Category Archives: Non-financial Aspects of retirement

My Retirement Spending Problem, How I Beat It

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Simply put, I had a retirement spending problem. I planned and saved for years so I could retire to the life I fantasized about. There were years of researching everything I could find about early retirement and personal finance, yet I still fought a retirement spending demon. It didn’t happen on day-one of retirement. Everything went exactly as planned. I ditched the rat race and celebrated sensibly for a few weeks while I settled in. But then my retirement spending troubles began. I had a big problem all right, I was psychologically attached to my retirement funds and it messed with my head.

We spend a huge chunk of our life saving for retirement and then, BAMO! We get hit with the reality that we have no idea how to mentally handle spending our hard-earned savings. I believe it was the hardest part of my retirement transition.

Retirement Spending Problem

Coming to Grips With Retirement Spending

The numbers were all there. I knew exactly what my lifestyle budget was and how much I would need to fund it. The portfolio was set up to make those funds available and yet I was miserable with concern, anxiety, and a lot of other emotions. All of which wasn’t in my very detailed early retirement plans.

What was in my retirement plan was using what was considered an acceptable safe withdrawal rate. That is always part of our retirement funding calculations. The fear of overspending in retirement and exhausting the portfolio before you leave the planet is well deserved. That’s why we de-risk our portfolios with diversified investments and make contingency plans for rotten economic scenarios.

As for my planned early retirement lifestyle, I had tossed aside any desires for extravagant spending decades earlier and embraced frugal living to get me to where I was. I had already created the perfect lifestyle. But even with everything planned for, I couldn’t shake the retirement spending nag. Going from retirement saver to retired spender was a mind warp!

I Reacted and Succumbed to the Spending Nag

I started to restrict everything I had planned on doing in my retirement that had a cost to it. My mind rationalized it as financially necessary and I didn’t think much more about it except for one problem, I still had memory of what I wanted in my retirement. It didn’t take long before I started to hate how this spending nag turned my retirement into a cheapskate lifestyle. I was always smart frugal, not cheap like this. What I was doing wasn’t anywhere close to the early retirement dream I worked so hard for.

I started to think about elderly relatives who lived through the great depression and how decades later they lived a miserly life even though they had a good amount of money stashed away. All of a sudden it all made sense to me. What I was experiencing was a different flavor of the same psychology. Only then was I able to self-assess my irrational retirement spending problem and turn it around.

Shifting The Way I Visualized My Retirement Spending

Let Go

Letting go of our title and work identity is a common subject talked about for retirement preparation. When I retired in late 2009 I don’t recall ever seeing anything about letting go of being a money saver. If I did I must have ignored it as a non-issue. Believe me, we do have to let go of being a saver. Even in months when my gains, dividends, and interest outpaced my withdrawals, I still could feel the spending nag of knowing those gains didn’t get reinvested like in the past.

Instead of letting this nag continue to rule me I decided to treat it the same way I did shedding my work identity. I recognized it as normal and part of my transition from worker bee to retired freedom seeker. I made a goal to stop letting this mental attachment to saving and growing my portfolio dictate my actions. Instead of letting it control me I now would control it. I made the mental decision to turn my unholy attachment to my saver mentality into something I needed to work through and let go of it.

Retirement Money’s Purpose

One of the things I had to remind myself about is that my portfolio was specifically created for one single purpose. It’s only purpose was to fund my retirement so let it. It wasn’t created to sit locked up and unused or worshipped like I was Gollum and his precious ring.   

Drop Emotion, Stick-To And Believe The Facts  

The numbers were sound and there was no logical need to restrict my planned retirement. They were double and triple checked using all kinds of scenarios to leave no logical doubt. There was no reason to have the retirement spending problem that I had. I simply recognized I needed to control my emotions and stick to the plan. Do that and everything would be fine.

Giving Time To Adjust

It took many years of smart frugal living and saving a big chunk of my income to get to where I was. It stands to reason that it would take time to adjust my mindset. I had years of conditioning my brain to successfully create a lifestyle I loved and pull off early retirement. No matter how much I planned what I wanted to do in my retirement and how I would fund it, it will take time to adjust my brain to this new way of living.

It Worked!!

It took a few months to fully relax into my retirement spending plan and I was cognizant of the nag for over a year as it occasionally surfaced. I look back now and I’m grateful that I took positive steps to recognize and counter the saver mentality that was over-controlling me. I know people who never escape it and live an unnecessarily restricted retirement.

Breaking free starts with having a smart budget that includes what we want to do in our retirement. A budget that then matches up to a sound withdrawal strategy. Then believing in the numbers, letting go of our saver’s mentality, and letting our retirement portfolio serve its purpose. Most of all, give ourselves time to settle into the new way of living and allow the numbers and planning to prove once and for all to our brain that everything is working exactly as it should.

Our spending discipline that gets us to early retirement won’t just disappear. If the worst should happen then we will logically do what’s financially necessary. In the meantime, purposely spend on the things that matter in retirement just as planned for.

Retiring In Style

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Many lives are lived in vain and these are the lives that tend to be followed by regret. When asked about what they wished they had done earlier in life, people in their deathbeds said they wished they hadn’t worked so hard and wished they had had the courage to live a life that felt truer to them.

