I MAY NOT BE THE best source of retirement advice. After all, I’ve called myself semi-retired for a decade and yet, faced with a grim medical diagnosis, I continue to work far too hard. Moreover, even if I opt to fully retire—which is doubtful—cancer will likely ensure my retirement will be all too brief.
On the other hand, I do run a website devoted to retirement issues, and that means I spend a lot of time reading and thinking about the topic. Here are five notions that I’d encourage those approaching retirement to ponder.
No. 1: Enough. This is the biggest conundrum for those approaching retirement, and it has multiple dimensions. The obvious question: Do I have enough? This prompts folks to apply the four percent rule to their nest egg, check their proposed retirement withdrawal rate using Monte Carlo analysis, consider what’s the best age to claim Social Security and more.
But we also need to ask: Have I done enough? Do I feel like I’ve accomplished everything that I wanted with my career? For many of us, the answer is likely to be “no,” because very few of us ever feel truly satisfied. But that doesn’t mean we shouldn’t retire. Instead, we might look to work on that missing sense of accomplishment after we quit the workforce.
No. 2: Phased retirement. If folks can, I believe they should try to ease out of the workforce by working reduced hours. Among other things, this will give them a chance to test-drive their retirement.
We humans are not very good at figuring out what we want. I’ve heard folks say they’d like to spend their retirement writing, or volunteering, or teaching, or woodworking. My first question when I hear a prospective retiree’s wish list: Do you do these things now? If not, you may discover these things aren’t really for you. After all, if you truly have a burning desire to do something, why aren’t you doing it already?
As academic psychologists put it, we miswant—and it’s through trial and error that we get it right. We shouldn’t assume we know what we want from our retirement years. Instead, we should prepare for a period of experimentation. An example: I was sure I’d love teaching personal finance. I taught for two semesters as an adjunct professor at a small private college north of New York City. Love, it wasn’t.
No. 3: Working part-time. This is closely related to No. 2—and, in fact, may prove to be the same thing. For a successful retirement, experts say we need a bunch of things: Not just income, but also a sense of purpose, an identity, a structure to our days, and social, physical and intellectual stimulation. But guess what? These are all things that we get from something called a job.
By the end of our career, we may hate what we do for a living. But don’t ignore all the benefits—financial and otherwise—that come with working. Forget the FIRE movement—financial independence-retire early. I’ve been pushing an alternative that I call ICE, short for “I’ll continue earning.”
I think that folks should consider working part-time through their early retirement years, perhaps as part of their phased retirement. I know some retirees strenuously object to the idea of doing anything that looks like a job. But that doesn’t mean working part-time isn’t a good idea for others. The fact is, work offers many benefits, and not just financial.
No. 4: Prepare to be shocked. Regular HumbleDollar readers will have heard that retirement has three phases: the go-go, slow-go and no-go years. From what I’ve heard and observed, there’s a lot of truth to this, and it’s a reason we should plan on being active in those early retirement years, whether it’s traveling or ticking off other bucket list items.
But I’ve also heard and observed that we can look at retirement as having three other phases: honeymoon, shock and redefinition. After the initial exuberance of escaping the work world, many folks suffer a sense of letdown, and they need to figure out what they’re going to do with the rest of their retirement that feels meaningful and that gives them a reason to get out of bed in the morning.
No. 5: Your retirement may last many decades. Mine won’t—but there’s a good chance yours will. Our brains may tell us that life is nasty, brutish and short. The numbers tell us otherwise.
For a couple both age 65 and in reasonable health, there’s a 60% chance that one spouse will live to age 90. It’s possible that some people will spend close to half their adult life in retirement. Obviously, that has financial implications. But it also has implications for what folks should do with their time.
I remember hearing a science professor talk about how, when he was in his 60s, he had one last research project that he wanted to tackle, but he decided he might not live long enough to finish it. The professor chuckled as he told the story—because he was now in his early 90s.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.
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“Why aren’t I doing it now?”
The best outcome of my pursuit of FIRE (which I started to escape from poor employers in worthy jobs) was my answer to that question and I havent looked back.
It took about 6 yrs before that question really hit home.
I have had more impact, met more interesting bosses, colleagues and taken prolonged time off with my young kids to teach / adventure with them in the 8 years since that question. And I never intend to stop adding value to society. Getting renumerated for it is now optional, but preferable.
