[Heyo! Got another killer guest post lined up for y’all today, this time from long-time reader JW who now has a blog of his own over at The Green Swan. He just had one of those amazing conversations about life and money with his father, and thought we’d might enjoy hearing how it all went down. I think he guessed right – check it out :)]
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I have something personal to share with you all – an email from my Dad. And not just any old email… a special one, in which I’ve never received anything of the like before. My Dad was wanting to know more about my plans to retire early!
To say I was nervous when I saw his email would be an understatement…
While my Dad doesn’t know I have a blog (and neither do any other friends or family), he does know I do not want to work for the rest of my life. He knows I’ve accumulated a fair amount of wealth so far, although not the exact amount. And he knows my goal is to get out of the rat race early.
I have explicitly told him this before, but that’s the extent of it.
Until earlier in January… At that point, Pandora’s Box was opened. And it started with this email. (By way of reference, my dad is currently 63 and plans to retire in 2018)
My Dad’s Email:
Hi JW,
I always do a financial review at year end and it got me thinking about you wanting to retire early. I can relate, I was always planning to retire at 50. A few things to think about (you probably have already considered these, but anyway):
— I don’t think anything greater than a 7% long term return on your investments is realistic. You don’t have to go back too many years where a huge double digit loss was happening
— College education keeps increasing.
— Health insurance is really scary in the future. I’m planning $10,000/yr/person until medicare. You want to make sure you have a good ins. plan. Who knows how much this will increase. But $20,000/yr for 20 years is $400,000.
— If you ever do decide you want or need to re-enter the work force, it’s really hard to re-enter at the salary you were making before.
When I got to my early 50s I realized:
— I would be really bored.
— I still needed a purpose in life
— By working a few more years, mom and I could have this house and possibly a second home if we wanted.
— It was also a good feeling knowing that we could retire whenever we wanted.
Anyway, a few thoughts I wanted to share. I’d love to help you reach your financial goals if there is anything I can help with.
Have a good day,
Dad
What a nice note, huh!? Needless to say, he hit on basically all the major concerns any early retiree should think about. At the time of reading this, I didn’t realize that he ever considered early retirement. I always knew that him and Mom did a good job managing their money and were financial responsible, but they did have to raise four boys and paid for half of our college costs (in-state public school tuition).
I thought about how best to respond and decided to put some thoughts on paper. I shot him the below email, and then followed up with a phone call. Below is my unedited response to my Dad.
My Email Response:
Hey Dad, thanks for the email. I didn’t realize that you were thinking of retiring early as well. What you mentioned in your email are definitely some of the key things I’ve been thinking of too. Of course it is hard to pin down hard numbers on some of those things until the day comes. But here is the basic synopsis that I’ve come up with. Let me know if this makes sense and when it would work to discuss.
I hear you on the 7%. I’ve always used 8% as an estimate when projecting my future investment balance based on the long-term historical returns of the S&P 500. Once in retirement I will likely continue to stay 100% invested in stocks, but focus on the “safe withdrawal rate” (“SWR”). There are some good online simulators for determining “FIRE” (financial independence, retire early). Have you ever checked out firecalc.com or cfiresim.com?
I would estimate my required investment balance at retirement based on a 3.0-3.5% SWR and knowing what my core expenses are with some cushion. For example, core expenses of $60K including mtg payment at 3% SWR would require $2 million in investment assets. Realistically, and conservatively, we’d probably be targeting closer to $3 million. The biggest wildcard are long-term healthcare costs in case of illness or disability, which as you mentioned would either require good health/disability/long-term care insurance and/or more cushion in our investments.
Jr’s college fund will be basically fully funded by his 3rd b’day at ~$70K. Invested in a balanced and diversified stock index portfolio, this should cover the majority, if not all, of college costs by 18 estimated at ~$250K. We’ll have the same plan to fully fund baby 2’s 529 by age 3 as well. These funds of course are considered separate from the investment assets needed for the SWR above.
Without an employer or gov’t subsidy, I’d maybe be even more conservative than $10K /yr /person. We’ll see how it evolves in the coming years with Trump though. Lots TBD in retirement including if gov’t subsidies will be means tested or not or simply based on income…and then what will our income be in retirement, etc, etc. With unknowns like these to evolve likely well into retirement, we’ll try to play it safe rather than be sorry later.
Heard you loud and clear on re-entering the workforce at prior wages. But if we needed to build back some cushion, we could do this reasonably at lower wages and even consider temporary side gigs. However, we’d have no intention of doing this. We’d rather work an extra year at the higher wages than risk having to re-enter at lower wages for a couple years.
What to do in retirement…that’s the million dollar question, huh!? I’ve always heard it is important to retire “to” something and not to retire “from” something. So I understand where you are coming from. I would be ideally retiring to: delving into the kid’s activities and development (not much unlike what you did with us); hobbies that have gone by the wayside over years like hunting and others; travel with the fam; and finding ways to volunteer for various good causes TBD.