Luckily, it is never too late to change our habits and still early to start living a more meaningful life. With the below information and a bit of determination, you could also build that courage to make sure every step you take from now will lead to the life you always dreamt of.

retiring in style
Retire in style and spend your life’s third act doing what you have always dreamt of

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Some Ideas For Retiring In Style

Plan the trip of your lifetime

Travelling expands the mind and makes you connect with the inner self you had buried a while ago. Whilst you might think that travelling is something people in their mid twenties to early forties do, it is never too late to dream of sailing seas or hiking trails. Here is Lonely Planet’s Older Traveller Forum to provide you with the inspiration you need!

Invest in your dreamed holiday home

A pad that allows you to be closer to the sea? A second home in Venice? Perhaps an apartment in the sun? If you never thought of looking into these but have always wanted to escape to a faraway destination and make this your second home, now is the time to do some research into it. If you don’t know where to start, Ally Invest Review will help you better inform your financial decisions so you can finally own your home in the sun.

Take an online course

You used to sit and doodle whilst the news at five o’clock were playing in the background. Your family mentioned you could have been a Picasso or a Mondrian but you never had the time to dust off those brushes and sketch. With the thousands of online painting courses now available, this could be the time for you to shine! The Virtual Art Academy offers an online painting course you could take, and like them, there are many more organizations who do so. Get exploring!

Write your story (and share it with the world)

Being a writer is not easy, but it has also never been easier. With thousands of online tutorials on how to write, you too could tell your story. With years of experience behind you, all you need is some time aside and a word processor through which to share your world views and life anecdotes.

Take dancing lessons

George Bernard Shaw famously wrote “we don’t stop playing because we grow old, we grow old because we stop playing”. How you spend your time in retirement is entirely up to you, but dancing might be the perfect option if you wish to introduce a new routine to your life. Even if this is done past your forties, there is still time to learn new steps, so go on, put on your dancing shoes. Who knows? You might even find your perfect dancing partner!

 

These are only a few ideas to think about. There are all kinds of ways to engage your creativity, your inner explorer, and commitment to personal growth. Retiring in style can also include strengthening relationships and giving back through volunteering.

Retirement should be a time of passion, purpose, and interests. Not one of retreat and withdrawal. Be courageous and a little daring  by striving to live a retirement lifestyle that has no chance of regret. Make retiring in style part of your retirement plan.

KNOW Your Retirement Budget Before Retiring By Living It First

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How accurate do you want your perceived retirement budget to be? Nobody wants to mess this up because it can result in blowing through the nest egg quicker than planned and your retirement ending badly. That’s why it’s a good idea to actually KNOW your retirement budget before retiring. At least knowing as close as possible. That is best done by living your retirement lifestyle before retiring. The best way of doing that is by living as much of it as you can.  

We all run our numbers through a trusted retirement calculator based on our perception of what we will reduce our spending on in retirement. We may also add a bit to the budget to support our retirement travel desires. But there can be a big difference between perception and reality once living it. Here are a few pointers to help you KNOW your retirement budget is reality based.

Proving Conventional Retirement Spending Wisdom Right or Wrong

Everyone believes they will spend much less in retirement. We tell ourselves that because the notion that we all need 80% of our working income in retirement is a tall order to fill. That and it is far from being true for a lot of people. But the only way to KNOW is by living it first while you are still collecting that paycheck. Chances are if you can’t do it when still in the grind then you probably won’t be able to live with that budget in retirement either.

People do a lot of things because they either really enjoy it or they can’t live without the convenience it provides. Living your retirement lifestyle and budget before retiring is as much a personal mentality check as it is a retirement budget reality check. Some habits are harder to give up than others. That being said, this all should happen long before ditching the rat race. Getting this right is about the rest of your life in retirement. One should give themselves years of practice to work through this as it may take a gradual approach by incremental spending reduction and lifestyle changes instead of going abruptly cold turkey on the day you happily skip away from the job.

 

KNOW Your Retirement Budget Before Retiring

Giving Frugal Living A Shot

Frugality may be the last thing on your mind, but like it or not, most retirees do embrace an element of frugal living to stretch their fixed income and savings. Retirement budgets usually assume cuts in all kinds of spending. Adopting your more frugal retirement lifestyle in advance will not only allow you to understand how you will live but get you closer to knowing your retirement budget and whether you can live with it. Doing so in pre-retirement will also free up more money for debt elimination and retirement savings.

Nobody wants to live a life feeling deprived. Finding your frugal thresholds helps set a sustainable retirement budget and lifestyle to base your plan on. The first step is tracking where your spending goes. Then trimming back things you won’t include in your retirement lifestyle. Why wait until retirement? If it isn’t going to be important to your happiness in retirement then shed that crap now. Otherwise you may make a bad retirement budget assumption that will end up straining your plan.

Obviously there is employment related costs that can’t be cut in pre-retirement. Commuting, work clothes, occasional lunches out, etc. But tracking what you are spending allows you to accurately subtract that out of your retirement budget projections. It also lets you see how much you could save by trimming workday lunches eating out or other little things. Like parking your car and instead going for mass transit or carpooling and maybe saving even more money now.

Keeping it real

Living more modestly before retiring will get you closer to understanding what is realistic in your retirement budget. Thinking you will have time in retirement to clean your own house or mow your lawn to save money in retirement after firing the maid or landscape contractor will only happen if you can be happy doing that stuff yourself. If your perceived retirement budget isn’t including luxuries you pay for now, then live like you can’t afford what you freely spend on while working. Trim it away before retiring.

Sometimes we use the excuse of having little time to justify our convenient luxury spending choices when it might actually be we hate doing that stuff ourselves. Find out before you retire so your retirement budget reflects the truth.

