For more, read The benefits of an extravagantly modest lifestyle)
A few tips to pay it off early.
Below are a few strategies I use:
- Set a goal and re-run the amortization schedule: If you have 7 years until retirement and want to have the house paid off by then, re-run your loan amortization for 7 years and figure out how much extra you need to pay each month to reach your goal.
- Make it automatic: Once you know how much you need to pay each month, make it automatic. Saving in your 401k is easy because it automatically comes out of your paycheck. Set up your extra principal payments to do the same thing.
- Refinance: Rates are still historically low. If you haven’t refinanced in a while, call your bank to see if it would make sense. Just don’t refinance into another 30-year loan. Keep the payback period as short as possible so more of your payments go to principal.
- Stop escrowing: This is more of a mental trick. When I started paying off my house early, I got discouraged each month at how much of my payments went to taxes, insurance and interest. So I called the bank and asked them to stop escrowing. Yes, I still need to pay my taxes and insurance, but now those bills come separately. Most of my payments go to principal and I’m forced to save extra to cover the taxes and insurance.
- For more ideas, read How (and why) to retire debt free and Your biggest retirement expense (and how to get rid of it).