So at this point in time, that’s the thought process. We’ll shoot for $3 million in investment assets not including 529s which will be fully funded in coming years. And it gets squishy when thinking about healthcare and disability insurance, but I have time to figure that out and adjust the plan of course.
Like I said, let me know when it works to chat. I just thought it would be easiest to lay out some of my thoughts before doing so. Thanks again for the email.
JW
What do you think? Decent response? I wanted that to lay some ground work for a good conversation with him. And indeed it was good. We talked for quite a while.
Our Follow Up Conversation
My dad was very excited for us and our plan to retire early. He agreed with a lot of the assumptions including a SWR of 3.0-3.5% and having a baseline of $3 million, recognizing it is a lot of money but can be easy to attain when the snowball starts rolling (the FIRE-Starter that we are still in pursuit of!).
Conversation then focused on life purpose, employment in retirement if extra cash is needed, and healthcare; all three of which are somewhat related to each other. Employment, even part-time, can help fulfill my purpose in life while also help provide for some or all of the cost of healthcare and/or allow me to take advantage of employer sponsored insurance.
When your life is devoted to work it can be hard to think of what will fill that void, and the conversation kept reverting back to part time work. He mentioned how ideal it would be to be paid the same and just work less hours, and how, unfortunately, my career in banking really isn’t feasible for that. So we discussed a number of alternatives.
He mentioned there are plenty of ways to be creative with employment and there are unique opportunities out there if I look hard enough. One example he gave was that an old colleague of his who retired and began delivering RVs across the country. He also mentioned part time consulting, etc, given my banking and finance background.
Then he asked what I will do between 8-3 when the kids are in school? He thought that is when part time employment would be ideal. But what if I don’t need the money, will I be that bored that I revert back to employment? Is retiring to family not enough?
I’ll have 10 years with the kids still in the house which will be great. When they are gone, then what? Well at some point grandkids. I’ve always heard how great it is to have grandkids! :) I’m sure they’ll keep us busy and provide for a great time as well.
So kids will keep me busy and, if I’m so lucky, grandkids as well. What will I do when I get bored?
- With the kids gone, Lucy and I will have more flexibility to travel and we’ll no doubt take advantage.
- I enjoy reading books, magazines, blogs, etc about a wide-array of topics including history, finance, religion, nature & the outdoors, etc. Does that not provide plenty of rabbit holes to chase down?
- I’ll be able to focus more on my health and fitness. It’ll be a lot easier for me to fit in a good balanced exercise program and improve my diet. I enjoy cooking at home with Lucy. We can focus more on new, unique and healthy foods for us and the family.
- What about other hobbies or projects? Many hobbies have been pushed to the side as I entered the workforce. This would include hunting, playing various sports (would I be too young to enter an old man basketball or soccer club?), and following college and professional sports more closely.
- There are endless great causes I could volunteer my time to as well, including perhaps at the school system in some capacity that my kids will then be attending.
We also talked about his scenario with my mom. They were basically at FI 8 years ago. He wasn’t ready to leave work though because he needed that as his purpose in life. Also, they wanted their dream home on a lake which they had recently moved to, but were still in the process of paying off.
The additional years of employment would allow them to pay that loan off and have more cushion. He also acknowledged how much greater work was knowing that he could quit at any point if he wanted or needed to (albeit then move to a less expensive home). So the “one more year” syndrome was more like eight years for them in order to have the nice lake home for the rest of their lives.
An interesting takeaway from this was when I asked him how he’d fulfill his purpose in life once he does retire from his work here shortly. He said that he didn’t think he would have the need for purpose anymore and that days spent on the lake would be what he will fill his time with.
I think that begs the question for all of us – when will we no longer need that purpose in life filled by work? At what point can we say enough is enough. I’m done climbing that corporate ladder and I’m completely satisfied with a more leisurely lifestyle?
It’s a tough question, one that many retirees struggle with (especially early retirees). I may think I will be ready, but when I’m in the moment I may not be. We all need to try to determine when enough is enough in our lives.
I could probably continue on, but there you have it. My conversation with my Dad on retiring early! And the outcome: much congratulations and excitement, as well as some things to continue to ponder.
What are your thoughts? Do you agree or disagree with anything? J. Money thought the parts about not needing purpose anymore was pretty surprising to learn from my dad. Share your own thoughts below and I’ll happily answer any questions!
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JW is a corporate banker, a small business owner, a personal finance blogger, and a family man with a wife, a kid and another on the way. He amassed his first million by age 30 and is on the path to reach financial independence and retire early in his mid-30s. JW blogs at The Green Swan to help others achieve their financial objectives and believes anyone can be on the path to retire early with the right habits and mindset. You can also find JW on Twitter (@TheGreenSwan1) and on Facebook too.