“After all, if you truly have a burning desire to do something, why aren’t you doing it already?”
I work 9 hour days, on call weekends every 5th week. That means every 5th week is a 12 day week with no breaks, which takes at least one weekend to recover from.
Desire is nothing to do with it, it’s about time and energy.
As a younger man before kids I did a lot of volunteer work.
I really hope to manage a bit of useful volunteer work after retirement when I’ll have an extra 9 hours a day to do it..
You include under #2 phased retirement a link to a page in your money guide, “We Miswant”.
https://humbledollar.com/money-guide/your-goals/
This begins with “… four key goals—retirement, college for the kids, owning a home and protecting our family.”
You are describing financial goals but these are functional and definitional as well.
Occasionally since leaving paid employment I’ve struggled with recognizing purpose in my day-to-day life. This one sentence reminds me that I retired early to provide for my kids and salvage our future after my spouse’s death. And nowadays, making sure all four of these goals are on target and in good order still consumes the bulk of my waking hours, albeit leaving me more time these days to explore new worlds of my own.
Thank you for the succinct articulation of the working class/middle class family’s goals. Any individual’s purpose may differ from what you’ve listed, yet most people’s financial aspirations are covered in these few words.
Milton Friedman said (and I paraphrase) there’s a surprising economic value in parents striving to improve the lives of their children at the expense of their personal satisfaction, a kind of altruism that does not exist elsewhere.
I think there is a lot of nuance needed that reflects everyone is an individual. I’d be very wary of a blanket ICE movement for those that have “enough” because there is a risk that ends up serving others at the expense of the putative retirees.
Some people lose the passion for their jobs or find that over time the lows exceed the highs regardless of the steady pay. Some are defined by their jobs or perhaps are workaholic to the extent that there is a real issue of “grief” and loss of statuswhen departing. Their likely attitude to retirement may be very different.
I’m trying to get to a place where I’m open to doing different work compatible with my lifestyle e. g. I’ve some idea of hobbies I want to pursue and if I can monetise some elements then so much the better.
But defining some thing’s worth in purely financial terms seems like a bit of a failure of what the 3rd act should be about.
In re: No. 1, I just bought Mike Piper’s book More than Enough: A Brief Guide to the Questions That Arise After Realizing You Have More Than You Need.
I’m looking forward to reading it. If I have a review or insights I’ll post about it.
Here’s a brief recap of Mike’s book that I wrote last year:
https://humbledollar.com/2023/03/more-than-enough/
Thank you – another great article with many insightful comments. I share a counterpoint on one snippet: “Do I feel like I’ve accomplished everything that I wanted with my career? For many of us, the answer is likely to be “no,” because very few of us ever feel truly satisfied.”
Many Americans have jobs, not “careers”. They do the same tasks every day for decades. Another 8 hours of pushing a mop, installing drywall, unclogging toilets, answering phones, ringing orders, helping patients eat, dress or toilet.
Same thing. Every day. For 30-40 years.
“Accomplishments” or feeling truly “satisfied” may be a pretty foreign concept.They just want OUT.
Now I do realize they’re probably not HD’s main target audience, but many likely need retirement advice too.
If they stumble across most retirement articles I see out there, I bet it’s a bit tougher for them to relate to the content.
Jonathan, as always, very thoughtful advice. Thank you for continuing to share.
i will add a few thoughts about the FIRE movement which is quickly dismissed by many. I retired at age 56.5 after achieving financial independence. I consider that an early retirement even though I know it pales in comparison to many of the stories in the media of the few folk who retire in their 30’s and 40’s. I am not sure if this makes me officially a member of the movement but I feel a part it.
My advice to others – do not so casually dismiss the joy of early retirement. What comes after reaching financial independence is YOUR choice. There can be great joy in part work, pivoting to a passion project or actual retirement from work. Personally, I have found the freedom away from any work exhilarating. I would not easily trade this freedom as I enjoy my go go years. Do not quickly dismiss the joy of time freedom!
Thanks again for all you do.
Entirely agree. As I’ve written here before, I retired at 53 so I could travel. When I was grounded by rheumatoid arthritis and then by Covid, I was profoundly thankful for the fifteen years of extensive travel I had enjoyed. I did work part-time, when I was home, for the first three years or so, but then realized I was ready to quit completely. Organizing and writing about my trips kept me busy when I was home.