Give Your Non-Essential Living Expenses Careful Review

Unfortunately retirement can and will mess with your mind. We just don’t go from career to retired without some mental transition effort and time to happily get there. Besides unintentionally connecting our self-worth to what we did for money, we also attach it to other things that may have a high cost. Like the county club, sports, hobbies, fitness club, over-spoiling the grand-kids, etc. Saying you are going to cut back spending once retired in areas you have connected with in this manner may be far harder than you can imagine.   

Instead of just assuming you can cut things in retirement, trim it back now and find out for sure. This will allow you to try out your assumptions.

 

Give up the gym and try working-out at home or other forms of exercise. Use public golf courses, scale back expensive hobbies or sports. Match your lifestyle now to try out your perceived retirement levels.

So much of what we enjoy gets attached to our self-worth. It can also be a big part of our social life and what we are retiring to. Both of which will also need to be shifted and worked on. There is no better time than pre-retirement to test your assumptions.

Some Retirement Costs Require Having a Plan B

Some costs can increase far above the inflation rate we use in our budget planning. You can’t always just raise your retirement budget when something you planned for or you really need ends up escalating in costs beyond projections. It will require making some big adjustments in retirement spending and lifestyle. It is a good idea to establish a Plan B and when possible practicing it before retiring. Some areas that have risen far above the inflation rate in recent years and have a huge impact on a retirement budget are:

Health Care –

If you retire before being Medicare eligible and things continue like recent history then expect double-digit increases year after year.

Property Taxes –

As home values recovered since the real estate bubble caused recession, property taxes have drastically increased.

Home and Auto Insurance –

Insurance companies pass their losses due to natural disaster to the customers whether you have had a claim or not. Tornadoes, hail, biblical rainfall, wildfires, and hurricanes across parts of the country are happening more often.

What you can do

When living your retirement budget, pay attention to these increases and identify where you can cut back in other areas if they bust your retirement budget once retired. For example, find out if you really can handle skipping or trimming vacations. If traveling is a huge part of your pre-retirement life and will also be in retirement then cut way back or suspend travel for one season. Then bank the savings.

Park the car and use mass transit or bicycle every weekend or when off work for a while. Understand that you may not be physically able to that in older age. Could you live without a car? Would you consider moving to a more mass transit friendly location to save your retirement budget?

Are you assuming that you’ll keep your huge entertainment cable or satellite TV package in retirement? Cut the cord for a while and see if you can live without that if you had to.

Can you consider reentering the workforce? If so, do have a plan to stay employable by keeping and/or gaining skills? How about staying physically and mentally fit?

These kinds of things should be part of your Plan B if things go awry.

If you find that unappealing then you must ramp up your needed portfolio savings target to accommodate the possibility of having to raise your retirement budget for these kinds of uncontrollable cost increases. That may be a turnoff if you’re already struggling to save enough as it is. But it’s always a great idea to over save than under save for retirement to handle all kinds of budgetary surprises.

Last Words

Living your retirement lifestyle and  budget before retiring is about getting it as close to reality as possible. In both your financial numbers and the assumed retirement lifestyle you are planning for.

Planning Your Best Future Imaginable

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One of the most exciting things about getting older has to be planning for retirement. It’s no use saving up without any idea on how you want to spend those precious years of your life. You don’t want to shoot too low either. Why would you say you wanted to go on one vacation a year, if you’d like your whole retirement to be a vacation?

 

Here are some tips that will help you to begin planning your best future imaginable:

Picture Yourself Without Limitations

To get an idea of where you really want to be in the future, you need to picture it, without any of the limitations you may have now. For example, you might want to sail in your own private boat or cruise the country in a sports car. But you fail to even entertain that idea because you feel money will be an issue, or you just won’t be able to for whatever reason. The old saying, ‘where there’s a will, there’s a way’ really stands here. If you want something enough, you can have it. You can find numerous ways to achieve what you want, but you first have to believe that it is achievable. No ifs, no buts, no coconuts! Start dreaming wildly and putting together a picture of what your future will look like in an ideal world. No limitations. Go!

 

Come Up With Ideas

Now that you know what you really want your future to look like, come up with ideas. Sure, you might be used to a fancy lifestyle with a nice expensive car or house now, but if you could downgrade your car or downsize your house and cut back on spending to achieve your dream future, wouldn’t you rather do that? Know the numbers you’ll need to achieve what you really want. Do the calculations. Now, start working out how you can put more money away.

It’s a smart idea to figure out how you can continue making money once your retirement has taken place too. That way you don’t have to just rely on what you’ve earned and saved from your career. Do your research and be smart – the internet has a plethora of free information out there, as well as affordable courses you can take to help you earn money online, from anywhere in the world. For example, you could sell things on Amazon without having to lift a finger once you’re set up, and make a decent living out of it. Retirement is the perfect time to reinvent yourself and pursue any opportunities you are passionate about. All you have to do is be prepared to teach yourself something new. Anything is possible!

Do The Sensible Stuff

While you should dream big and come up with smart ideas to help you to earn more money, you need to make sure you do the sensible stuff too. Besides using a reasonable savings withdrawal rate and planning for possible long-term care in your old age, also look into life insurance for seniors over 70 if you have people who would struggle without you, should something happen. Would you want your spouse/children to be lumbered with things like funeral expenses as well as the sadness of losing you? Probably not! Planning for the future in the best way possible means taking care of those you love too. Don’t forget it.