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I like that statement: “When your life is devoted to work it can be hard to fill that void.” I’m sure we’ve all had this same conversation many times. We’re conditioned to think work is needed to give our lives purpose.
The responses about quality time with family and personal time to improve your knowledge and health are exactly why I’m doing this as well.
Goals may change, and we may decide to continue working. But, hey! It’s not like it would be ‘bad’ that we worked towards this goal and changed course.
Right on, CoF, work is not the purpose of life.
Well said about changing course too. Reaching financial independence early will simply offer freedom and flexibility to pursue our interests which can and will change from time to time.
Thanks for the comment!
What a gift to be able to have a conversation like that with your dad! I lost my dad when I was 19, and have similar FIRE goals to be able to spend as much time with my sons as possible.
I’m curious if you and your dad ever came to a consensus on the 7% or 8% expected growth? I used to use 8%, but then switched to 7% a couple years ago just to be safe.
Sorry to hear that! I think that is very admirable you are aspiring to FIRE in order to spend time with family. Thanks for sharing that!
We never did get into that much. Your definitely safe to use 7%, but I still use 8% as my personal goal and expectation for long-term S&P 500 performance. The 10-year annualized returns have been around 7-8% for each of the last 5 years, but the 5-year annualized returns have been 12.5%+ for each of the last 4 years.
That sucks to lose your dad that early :( That’s my biggest fear in life – leaving my kids without a father, esp as they’re so young (2 and 4). Just another reminder for me to pay attention to them as much as I can!
That’s so cool that you can talk openly with your dad about FIRE plans. My parents know that we save a lot and they’re practical, financially-savvy people, but it feels like a slap in the face to talk about FIRE with them since they aren’t very close to retiring themselves.
On the other hand, Mr. Chedda’s dad sounds a lot like yours. He sends us articles about rising costs in the future or why the 4% withdrawal rate isn’t sound, and he seems a little skeptical, but he understands the idea and he’s on our side if we can make it work!
Thanks for sharing your story!
Yeah I hear you, Ellie. They can definitely be sensitive conversations. That was part of my hesitation with my Dad too since I know they are still working. You’re father-in-law sounds pretty awesome though, being so instrumental and constructive!
Thanks for the comment!
Blogs this week have me thinking more about purpose or bigger goals in the future. I’ve been a little too focused on the present and “getting through” to worry about the “why” of later. Since I won’t be retiring in my 30’s – (I’ll be 50 in a few weeks), I am looking forward to taking time after working to figure out my “why”. When you’ve been in the same profession for almost 30 years – there is a big world out there to consider! Time to explore and figure the next part of life out ;)
I have some time yet before I pull the trigger on retirement, but I continue to give thought as to what I’ll do in that phase of my life. It will be fun having more time to pursue all my interests!
Thanks for sharing this!!
“When will we no longer need that purpose in life filled by work?” – No doubt I will be thinking about this question all day. I don’t think we ever lose that yearning for purpose, but I do think that it evolves towards more organic causes. Getting paid for work is part of our purpose now because it is an exchange. I work hard for you, you reward me with money. Once the need for money is gone the need for purpose still exists – it is just filled by other things. I think that is why Grandparents LOVE grandkids so much…teaching the new generation and watching them grow fills that void as does volunteering. For some it is perfecting their hobbies and crafts. For others it is seeing firsthand places they only once dreamed of. Regardless of what you do when you leave the workplace, having something to do is what will keep you from getting bored as many fear will happen. I don’t know what I will do but I sure can’t wait to find out!! :)
Thanks for sharing your perspective, Miss Mazuma! I like the way you look at your purpose being an evolution. There is always something to do and things to explore. I’m excited to find out as well!
I love that your dad reached out to get the conversation started. Great stuff. Sounds like it’s opened meaningful conversations for the future.
I think with older generations, boomers and before, they seems more tied, their identity is their work, so when leaving it they are left with the big void. It’s less common to stay with one company and do one thing over a career, so we are naturally diversifying ourselves and interests these days. Which I believe makes it an easier transition into retirement.
Oops, replied to you Brian but as a comment below…
Agreed – My dad thinks it’s crazy how often people change jobs, and even more so the whole “early retirement” movement haha… I try to explain it to him but he’s def. skeptical :)
I’m suprised about life not needing purpose, but I wonder if that’s down to the type of person. Not everyone is driven by purpose. Nothing wrong with that just a thought. For me I’ll always have a purpose, it just may be something like see as much of the world as possible, or ensure my grand kids know me.
Yeah totally agree, FullTimeFinance. I think what my Dad was really meaning there was that he’d be ready to let work go, and transition that purpose in life to leisure on the lake, they do plan on traveling more, etc. I think 8 years ago though he still had that drive and wasn’t ready to let work go.
