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Can early retirement be too late?

Oct 3, 2018

C an early retirement be too late? Everyone in the FIRE community seems worried about the exact opposite: “Am I retiring too early?”. To be fair, this is a very important question, and a very difficult one to answer too, as it is effectively a wrapper for more detailed questions: will I have enough money? Will I be bored? Where will I move to? Who will I be without my job? Will the children cope? What happens if I change my mind? …and so on.

Changing is difficult. You know what you are leaving behind, but you don’t know what you’ll find in front of you. It’s only natural for people to search for answers before making the jump. And if they can’t find all the answers, then it’s probably too early to retire.

One more year

As usual, every question will spur more questions, and more time will be needed to answer them. It can become a never ending process. This is how, despite their best intentions, many people end up postponing retirement. There is even a name for it: the “One More Year” syndrome.

An extra year can be used to save some more money, prepare better, answer a few more questions. And as the unknown scares people more than the known, they are happy to endure another year of work, which is a devil they know, and don’t think too much of the happiness they renounce to, which is just postponed to next year. Not a big deal. Or is it?

What’s wrong with delaying retirement?

I recently had a chat with a friend. She’s in her 50s with grown up kids. I was telling her about our desire to retire early to spend more time with our kids and I was surprised when she told me she had done exactly that, several years earlier.

I smiled.

That was a mistake“, she added.

I frowned, my smile gone.

“I started working when I was 14. I got married in my 20s. We had 3 kids soon after, but I didn’t manage to spend too much time with them. I was working all the time.” The kids, she explained, spent the majority of their time with their grandmother.

“After several years thinking about it, I finally managed to summon all my courage and resigned. I was determined to spend time with the kids, to be present, to participate more in their lives.”

That was a bold choice. Where she lived, finding a job was difficult; leaving one, basically unheard of.

“So I left my job. I wanted to recuperate the time lost, I wanted to be a mother. But you know what? My kids didn’t need one anymore. The youngest was already 10 years old at the time. They all had their activities, their friends, their lives. I soon realised there was very little for me to do, beside cooking for them or driving them to their next activity. The years for being a mother had gone. My early retirement had been too late.

That conversation was a bit of an eye opener for me. My focus up to that point had been on the numbers, just like everybody else. How much do we have? What will be our safe withdrawal rate? When will we have enough? And, of course: if we retired now, would it be too early?

Numbers don’t have all the answers

I have a big retirement spreadsheet in Excel. A sort of a giant business case which includes everything we have: income, expenses, assets, cash flow, etc. Anything which is a ‘quantity’ (specifically, anything with a monetary value) is featured in there. But it doesn’t contain anything which is ‘quality’ related.

So when Excel tells me that I should work another year to reach a ‘safer’ number, it doesn’t tell me what I’m losing by doing that. I do get that working another year may be ‘boring’, but I rarely think about the more profound consequences – the things I would have to renounce to and may be gone forever.

What’s the value of not playing with my son when he’s 2? What’s the cost of not spending more time with my elderly parents? Of course I can play with my kids next year, but time changes things. They’ll be a year older. I will have missed the 2 years old period. Nothing can give me that time back. And as for my parents, well, the passing of time has even more important consequences.

Missed opportunities

We are convinced that money is all that matters, and that everything else can simply be postponed, but as my friend’s story shows, missed opportunities may be missed forever.

Of all sad words of tongue or pen, the saddest are these: “It might have been!”

– John Greenleaf Whittier –

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