Your future can be brighter than you think!

How to Use Your Money for Fun and Growth

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Life is to be lived deeply and passionately, not just dealt with and endured. Whatever money you make, and however you choose to arrange your personal finances, you should always create openings in your life for fun, and set aside a reasonable portion of your income for experiences that make you feel alive. 

Of course, there’s no reason why you shouldn’t kill two birds with one stone. Where you can  have those “fun” activities also serve your personal growth.

Whether you’re on the path to retirement or already retired, here are a few ideas for how to enjoy the best of both worlds.

Money for Fun and Growth

Using Some of  Your Money for Fun and Growth

Learn a skill you’ve always admired

At the core of our memories and recollections of our lives are stories. A great way to develop those stories and add new textures to our life-tales is to learn new skills and put ourselves in new situations.

Everyone has an idea of a skill they’ve always admired or been fascinated by in others. Why not take the plunge and sign yourself up for a class in one of those skill-sets? Whether it be learning how to play the guitar, or starting a course on rock-climbing.

Not only will you have a blast, make new memories, and meet more people. But you might even find new future-income avenues down the line, as an instructor or guide.

Travel

Travel is one of the most uplifting and intriguing experiences a human being can undergo. It’s fun, eye-opening, and if done right, can be an immense source of inspiration.

By travelling to those natural wonders or medieval cities which have always fascinated you, you not only allow yourself to feel truly alive, you also give yourself room to innovate.

The simple fact is that being in unfamiliar environments allows the mind the space to work in unconventional ways. Don’t be surprised if great revelations about the direction of your life, or inspired ideas about your hobbies or career, come to you when travelling.

Invest in self-development

In a sense, this entire article could be said to be about investing in self-development. This point is somewhat more specific, however.

Instead of just investing in activities where self-development is a byproduct, consider also those activities where self-development is the main point, and where fun and satisfaction happily come along for the ride.

By starting a new fitness program, or even a meditation regimen via a service like Headspace, you’ll be directly enhancing your own physical and mental well-being. The renewed sense of vitality you experience as a result can be truly breathtaking.

Meet up with friends

While it’s probably best to avoid spending too much money drinking a bunch of beers down at the bar. Meeting up with your friends should never be seen as just a luxury. It should be seen as something integral to your health and well-being as a human being.

We discover ourselves most deeply in our interactions with other people. The friendships we nurture today can pay dividends in years to come — as a source of happiness, support, contentment, and even opportunity.

Creating Your Early Retirement Lifestyle: Beware The Comfort Zone Rut

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The greatest thing about early retirement is having the time and freedom to do what you want to do, when you want to do it. But when creating our early retirement lifestyle it’s easy to fall into the comfort zone rut. Ruts are easy to fall into and hard to get out of. We constantly tip-toe the ruts in life’s path. But because we are still going in the direction we want they sneak up on us and we fall in.

Unfortunately we can be rut-unaware because we are actually enjoying what we are doing as we fine-tune our early retirement lifestyle. When we are no longer obligated to a boss or work it’s easy to get a little lazy and stick with what’s comfortable. Same goes once reaching our retirement freedom goals. The comfort zone rut isn’t bad because of what we do while in it. It’s more about what we miss out on as we happily skip along early retirement easy street.

I Love My Comfortable Early Retirement Lifestyle a Little Too Much

I just recently had an OMG  moment. We had a long planned vacation where we had an out-of-state family wedding to attend followed by a 10 day beach vacation. I came face to face with the fact that I didn’t really want to travel. The kicker is I really enjoy visiting with distant relatives. Not to mention hanging out among palm trees and the ocean. During the weeks and days before leaving it messed with my sleep and added stress as we prepared for the trip.

Then it came to me. What it really was about is that I love the early retirement lifestyle at home that I have created for us. I didn’t feel like taking a vacation from it. I was in a comfort zone rut.

We did go on the trip and during our travels I realized the importance of pushing myself out of my comfort zone. I took account of what I would have missed and what I have been probably missing lately and neglecting in everyday life.

Being obligation free and having the freedom to always choose ‘easy and comfortable’ over ‘not sure’ meant a lot less spice in my lifestyle. I not only enjoyed our vacation but I met many interesting people. I had great conversations and gained new insights that I would have never experienced if I had elected to stay home in my comfort zone rut.

Here are a Couple of My Observations:

A Break in Routine Can Be a Good Thing

The thing about early retirement lifestyle routine, even when it’s all freely and happily entered into, is it becomes simply a habit. We no longer make a cognitive choice. Not that it’s bad since we do enjoy what we are doing, but in the grand scheme of things it is limiting. It is both enjoyable and comfortable but at the expense of passion and excitement. There are things to be learned from stretching beyond the comfort zone.

What I will now consider in life and restaurants is to go ahead and occasionally pick something different from the menu instead of always picking the same things that I know I like. There will be some selections that will pleasantly surprise me and others not so much. But I will never know if I don’t taste what is available to experience.

Be Open to New Perspective

It isn’t surprising that we gravitate more freely to what we agree with or how we see things. We move toward what closely matches our own identity and thinking. Our ruts can leave little chance of exposure to anything different. We never challenge our views and the ways we see things beyond our perception from a distance. Stretching past our comfort zones allows us to see things from the different angles and have a better understanding of the world around us.

This is where I see traveling in retirement adding tremendous value above just getting a leisure fix. However, I think keeping an open mind and ditching the comfort rut in our day-to-day offers a chance for gaining new perspective too. I don’t have to adopt newly encountered perceptions outside of my own. But I experience personal growth by advancing my understanding.