Yes, we’ve always had open dialogue and my Dad has been an open book on his retirement plans whenever I’ve asked him questions. They plan on taking the immediate family on a vacation to Hawaii next year to celebrate their retirement. He was in town visiting recently and he knew I was in touch with travel hacking, etc, and asked my advice on how to get started in prep for the trip. So we’ve always had good back and forth on finance related topics and it is fun to talk about with him.
Good points. I noticed in our conversations some generational factors and differences in perspective. That’s part of what makes us who we are. I’m certainly excited for FIRE though and think I’ll be able to transition alright.
Thanks for the comment, Brian!
JW,
Wow, what an amazing conversation with your father. It’s awesome to see how open you both are about your FIRE plans. I highly doubt I could have that kind of conversation with my parents. They are very traditional in their outlook and I honestly don’t think they’ve ever thought about retiring earlier than 65. I definitely don’t want to work the rest of my life, but I realize that I’m far off track compared to you and others. That said, you have to start somewhere! Your story is very encouraging. Thanks so much for sharing.
Take care,
Dave
Hi Dave! Thanks so much for the kind words! No two paths toward FIRE are the same. I realized FIRE was achievable just a few years ago and continue on my path today. We’ll get there eventually as will you with determination.
I know my wife isn’t as open with her parents about finances much either. I think it is healthy to have those conversations and hope to foster that openness with my kids as well. All we can do is try.
Thanks for the comment!
JW, great to see you hangin’ with J$! LOVE the exchange with your Dad! I have a similar relationship with my Dad (except he knows about, and reads, my blog!), and it’s something I treasure.
The point about “purpose after work” is spot on. The $$ stuff is easy (math, and spreadsheets), but really determining post-FIRE purpose is hard. I think about it a lot, write about it a lot, and I still haven’t figured it out. I do know that getting this part right is one of the keys to Achieving A Great Retirement, and I’m glad to see you and your Dad talking about it.
That’s pretty neat, Fritz. And maybe someday I will be ready to share my blog with him as well!
Completely agree about the importance of figuring out that next step after retirement. Planning life is difficult (impossible…) and I certainly want to avoid regrets as much as possible.
Thanks for the comment!
This has to be one of your most thought provoking pieces. You did nail it by having a plan for around being around for the kids as they age up to college age.
The game changes in two phases, when the kids go off to college and after they graduate and begin supporting themselves. We used the college years to establish new goals during the early part of “empty nester” phase. Continuing to work in a fun, interesting job and high paying job was awesome until Jr. graduated and found a solid job. Retiring to family as you write is not an option as the kids now have their own lives and we are now play a part. We used to play the entire part. Today, the shine of having work to fill the gaps of goals and purpose is developing a patina when a nitwit of a boss comes in and sucks the fun out of a really great job and team. Finding the spark and passion for somthing new to focus results in exploring many deadends. All I can say is that develop a handful of hobbies when you are working so you can rely on at least four (cost effective) hobbies during full retirement. Otherwise, you’ll be going back to work for less money and spending the rest of your day keeping on eye on your cash burn rate.
For now, I started a blog, thanks to you, to pay it forward and coach the next gen of college grads so they can shave 10 years off working for the man. It’s an interesting niche that is sprinkled with the FI concepts.
Thanks Franklin! I appreciate the kind words and look forward to checking out your blog!
And likewise, what a good thought provoking comment. I like the idea of developing a number of hobbies; like throwing a handful of darts and hoping a few stick. What I’m looking forward to is ideally developing some hobbies with my kids to build that relationship and something we can always do together.
Thanks for the great comment!
Congrats on the new blog man! Welcome to the community :)
What an incredible father-son interaction! I’m a bit jealous :) My father and I will occasionally discuss retirement, finances and investments but he seems hesitant to drink from my fount of knowledge (which I gladly share with everyone around me, and some people even pay me $125/hr to take sips of this knowledge).
My dad sounds a lot like Green Swan’s father. He’s 64 and still working for the stated reason of afraid of health insurance costs in spite of my explanation that ACA will be there till he hits medicare at the end of the year OR they could simply pay out of pocket for crazy expensive coverage for <1 year. Assets are way more than a million though I've never seen a copy of their balance sheet. Pension for mom and 2 sets of generous SS coming online in the next several years.
As far as Green Swan's financial plans for ER, sounds very doable. I think there's too much of a rush to hit a low portfolio total and FIRE at 30, 35, or 40 (as if life were a race) so Green swan's take is nice – work at a high salary to pad the portfolio a bit and then step off the hamster wheel. I'm not sure how I would personally spend 3-4% of a $3 million portfolio but I would enjoy the efforts to spend it all :)
Thanks so much, Justin. I agree with you, it doesn’t sound like much to worry for your father to retire. I chalk it up to life experiences and generational differences, but who knows. All we can do is set a good example of the FIRE-lifestyle and make others aware it is an option.
Thanks for the great comment!