Great advice on continuing to do something. When I quit my job, I did volunteer driving for my county Social Services – a surprising (to me) number of elderly live alone and need assistance getting to doctor appointments, dialysis, etc. I also have done Habitat for Humanity International builds. My wife is a techy, and through Senior center, helps with computer, phone, TV, iPad questions. Not much remuneration, but we are fortunate to “have enough”.
At 58 I switched ministry sponsors to one which has allowed me a “long taper” rather than a sudden stop. At first, the taper was hard to see, but 10 years later it’s oh so real. I am grateful I could make that adjustment, although I continue to miss endeavors and people I’ve largely left behind.
I jokingly tell people that before I stopped working 2 months ago, I was working part time for a few years, but my boss didn’t know.
In sales, like retirement, you have a Number (quota) to meet or exceed every year. Hitting that number is all that matters if selling is all you want to do. If you have higher aspirations, then you also need to show you can manage a team too.
I managed a team for many years and didn’t like it, so I decided to move to a sales position that had me managing only 1 person: he could be a real jerk, but he could sell, so I put up with him. That guy was me, by the way.
Good article! I am 10 years into retirement and am increasingly aware that the go-go phase is rapidly coming to an end. The pandemic ended many of our travel dreams and we instead spent this money on a new kitchen. Not exactly the tradeoff I would have wanted, but it was worth it in retrospect. What comes next is uncertain. Long range travel is less attractive, so we have spent more on travel within the US borders. The next phase is what worries me now. We have the means, but making a timely decision about how and where to downsize is complicated. Our parents wanted to “age in place,” but caring for aging parents in their homes proved to be both expensive and complicated. We’d like to simplify our lives in this next phase so as not to burden our son with we faced with our aging parents. A lot of other Boomers are facing the same dilemma.
Great article, Jonathan!
I was going to retire at 67, but in the spring of 2020, my company told us to work from home. This was a blessing because I no longer had the 2-hour daily commute, plus I could do 15-minute odd jobs around the house while waiting for a process to run or a meeting to start. Finally, I had my weekends free! I enjoyed being home with my husband and having a flexible work schedule. Three years later I was ready to retire. So, perhaps working from home is an option as part of your phased retirement?
I have the opposite problem – working in IT, a lot of companies including mine are enforcing back to the office. My local office 15min away is closed, so now the company wants me to start commuting 2 hours a day to the downtown office. Honestly it might force me into early retirement, I’m not prepared to do that.
Very thoughtful article, Jonathan. I spent several years of transitioning to full retirement, reducing hours, declining consulting engagements, etc. The source of my hesitation to becoming fully retired was, I think, the fact that my work life was based on completing tasks and projects, while retirement is more open-ended, more of a process. This requires a different perspective or attitude that is still evolving for me. It is gratifying to read all the different and thoughtful approaches that are shared on this forum.
Less than two months into retirement I am quickly gaining an appreciation of the notions outlined by Jonathan. In addition to part-time work I am using my new-found time to catch up on projects at home (including some clean up and streamlining of financial matters), explore opportunities for volunteer involvement and spend more at the gym/pool and reading. So far so good but I already miss some of the daily routine so I hope to add a bit more structure to my life by early next year.
I never thought about retirement while working. I prepared financially but didn’t think a lot about what I would do when retired. I have an ‘A’ personality and always worked. My job didn’t allow part time work. I got to test not working when I took time off after getting a knee replacement at age 64 and found that I loved not working. That was 9 years ago and I never looked back. Now I do whatever I want whenever I want. The mental adjustment was easy. Sometimes I wish I retired earlier
Two years into retirement, my ICE means “I Could Exit (the workforce) because I listened to your sage advice on saving and investing long ago. Could not be happier.
I listened to a speech about longevity and the speaker made the comment that the human life span might be increased to 120 years which means you could technically be married to the same person for 100 years. He didn’t mention retirement planning.
After my first corporate buyout my mindset changed. Not to FIRE or ICE, but CYA. I realized I could be fired at any point, and I designed my financial plan that way. The firing never happened but I was ready, which actually helped my retirement planning quite a bit.
A phased retirement might appeal to many people but a few of us were ready to go. I stay busy every day, just not in a remunerative way. It’s a very enjoyable way to live for me.