Appreciate Our Early Retirement Lifestyle

I never stop appreciating my hard-won early retirement. But after removing myself from my comfort rut and a lot of self-reflection, I now feel like in some ways I took for granted everything I really do have. Sometimes it takes the stress of being uncomfortable to place value on the life we get to live. I believe it enhances our gratitude when we turn off the autopilot of routine and habit. I love the living part of my early retirement lifestyle. But it takes a lot of things to pull it off. Like Heath, home, loved ones, etc. When something disrupts my comfort or plans I would get agitated. But there isn’t time for that. I shouldn’t choose agitation and frustration to be in my early retirement lifestyle and instead focus on what I do have with appreciation.

By regularly counting my blessings I will appreciate my early retirement lifestyle and all that I have even more. I don’t use a smart phone. But I always see many people walking or sitting at the coffee shop, even in the company of someone else, with their head down looking at their phone. I believe the comfort zone rut is similar. It’s where we can be preoccupied with our comfort zone existence without recognizing everything going on around us nor interacting fully within our world. There is value in appreciating what we have and the moments we are in. 

Comfort Zone Rut Caused Social Isolation

I am fortunate to have a decent sized social circle. It consists of people I really enjoy having in my life. But it’s obvious to me that it isn’t growing and it may be shrinking due to some more distant relationships being neglected. I think in a way my comfort zone rut has caused a certain social isolation because I no longer reach out to people I care about who are a little more distant from me.

It’s easy to stay connected to people who are in close proximity. The comfort zone rut takes the path of least resistance. We can be blindly satisfied while we neglect others we care about. Early retirement when we are young and active means having the time to whatever we want. Part of that should be occasionally taking time to reach out to everyone we care about both near and far.

What It All Comes Down To

Having the freedom to do what we want to do, when we want to do it, in early retirement doesn’t mean we should only choose what’s comfortable. It is too easy to live an autopilot existence, playing it safe, so to never feel uncomfortable. Life is short and there is so much in the world, even within our community, to experience beyond our comfort zone habits.

I loved my early retirement lifestyle so much that I didn’t really want to vacation from it. I forgot how much I need to have some discomfort in my retirement in order to grow, keep things interesting, and improve myself. It’s now clear to me that comfort is an easy rut to fall into and I will be more cognizant about the daily choices I make. The comfort zone rut will sneak up on me again. It will take a constant effort to recognize it happening and snap out of it.

I think we all could choose to keep our heads up to look beyond our comfort zone and add a little more spice, passion, and excitement to our active early retirement lifestyle. I know I need to occasionally push myself to pick something different from the menu, care for all my relationships, and constantly count my blessings.

Some Early Retirement Observations

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Seven Plus Years In Retirement: So Far, So Good. 

I’m just back from a short four-day Colorado mountain vacation. It was nice to just let go, relax, and count my blessings. The best part was all the laughs. It has me happily reflecting on the past 7 years of my early retirement and taking note of some early retirement observations.

As good as things are now, I can remember before retiring all the fears and questions that I had. Studying and planning can only do so much. At some point we have to jump in and either sink or swim. With anything we do there can be surprises.

Here Are a Few of My Early Retirement Observations

Money

I will start with money because that is what most people are concerned about when retiring early. Will it last? Will it be enough? I think that captures most basic initial concerns. All those warnings that the first 10 years are critical for long-term success are enough to cause anyone pause.

When I first retired EOY  2009 the market was down. Then it slowly climbed up to record highs. In late 2015 it took another dump. Now it is even higher. That’s just in the last 7+ years. Maybe it’s the next 3 years that makeup the critical first 10 that will make or break my retirement funding chances. I doubt it but if it tanks I will deal with it.

My Early Retirement Observations – I am beyond sweating about money now. It isn’t that I have a massive portfolio, it’s just enough. But the experience of living off of my portfolio and seeing the value of diversification has me a believer. Sure, it can still hit the fan. But that is why I keep a bucket of cash to live off of when another financial downturn occurs. I still argue with my CFP about how much should be in there but that is another conversation. We do balance each other out.

We use a kind of hybrid 4% withdrawal rate. When the market dove recently we just effortlessly reduced some spending. Down-market conditions can bring bargains. We took advantage of some Hawaiian travel discounts offered then (we had budgeted and saved for years for a return trip to HI). That said, having a realistic budget and sticking to a financial plan has been the ticket for my early retirement success. So far, so good.

Working In Retirement

I had always intended to retire early and often. Not everyone intends to retire and then go back to doing something they always wanted to do for pay. But many folks do and it was kind of my main thing for many years. Before retirement number one I was constantly warned about the challenges of being age 50+ and landing an opportunity. I now look back at my encore career and other retirement gigs and have to smile.

My Early Retirement Observations – When it came to working in retirement there were some challenges but nothing insurmountable. Working in retirement was better and more rewarding than expected. I was picky and stuck to my guns which flipped the whole working dynamic. Working in these conditions can be fun. The big surprise is that as rewarding as it was I have no desire to jump into another paying gig. I think it’s because I have checked off all the boxes of things I wanted to learn, try, and do.

I have had many chances to get back in the game and have simply said no thanks. I have no idea what will happen next in this aspect. I believe the key is to just stay open to opportunities so I will be able to recognize them. When something comes along that’s aligned with my interests and passions then I’ll just give it review and consideration. I will know it when I see it. I’ll just keep doing my thing and If none come my way then no worries. So far, so good.