Thanks for sharing this. I think your response to your dad’s email was fantastic. Was he surprised how much thought and planning you had already put into it? The one thing I disagree with is no longer needing a purpose in retirement. If you’ve spent the majority of your life feeling like work gave you a purpose, and now that’s gone, I think you’re going to find retirement very lonely. It doesn’t have to be some grand purpose either. For me, I’m competitive and enjoy sports. It gives me a sense of purpose to continue to improve at golf and racquetball and compete in leagues. I’d love to take up woodworking, but just don’t have time for it now. I’d also like to learn a new language for when we travel overseas. I envision retirement for me being just as busy as today is and having just as much purpose. Although those purposes will shift some.
I love your ideas for purpose in life in retirement. That’s all right up my ally too. I think I could have worded it better in the post, but I don’t think my Dad was insinuating he’d have no purpose once he retired, but that he would be ready to let work go and no longer serve as that purpose. He will definitely still have purpose, albeit more leisurely around the lake, travel, etc. Sorry that point was a bit confusing.
Ha, back to your first question, not sure he was surprised necessarily, but I may have caught him off-guard a bit with the detail. I’m sure he was impressed with how thorough the response was, but I’ve always tended to be research-oriented.
I think it’s great that you can talk to your dad about FIRE. My dad don’t agree with the idea at all. He is 72 and he is still hustling.
What to do all day? I’m sure you will find plenty to do when you’re not working full time anymore. No early retiree has that problem. :)
To each there own I guess!
I appreciate your confidence that I’ll stay busy. I think I’ll be able to as well, but there is part of me that worries a bit…after all it is going to be a loooooong retirement!
Thanks for the comment, Joe!
Great stuff. Regarding the responsive e-mail: Way to hit all the central points in a nice, non-confrontational, understandable way!
My brother and I have each had similar interactions with our parents, and it took a long time for my parents to recognize this was a possible thing. Even longer to understand that perhaps people don’t require full-time work to feel “busy” or “fulfilled.”
Now, I expect to have a similar conversation at some point with the in-laws, who are aware that me and my wife save a ton of our income with the intention of early retirement, but don’t know much of the specifics. They aren’t aware that we’ve considered these common hurdles and are planning around them. Maybe I’ll copy and paste your response, Green Swan!
Haha sounds like we are in the same boat, even regarding the point on the in-laws!
That’s pretty neat your brother is on the same page as you as well. I wish mine were, but I don’t think that’s necessarily the case. My older brother has way more wealth than I do and his response to me has always been that he’d do the exact thing in retirement that he’s doing now for his employer (which may actually be the truth). And I’m not sure where my younger siblings really sit on the matter.
My in-laws would probably be caught off-guard. They know we are frugal and cost-conscious folks, but I don’t think they appreciate how much we make and have been able to grow our nest egg. I think I’ll leave that conversation to my wife… :)
I really enjoyed reading this post. I like this kind of open discussion between father and son. I don’t feel the generation gap between you guys; it’s a great conversation on an important topic. Looks like your father also has a very solid understanding on finances.
I was nervous for the conversation but it went great and am really glad to have crossed that bridge. And yes, he does know his finances. He’s been on top of his personal finances forever. I remember growing up and on the weekends he’d occasionally balance his checkbook in the living room. Funny memory, huh?!
Thanks for the comment, Roadrunner!
Yeah – seemed like two friends talking if I didn’t know y’all were father and son – was really cool to read :)
Hmm, is the Green Swan=J.Money
Ha nope, I’m my own man! But I do like the name similarity…J$ and JW!
Shhh… play along!
Aww, this is nice. It’s good that your dad is interested in your early retirement plans, JW. My parents think I’m being idealistic and downright loony about early retirement, so I just don’t bring it up with them any more. Boo. But it sounds like your dad just wants to make sure you’re taken care of, so that’s sweet. :)
Good grief, if I were retired I think I would be *less* bored with life. I could actually do things I want to do instead of shackling myself to a job and my financial responsibilities. I’d have to create my own structure, of course, but isn’t that what freedom really is?
Yes, I think you’re right, my Dad is showing he cares and it was nice he sent the initial email to indicate he’s wanting to be part of the thought process. That’s a shame your parents are boo hooing…in time they’ll come around I’m sure.
Gosh, that’s a great way to look at it Mrs. Picky Pincher! It makes sense, why wouldn’t you be less bored doing everything you want to and being active, happy and healthy. That’ll be the day!
Thanks for the comment!
You dad cut right to the heart of early retirement concerns in his email to you. The man knows his stuff!
I think purpose can come from many things. And with the internet, you can find plenty of purpose sitting at home on your couch, working on your laptop. Our parent’s generation did not have this advantage and so I suppose it may have been a tad harder to envision working on meaningful things once you left your day job. It also depends on the person and the job. My father is a doctor and he loves his job. I think he will work until the day that he physically or mentally can’t. I can’t imagine him retired to a life of leisure for as long as he is able to be a doctor.