Health and changes to my job caused me to leave my 30 year occupation behind. For 2 years floundered in a new profession I was not suited for, earning less money than my spousal support obligation. In order to make the ends meet I fell back on 2 old skills, preparing taxes and truck driving. Eventually profits from taxes reached a critical mass which enabled me to hang up the truck keys.
The tax prep gig enabled me to earn enough during the busy season to comfortably get me through the rest of the year. This essentially was like semi-retirement, giving me about 15 years of practice at being totally retired, and I got pretty good at it.
I suppose my “before you quit” planning was a bit like a blind squirrel finding a nut.
I like how Jonathan has converted FIRE to ICE. In my case, I left a job at age 58 to launch a new venture. Have I retired? Nope, I resist that word. Instead, I’ve DEtired. Much preferred. And it allows me to join my unemployed – er, FUNemployed – 20-something kids for lunch. . .
With regards to enough, my father retired in 1984 at age 65. I had just graduated from college, the last of six, and my father had been a widower for 2.5 years. He had a paid for house and car and not much else at the time. His modest pension of about $750/month and social security became his enough and he was very content with what he had. Having grown up in the depression, and after 4 years in the Navy in WWII, I believe it didn’t take much to make him happy. He then proceeded to live 30 more years and had a ball in retirement. He golfed almost daily until his early 80s, traveled extensively, and maintained a solid network of friends until he outlived them all. So, I believe if you have “enough” in retirement, whatever that is, you’ve won the game and he certainly won the game he played.
I have a tweak on #1 (“Enough”): Have you had enough (of your day job/career)? As I wrote here when I was deciding on a retirement date, changes at my institution over the past couple of years have made the idea of continuing borderline unbearable. Indeed, I’m gritting my teeth to make it through the next 8 months and 4 days with integrity (giving my best effort, especially to my students) and without sinking into a mentally dark place.
Sometimes enough is enough. Or you can just be tired of it after so many years…
exactly where I am, except 14 months left.. not sure I’m going to make it.
but, that extra year of not needing to nibble away at retirement savings seems like it is necessary..
trapped in a cubicle for 42 years now, ready for something else by now.
Best wishes for a smooth exit and first year of retirement!
I do wish my start was as planned and predictable as yours, Dana. Kinda jealous of your situation, to be honest.
Exactly. There were several reasons behind my early retirement, but one was that I no longer enjoyed my job. I think retirement may have been easier for me than for some people because I never equated my identity with my job, plus I worked part time in a closely related field for the first couple of years.
Best wishes for the next few months.
Thank you!
I faced a very similar situation when I was in my early 60s. My institution was morphing into a totally different environment as key leadership positions were filled with a different group whose focus was also different and more importantly not the same as mine. I retired at 63. I’d had enough.
I’ve always worked to live, not lived to work. I never found a career that would allow me to do what I want, when I want, and with whom I want.
Morgan Housel’s philosophy aligns closely with mine. It’s all about time, making just enough money to provide the freedom to make choices.
Two comments.
1. What if we cannot phase down because no matter how hard we try to do less, we always say yes to every request for help that crosses our desk? We need to do less, but winding down, even if for sanity at work, seems impossible. Also, working with scientists, there are always exciting new questions.
2. What if we’re completely clueless about what we’d want to do instead of our job? I had dinner with an old friend in a very specialized job who is in a similar quandary, but he has the added problem that a major resource he’s relied on for 30 years may be closing. For me, i have to have a job for access to the technologies I specialize in. We had no answers by the end of the evening.
We’re both very fortunate to be young, healthy, and debt-free, but what’s next?
Learning to say “no” is an important life skill. I was quite good at it while working, but have realized, since moving to a retirement community, that I am somewhat out of practice. I have found more than enough to do here, and need to start saying “no” again.
At the moment, my thoughts are focused on these considerations. I like my job, and I like earning. But I’m pondering why I feel drawn toward retirement, and why work is a little less exciting than it once was. The common factor seems to be time–I’d like to allocate more for activities away from my job. I’m working on a move to part-time hours, and continue that phase until the time is right for the next step.
Edmund – I’m playing devil’s advocate here, but as a PT, I assume you can “just” scheduling appointments that equate to full time employment. But then, what happens to the overall PT practice? Do they need a new hire to take the appointments you no longer want or need? When I was working and moving toward retirement I didn’t consider part-time work for a single minute. I knew my employer would struggle to give me fewer assignments, and when customers called, I wasn’t going to recommend they call someone else. Like you, I liked my job and I liked earning $$, but in addition, as others have noted, I was ready to retire and glad to be done with working for the man.