Other People

When you don’t have constant proximity to people then relationships come and go depending on the effort made to stay close. It’s easy when you are all shackled together in the rat race. I look back at the past 7 years and am amazed at how my social circle has grown and shrunk. Some faces and names fall off while others are added.

My Early Retirement Observations – I have found that it’s easier to put effort into keeping good relationships where both parties are willing to stay connected. Especially when there are still common interests and our place in life are closer together. I used to worry about it but now I get it. I am the one who jumped the rat race ship that was our main common tie. I have no doubt that we will reconnect as time goes on. Many of my old friends and rat race comrade’s lives will become closer in sync . As far as my social circle and the people in my life are concerned- So far, so good.

Appearance – Clothes, Shoes, and my Curly Hair

Early Retirement Observations
Frank, my favorite monster. T-Shirt

I always saw articles where you can adjust your clothes budget down once you retire. Amen to that. In my case it is way down. I look in my closet and actually have T-Shirts, a couple Polo Shirts, Aloha Shirts and a few of Flannel Shirts for winter hanging there. As for footwear, I haven’t bought anything but athletic shoes and flip-flops since retiring. My work/dress shoes get so little use that they will out last me. I also seem to go a long time between haircuts. I think it is part my non-conformance attitude about society and life. I just go in for a cut when it bothers me. That can take 6 months.

My Early Retirement Observations – We held onto clothes we don’t wear anymore or need for way too long. I just took 100 pounds of our good clothes to Good Will. I think once we retired that we weren’t sure what we would need. I laugh at all the time we wasted looking at them in the closet and just not paying attention. I did wear some when in my encore career so it hasn’t been 7 years of clothes hoarding but still way too long. Better late than never, the closet has a lot of room now. So far, so good.

Retirement Hobbies, Interests, and Passions

I am amazed how some things have cooled while new things have appeared out of nowhere. Mostly what was once a big hot deal in my life is now only warm. I have to believe that it is only natural. As new things come into play, aging, and getting better at this retirement thing I see my priorities shifting. My interest now focuses even more on family and health, both physical and mental.

My Early Retirement Observations – Some of my budgeted spending for things has dropped substantially as my interests and passions have cooled. I didn’t expect that, or at least not to this extent. I still do most of the things I had planned to do in retirement but after the first sprint years I now have a marathon pace. Just part of the early retirement experience and I’m continually getting better at it. So far, so good.

Health insurance – The Talk of the Town

Everyone is talking about health insurance. Will they or won’t they. When I retired I did it with a retirement medical insurance benefit. It cost $470 in 2009 when I first retired. Now I pay $970 for a much higher co-pay plan. The company I retired from was bought a few years back and the new company hasn’t said yet whether they will still allow us retirees to continue buying into their group employee plan. Health insurance has been my biggest budgetary item in retirement.

My Early Retirement Observations – Just like everything else there are no absolutes and I have to roll with the waves. I always thought the ACA was an awesome early retirement alternative. If I lost my first career retirement health benefit it would be a financially painless move to the ACA. However we don’t know what is in the cards right now because of F’n politics.

But if there is one thing I have learned from my 7 year early retirement experience is that I would rather do anything than be forced back into employment servitude. I feel comfortable knowing that I will do just as I have been doing. Figure it out and stay living my life on my terms while using the personal finance smarts that got me here. So far, so good.

Last Words

One of the things that made me laugh while on my short vacation was a T-Shirt sold in all the gift shops.

Calm Down

You’re Just High

(Mountain Town Name, Colorado, Elevation XX,XXX)

I guess that “Calm Down” could apply to anyone who is thinking about retiring soon and is worrying. Or anyone who has retired and still getting some experience living the early retirement life. Especially with all the health insurance issues being up in the air. Don’t get me started on some’s Social Security and Medicare gutting ideas.

Those issues aren’t the last that will show up in our retirement. We deal with things when they become more clear.

My biggest early retirement observation is that being high on the financial achievement of early retirement means never wanting to come down. But hey, we got here and the same smarts used to get here will be used to stay here. Just stay calm, stick to our plan, and work things out.

That is exactly what I remind myself about. I’ve got 7 years of early retirement to look back on and I’ve learned plenty from them. So far, so good.

What are the Best US States to Retire in?

Non-financial Aspects of retirement, Relocating in Retirement

Deciding Where to Live in Retirement: The 10 States Retirees are Really Moving to.

Like many retirees I have considered making a retirement move to somewhere with a little less winter and a little more summer. My wish list aside, doing a search on the best US States to Retire in comes up with as many variations as there are opinions and wish list attributes. With all the different search outcomes I find it to be an interesting twist to see a list of the best US States for retirement based on where retirees are actually moving to.

I always believed that what people really do and how/why they do it is a good indicator of what makes the grade or to be one of the best States to relocate to in retirement. To me it’s no different from checking personal product reviews before buying something. I think it has a value that is different from results based on theory or survey answers as to what makes a good retirement relocation consideration.

The key word of course here is “consideration“.

There are a lot of factors that must come into any retirement moving decision. The study I latched on to is one where United Van Lines used actual retiree move data to come up with the list of 10 best US States to Retire in.

What are the Best US States to Retire in?