Great point, Mrs. BITA! It is different this day and age with how connected things are and how available information is. And I think my brother is in a similar boat as your Dad. He enjoys his work and says he’d do the same thing in retirement that he does today and I don’t necessarily disagree with him. To each their own and I am optimistic I’ll get the purpose angle figured out and be just fine!
Thanks for the comment!
I want to be financially free in my 40s, i dont like using the word retirement because it seems to imply that you will nothing more to do and get “bored” as you put it.
For me its all about being able to do whatever I want, i dont think i will ever get bored or have something not going on. Building stuff, spending time with family, travelling, and volunteering I imagine will take up all my time.
Youre lucky you have a father to talk about stuff like that.
Yeah retirement does have that connotation sometimes. Financially free sounds much more empowering!
I tend to agree with you Alexander, and a lot of our post-financial freedom to-do list overlaps! Sounds like a good time to me.
Thanks for the nice comment!
Your dad really provided some good insight there. I love hearing advice from not only my dad but from other elderly folks who have come before us. I often would strike up conversation with a retired gentleman down the street. He was happy to share stories and I’m always looking to learn!
That’s awesome! I’m the same way, I love seeking advice from many other people when making big decisions. It can never hurt getting a new perspective. You don’t have to agree with it or take their advice, but I’ve always found it beneficial hearing more feedback.
Yeah!! Older people have sooooooooooooo much more knowledge than we do!! But people rarely seem to go out of their way to learn from them! And you can tell it makes them so happy when you do as they’re always so eager to share :)
I climbed down the corporate ladder a few years ago, at 39. I don’t think my family understands why, either. I do work part time, and yes, it is hard to get the same exact hourly pay in a professional field, when you only work part time, but there are a couple of reasons:
1. You are probably not going to be as high up the ladder if you work part time. This is actually my preference. No more managing employees, answering emails at night or bringing stress home with you.
2. Most salaried employees work far more than 40 hours a week. When I did the “life energy” calculation, per Your Money or Your Life, I realized that I was really only making about $20/hours for a six figure salary! I’d much rather make $20/hour and only work 20 hours a week. :) Although, most professionals can make more than that per hour. Tutoring is a great way to use skills and work very part time. I used to make $60/hour just to tutor middle school math.
Thanks so much for sharing all that, great info and perspective! You can’t overlook the hours on the job…that’s true. I should calculate my life energy sometime and how much gets sucked up by work…taking the computer on vacations, etc. There is no getting away from work I feel like. Climbing down the ladder will be great one day!
I can’t believe you can make that much tutoring! That would be very appealing to me. I like that kind of work and being instrumental in helping someone else succeed is a great feeling.
Thanks again for the great comment!
JW- I love that you truly address your dad’s concerns instead of getting defensive. I have been bracing myself for a difficult conversation with my parents (especially my dad) about wanting to take my business full time and move out of the software development work. My parents are all about hard work and are getting ready to retire in their mid-60s. They could have retired early if they wanted to, but the “you must work hard all the time to succeed” mindset won out.
I know that their concerns from me come from their love from me and from wanting me to have the best life possible. Definitely inspired by your conversation to approach it as a learning experience instead of an attack my beliefs about having a flexible lifestyle!
Thanks, and good luck with your early retirement :)
I definitely wanted to avoid being defensive and just hoped that he’d be supportive. I think that’s the best approach along with presenting it as a lifestyle choice like you mentioned. Hopefully it won’t take long for them to come around and see it from your perspective. I hope for the best for you and knowing they want what’s best for you I’m sure they’ll be supportive as well. Best of luck!
Thanks for the great comment, Lindsey!
What a great conversation to have with the folks. Your monetary goals are very similar to ours, as are your plans in early retirement.
Also, my parents retired to their lake home and are among a very small number of people that I told about my website (after a full year of keeping it a secret). They’re on board with our plans, but have some of the same concerns. Fortunately, part time work is very much an option in my field, and should help me make a smooth transition to full retirement.
Cheers!
-PoF
Definitely sounds like we’re in the same boat! What was your parents reaction to the site?!
That’s nice to have that option, plus locum tenens would be kind of neat for a while anyway. The closing thing I would have to that would be consulting, but it would be a little more difficult to get into.
Thanks for the comment, PoF!
Oh, I already miss my Dad. Wish he was there little longer.
I have a question. I am 28 and dont invest in 401 or Roth so far, but thinking to do so. My employer doesn’t contribute to 401k and as far as Roth is concerned, I ll reach the limit next year or so. So not sure how to proceed? Thinking of investing in vanguard index fund. Should I do through 401k or Roth or anything else. Your suggestion please.
Oh sorry to hear that, Pria!
Good question! Hard to give a fulsome answer but the tax advantages of a Roth and 401k are too good to miss out on. With no company match, I’d max the Roth first given there’s likely greater flexibility in investment options than a 401k which tends to restrict fund selection.