Jeff, you should be more discriminating regarding who you advocate for! Yes, there’s a challenge. That’s why I’m “working” on it.
OK. I’ll be everyone’s advocate! 🙂
I think that’s a great strategy. Even though our time is limited, if you enjoy spending it working, why not continue to work some?
Jonathan, I always enjoy it when you discuss this topic which we are both passionate about. Looking through your list, I did a little self-assessment:
1) For the most part, I feel I’d done enough in my 38-year primary career to achieve closure. Still, my industry is in the midst of unprecedented change and opportunity. Within my industry, my particular niche happens to be in very high demand. I would have FOMO (fear of missing out) if I sat on the sidelines, even though I could.
2) I’m living the phased retirement life. Professionally, I’ve been able to work on projects quite different from those I tackled in my primary career. And big changes are about to happen for me.
3) Working less than half-time, I’ve had a very satisfying first year of retirement. Intellectually, socially and financially, the encore job has made a significant contribution to my general sense of well-being since pulling the plug on my primary career.
4) Last winter, work was slow, giving me just a taste of the shock phase. I’m building an alternate portfolio of activities, including volunteer work aligned with my life’s purpose, to minimize shock and ease into redefinition.
5) I’ve no idea how long my retirement will last, but I plan to continue to be intentional regarding how I use the time allotted to me during this final chapter.
great advice as always Jonathan but my question is about the 4% rule…….every advisor uses……..if your portfolio has a 9% return like mine and those who take out 4% that leaves 5% to increase my investments..I am lucky enough to have an income stream that allows me not to draw down from my investments and only use for large expenses like new roof or tree removal so I use it as my emergency fund
Good Luck with your health journey I to am battling Cancer and it is tough but I think we are both doing the best we can………enjoy life as much as we can
Keep in mind that the 4% rule is designed to ensure you can make it through a 30-year retirement in what historically has been a worst-case scenario for inflation and financial markets. Inflation is the reason that, in the early years, you should spend less than your portfolio’s annual gain. You need to reinvest a portion of your portfolio’s performance so you can increase future withdrawals along with inflation.
Jonathan, thanks for the comment about spending less than your portfolios annual gain in the early years of your retirement. That was helpful to me. Chris
thanks that was my thought
After selling the company that I owned with my twin brother I was more than ready to leave the workforce but I found the three year transition into retirement helpful in helping decide what more I could do to fill my time aside from riding my bike for countless hours. Photography was a hobby of mine when I was younger and I took this up again. Volunteering with watershed organizations is an important part of my retirement life and it fulfills many of my needs from interacting with others to time alone in nature, feeling I am giving back to Mother Nature and society, etc. If I grow tired of one thing then I find something to fill its space. I find my retirement is an evolving process, that it’s fluid and each day is never really the same which is a good thing.
All true and insightful Jonathan, thank you. I think there needs to be a 6th major consideration: Are you and your loved ones adequately and sustainably protected against health insurance expenses? As a now 71 year old, nearly a decade retired, I see around me constantly the effects on my neighbors and friends of inadequate medical insurance coverage. Prescription drugs, doctor exams, and major health events can be horribly expensive for those not adequately covered. And that coverage needs to be in place before retirement. Thanks Jonathan for continuing to share your wisdom and insights!
Great article, I love the question “Why aren’t you doing it already?”
As usual, a thoughtful and accurate article on an important topic. I can say after 15 months of retirement this advice is almost exactly as my “phase-out” from my job/ career has gone. Upon retiring, I accepted a role as a consultant at my former company working on financial systems projects with the IT team and the comptrollers who I knew and worked with for years before. It was a new role for me and kept me engaged with my former firm while I transitioned into retirement. It allowed me time to do more new things in retirement including regularly traveling with my wife and volunteering for various organizations important to me. This along with the income which “delayed” the need to start drawing my retirement assets and social security was a definite financial benefit as well.
The consulting role lasted for 13 months and I am no longer doing it so I am now fully retired. The past 2 months have felt great and I am enjoying the additional free time to pursue other interests. The 13 month runway was perfect for me. I’m thankful for the way it worked out.
Now I’m pursuing more health improvement Activities so that I might enjoy a longer and fruitful early phase of retirement. Thanks Jonathan!