Since United Van Lines is in the moving business it makes sense that this data shows what retirees on the move value today in where they want to live. It does give a glimpse at why these states came into the top 10. Knowing what these states share allows us to open our own thinking to what factors make for a smart retirement move. Or at least what retirees on the move are valuing. Any of us that are interested in making a retirement move can then see if we are on the right track.

There are a couple of surprises in their study results.

It’s not all sunshine and recreation although that still appears to be a popular factor. That is if it meets the other details that seems to be prevalent.

I have actually spent time in 6 of the 10 best states that the United Van Line’s study shows retirees moving to. I can agree that they could be an attractive destination based on my limited experience. Or at least worth consideration and more research if I had no set ideas on where I wanted to land.

The 10 Best US States to Retire in: Where Retirees are Moving to

The United Van Lines’ 40th Annual National Movers Study for the most part shows that retirees are moving to states that offer what is seen as a financial bump. That being a little help by way of friendly retirement tax policies. I’m not too surprised since many of today’s retiree’s need to be concerned with their long-term retirement financing. Lower taxes would certainly help to smooth out rising “living” costs. Especially when considering the ever climbing cost of health care. What was a surprise is that some of the retiree destinations are snowy winter-prone states. It just goes to show – different strokes for different folks.

Here are the 10 Best US States to Retire in:

1. Delaware

Delaware comes in as number 1 and it seems that this is where retirees move who want a lower cost east coast retirement. All that and proximity to several major cities and the Atlantic coastline. Delaware evidently offers both the east coast lifestyle many retirees want and some attractive state tax benefits.

  • Delaware doesn’t tax Social Security benefits.
  • It has significant pension deductions.
  • Delaware income taxes are capped at 6.6%.
 2. Florida

It was no surprise that Florida is at the top of this list. When you think about retirement locations it’s the first thought-of destination. Florida has a lot of affordable living and recreation to offer. Having 1,250 golf courses and 663 miles of beachfront is an attractive retirement draw. And then their income taxes, oh wait, what income taxes?

  • Florida doesn’t tax Social Security benefits.
  • There is no state income tax.
  • Retirement income isn’t taxed.
3. Nevada

Nevada is certainly a well-known low-tax haven for retirees. That and if you are into it, gambling, golf, and entertainment easily comes to mind as why retirees are moving to Nevada.

  • There is no state income tax.
  • Broad Social Security and pension exemptions.
  • Nevada has no state inheritance or estate taxes.
4. South Carolina

At #4 South Carolina wasn’t a big surprise to me. I think of warm weather, recreation and laid back southern living when I think about South Carolina. But I didn’t know about their retiree attracting low taxes.

  • South Carolina has one of the lowest state tax rates in the US.
  • South Carolina doesn’t tax Social Security benefits.
  • Retirement income has many money-saving tax exemptions.
5. Arizona

Along with Florida, Arizona is always recognized as a place retirees love to move to. More summer (a lot more) and little if no cold winters in most of it. You certainly can still find snow if you want it (think Flagstaff). Recreation is something that is a huge draw but there appears to also be a financial factor.

  • Arizona doesn’t tax Social Security benefits.
  • Seniors enjoy property tax breaks.
  • Arizona has no state inheritance or estate taxes.
6. New Mexico

New Mexico is known as the “Land of Enchantment”. Recreation is again something that draws retirees there. From hiking and mountain-biking to winter sports like skiing and snowboarding to summer time water sports.

  • New Mexico has lower state sales tax rates.
  • New Mexico retirees enjoy an $8,000 exemption on their retirement income taxes.
  • For those 65 and older there are also tax rebates.
7. Idaho

Idaho making the list was a surprise to me. I always considered it a best kept secret for what it has to offer. Known for its spuds, Idaho happens to offer a very scenic state with plenty of recreation and if city life is what you want Boise offers all that retirees want. Once homeowners reach age 65 they can apply for an Idaho state offered temporary property tax deferral program.

  • Idaho doesn’t tax Social Security benefits.
  • No state sales tax for prescription drugs.
  • Qualifying people enjoy retirement benefits deductions.
8. Montana

When I think about Montana I think wide blue skies. I also think about its vast unspoiled areas and it’s beauty. If getting away from the crowd is your thing then Montana fits the bill. Montana does tax Social Security payments and your other retirement income

  • Montana has no state sales tax.
  • There are some retirement income exemptions offered.
  • Montana does have some tax breaks and property tax assistance for seniors.
9. Maine

Maine makes the list even with all of its snowy winters. Maybe because it also has over 200 miles of coastline to make up for it (I kid). Retirees who want 4 real seasons can enjoy warm summers and cold winters. New England’s northernmost state is a scenic retirement destination.  

  • Maine doesn’t tax Social Security benefits.
  • There are some pension-income exemptions available.
  • No state sales tax for prescription drugs and food.
10. New Hampshire

Known as the “Granite State”, New Hampshire is where you can see plenty of picturesque barns and farmhouses. It definitely offers a certain kind of New England retiree lifestyle. New Hampshire does have highish property taxes and it does tax your interest and dividends, but…..

  • New Hampshire has no income tax.
  • There is no state sales tax.
  • Retirement income is not taxed in New Hampshire.

Final Words on the best US States to Retire in

As I said, you can get a lot of different answers when searching for the best US States to retire in. Everyone has a different wish list and value different perks to make a place attractive for retirement. Fact is, for many retirees none of the above matters if the primary desire is to be close to family. But I thought I would share these results. I had posted a few weeks ago 8 money-saving places to retire abroad and thought this would be an appropriate companion article.