Pria, I LOVE Vanguard index funds and its where my retirement money is. Check out JL Collins’ stock series and you’ll learn a LOT about investment strategies – and it won’t bore you to death either :)
http://jlcollinsnh.com/stock-series/
I’ve been retired for a few years, and I’m still struggling with that purpose part. My blogging helps me have a bit of schedule and purpose, but my kids are grown (no grandkids on the horizon), I don’t have a lot of hobbies, and my health (and to some extent my budget) limits certain activities. I sure do enjoy watching baseball on TV in the middle of the afternoon though! Anyway, my point is that it is worth considering in advance what you’re retiring to and whether some form of working is in your future. I’ve even heard of people taking a few weeks vacation to try out their retirement plans just to make sure it’s what they really want. JW, I’m sure you’ll be planning your activities as well as your finances, and I’m glad you’re able to discuss them with your dad as well.
How nice being able to catch those day games! That’s a good reminder to keep plans flexible, even if that means returning to work in some form or fashion. Thanks for the support, Gary!
College is what has me mystified. To think that a decent in state undergraduate education may cost $100K+ by the time my son goes to college seems insane. With technology disrupting things all the time maybe the college landscape will be totally different than it is today. But I will continue to try to save in the 529 in case that big scholarship doesn’t come through!
Agreed! Like healthcare, education has seen significant increases in costs and you’d like to think they’d reach a breaking point soon. My gut says maybe for education but I’m doubtful regarding healthcare.
Thanks for the comment, Syed.
I feel like talking about money with family can go south quickly. This whole conversation seemed to go smoothly because both sides were open to each other’s ideas and JW had a clear financial plan laid out, as expected from an esteemed financial blogger like himself.
I was most surprised by the thoughts your dad had once he reached 50. The fact that his purpose and entertainment were tied up in work is something that I would dread happening to me.
I’m happy that the conversation went so well for you two. Thanks for sharing JW & J$!
I don’t disagree with your sentiment regarding my Dad, but to each their own and I certainly didn’t want to challenge his thought process directly. Like you said, the conversation went smoothly because we were both able to be open and supportive if each other’s decisions, hearing out each other’s perspectives, and at the end of the day making the best decision for ourselves. But I give my Mom and Dad credit for knowing what they wanted (the gorgeous lake house) and working towards it.
Thanks so much for the comment, Kraken Fireball!
Wow. Thank you for posting this. It’s not an easy topic to broach with anyone – family included – and the reactions you get can be so varied.
Your Dad’s comment about a ‘purpose in life’ is what stood out to me. Since retiring early, I feel like I’m coming a lot closer to finding my purpose in life – and it certainly wasn’t my job!!
I’ve been traveling around the world for the last 7 months, and coming across a lot more experiences than I ever did in my work. (I’ve written a bit about it here: http://www.beautifulbudgetlife.com/travel-longer-less/)
All the best of luck for your future! And thanks again for sharing!!!
Good for you Sarah! That’s awesome you’ve been able to do that and gain those experiences and perspectives, I’m jealous! One day hopefully…
I’ll look forward to checking out that post, thanks so much for sharing that!
So cool, Sarah – congrats!!
Thanks for sharing this exchange! Actually pulling the trigger on early retirement does open up tons of uncertainty!
You bet, Daniel. Glad you enjoyed the post!
Now that’s a conversation I wish I had with my kids some day! I’m also quite surprised with the “life purpose” part, as I’m pretty sure that there’s so much more you can do, learn and see while retired no matter what age you are!
Totally agree, I’d love and hope to have this relationship and conversation with my kids as well. A big responsibility, no doubt. With a 3 year-old and another on the way, I see their upbringing as primary importance and am focused on doing the best I can!
I agree that having a purpose in life is incredibly important, but it’s a little sad how many people fill that roll with a job that is actually pretty meaningless.
I’m lucky I have a long list of things I plan to do and create in retirement, so I’m very confident I will be very happy for a very long time. If you don’t know what you plan to do with yourself, there isn’t much point in retiring, and those are the people who get depressed and die right after they finally do retire (JW’s dad needs to be careful of this).
We all need to realize there is a lot more to life than a career, no matter how important that career may seem.
I agree 100%! It’s crazy how much we mix career with purpose :( and I’m even doing my dream job!
Right on, Fiscally Free. Too many people are like that and I completely understand the risk of finally hanging it up and then falling into depression not knowing what to do with one-self. What a shame!
With an inside look into my Dad’s life, I’m pretty certain he will be just fine. He’s got plenty to live for.
Thanks for the comment!
What an amazing exchange and conversation to have with your dad! I think it’s sweet to see his concern for you and even as an adult he wants to make sure you’ve thought things through and don’t prematurely retire and find yourself in a bind.
I recently disclosed to my dad that my husband and I plan to retire early. He seemed shocked and didn’t quite understand how we would manage, but we didn’t get to have a detailed conversation. However, it opened the door to future conversations and I couldn’t be more excited.
Anyway, I’m happy you were able to have this conversation with you dad and that he is supportive!
Haha yeah – i think anyone outside of the $$$ world here thinks this stuff is shocking :) Hopefully it does spark more in-depth conversations later for you guys!
That’s awesome! Mine followed in stages too, kind of mentioning the idea in passing and slowly making him aware of my intentions. Sounds like your “main” conversation will be happening eventually. He’ll have time to formulate his thoughts and you’ll both be well prepared for a constructive conversation. That’s awfully exciting. I’d love for you to share the details eventually! :)
Thanks for sharing, FYG!
My dad was given a retirement package before age 60, and hasn’t gone back. My mom got fed up with the administration and retired early as well. They have saved and invested wisely and were able to do so. My industry can be a bit of a roller coaster (I survived a round of layoffs in Nov), with companies seeming to always be buying and merging. I decided to target FI, so that I have a plan in place, in case of any of the above scenarios happens. My parents know I’m targeting working until about when they retired, or well, doing a fun job (teach yoga, work at a brewery or winery), should a layoff happen once I’m FI. I enjoy my current job a lot, just not the commute or the stress of the layoffs. My parents both enjoyed their jobs too.
My parents have joined committees and community groups, and traveled, started gardening more, and have more time to visit with my siblings and I, and their friends.
It’s great JW and his dad could have such an open conversation.
oooooor teaching yoga at a winery while drinking beer! :)
Sounds like a good plan, Jacq! That worked out well for your parents and great you’ll be in a good position to do something similar as well.
Thanks for sharing!
I love that you can be so open about this with your dad and that he is on board and giving you advice. My dad is about to be 73 and still working (but do farmers ever really retire unless forced to by health issues? He farms with his older brother who just turned 79!!) I dream of retiring early, but I don’t exactly have a job that brings in a ton of money to be able to do that but I am starting side hustles and hoping to retire at least 10 years earlier than the norm (somewhere in my fifties) if possible. I’ve never even gotten to the point where I’ve pondered the percentage of growth we might see in the future. I’m only 30 so I have a long way to go, but your conversation and the realistic way you are planning for retirement is inspiring! As my retirement account grows, I will definitely have to put time into learning more about projections and what number I truly need to be able to quit working.
Woahhhhhh your dad and uncle are legit hustlers!! You don’t hear about that field as often these days (or at least I don’t, but then again i’m in the land of politics and tech here in DC)
Hi Becky, thanks for the great comment!
I’m from the upper midwest myself (have lived in Charlotte now for 5 years though) and know plenty of farmers like your Dad and Uncle (some of my extended family actually!). Good for them!
Retiring in your fifties is quite impressive, a great goal to shoot for! Side hustles can be a great boost. Keep up the good work!
My mom is very open about her and her husband’s finances, but the more I look at them, the more I realize they’re probably going to have to work to 70. When I tried to ask about my dad’s finances, he just said “I’m going to have to work til I’m dead!” Yikes.
My husband and I are socking away money as much as we can and investing mostly in Vanguard index funds. We’re hoping to retire in about 5 years, when my husband will be in his mid-50’s and me in my late 40’s. And that would be before either of my parents would be able to retire! I’m having a tough time with that… In a way I want to help them, if I can, and if they’ll let me. But on the other hand, I don’t like my job or where I live, so I’d love to get out as soon as possible! We’ve got great jobs right now, and being so close to FI, don’t really want to change anything. How do you handle retiring before your parents?
Man, great great question… Maybe someone will stop by here and drop some insight because I have no idea! Other than making sure to spend more quality time with them and helping out wherever you can, whether financial-teaching or otherwise. Parents love hanging out with their kids (usually, haha…) so I feel like they’d get a huge win just having you around more :) And you know they’d be so proud of you too!!
You’re probably right… Where I live now, I only get to see them once a year or so. If I could spend more time with them, I’m sure they’d be happy about that! I still feel guilty though! At least they’ll turn 70 only a few years after we plan to retire. Then maybe we can have some fun together!
Great question. It is a little awkward isn’t it! I don’t think we’ll be in that situation. Well definitely not with my parents, by we may be pretty close with my wife’s parents. They aren’t quite ready to retire, they’ve been saving and investing but they’re not there yet. So that may be a tough conversation to broach, mentioning our planned retirement, etc.
I think they’ll have lots of questions, but ultimately at the end I’d expect them to be happy and excited for us too, like J$ said. One of the things I’m excited about in early retirement is spending more time with them. We only visit them a couple times a year because of how far away we live, and I’m sure they’ll love us being around more.
So while it may be a little awkward, it is hopefully a win / win for everyone and hopefully they see it that way.
Thanks for the great comment and question, Tracy!
What a great conversation with your father! A lake home sounds like a divine way to spend your days after fulfilling your work purposes.