This list provided by actual retiree move data is interesting. However, it is at a “state” level and each of these states offer entirely different lifestyle options depending on where in the state you target. Some even have different weather within the state’s footprint (less winter, more summer, vise versa). More research would be needed to get to that perfect retirement location and there is a lot to consider other than financial. 

From what I see, what sticks out is that many retirees are interested in state tax relief and recreation opportunities. Even when snow is involved. I hope you find this study’s results interesting. It is obviously limited to retirees who have hired a moving service and may not represent all retirees. But I still think it is interesting and has value.

As far as my retirement relocation thoughts: My wife and I have already decided to stay put in Colorado and live with our 4 seasons. Seasons that include snowy winters. All because we value staying close to our kids and grand-kids above all else. But if I were to make a retirement move…..

Early Retirement is a Mistake for Some People

Non-financial Aspects of retirement

But it doesn’t have to be terminal: What to lookout for.

Most people who retire early have their numbers figured out. But for some people their early retirement is a mistake. A mistake they will regret and claim they were seduced or duped by an early retirement illusion. Just because you can doesn’t mean you should retire early. At least not until you understand your own head and your early retirement “why”. People understand the importance of getting the early retirement math right. But many underestimate the mental side. Happiness happens between the ears.

A couple of recent conversations with early retirees claiming early retirement regret has reminded me of that. We have shared early retirement experiences but with different conclusions.

Even with all of my planning my early retirement messed with me a bit until I made the complete transition. But for others the transition doesn’t happen or happen fast enough because of what wasn’t seen as necessary to plan for.

Then there are those whose plan was spot-on but they didn’t see the signs of their pending problems. We have to recognize a problem before we can take positive corrective action.

Early Retirement is a Mistake If You Can’t Adjust Your Performance Driven Conditioning

Early Retirement is a Mistake for Some PeopleWe all begin our conditioning for performance and approval at a very young age. In school we push to get good grades. Then there is our decades in the rat race. Performance measurements, objectives, goals, etc. where we try to measure up and advance in some way. We compete with others whether we do so intentionally or not. Then we retire and it’s just us. All of our lifelong conditioning if left unrecognized, unchecked, or not planned for can turn anyone’s early retirement into a mistake.

For most of us this performance and approval based dynamic is the only life we have lived. Early retirees are usually very driven. It’s no wonder that retiring early before we are physically or mentally broken can lead to thinking our early retirement is a mistake. Our drive to succeed and perform doesn’t magically disappear when we walk off into the early retirement sunset. But it should change and we can change it.

How to Make Sure Early Retirement Won’t be a Regrettable Mistake

Some early retirees like the two I spoke with have feelings of dread that they made a big mistake. I admit that I felt a little of that too after the celebration of my early retirement faded. It only gets worse if not addressed. Going from being a hero to being a zero was how I felt it. For years I was the go-to guy for everything important. Then in a flash I was seen by the world as unemployed. I thought I had everything figured out and planned what I was retiring to.

My two pals claiming that their early retirement is a mistake also thought they covered everything. I feel that I was able to quickly make the transition. They are still trying to work things out.

Nobody wants to waste their priceless time on early retirement regret. There are things we can do so that retirement regret can be avoided, reversed, and/or managed.

Know Why You Want To Retire Early- What Are You Retiring To?

It’s something people forget to plan for. Retiring to something is overshadowed by what is being retired from. The celebration of ditching the rat race and everything that goes with decades of work obligation is wonderful. But the exuberance of a retirement based on what is being left behind is short-lived. Knowing what we are retiring to and identifying it as why we are retiring early is what helps us avoid early retirement regrets and feeling it was a mistake.

I have said it many times, nobody wants to or will enjoy retiring into a void. Leisure is great but our brains have been conditioned towards productivity. We have to replace the drudgery of unfulfilling work with things that we value to ensure long-term happiness.

First off make a plan to retire living a healthier and happier life and really think about what that means to you. Satisfy your brain’s conditioned need for goals and measurement with what it is that you want to do or accomplish. Is it a business venture? Maybe an encore career, stepped down job or volunteer work. Do you want to spend more time doing hobbies and activities that you enjoy?

I planned for what I was retiring to but there were some holes. My biggest miss was that I underestimated my social circle. I planned on having an active social life in my retirement. But after decades in a career I found that my circle of friends was exclusively work related. I felt it and then set upon a plan to meet new people. Recognize whatever it is that’s missing and plan to fix it. Don’t abandon early retirement and call it a mistake.

Recognize the Importance of Structure– Your Brain Needs It

Our brain is conditioned to function under structure. It makes more sense to us when things start and finish at certain routine times. We should have planned scheduled timelines. They can be loose or rigid. It’s our call. But believe me, it is necessary. We feel better when in healthy and productive routines. Our routines then turn into healthy and productive habits.

Without this structure we can drift without accomplishment and our brain’s conditioning feels like we have wasted time. It can lead to things like anxiety, depression, and self destructive habits. All of which leads to classifying early retirement as a mistake.

I learned early on to introduce structure into my early retirement. I routinely exercise during certain daily timeframes, work on projects, socialize, etc. If I didn’t place some kind of timelines I would never routinely get to it. Not fulfilling what I wanted to retire to would be in the back of my mind always messing with my mellow.

Value Self-Approval : No Second Party Appraisal Rendered or Required

Some people’s brains value appraisal and feedback more than others but everyone understands when it’s missing. That pat on back for a job well done all ends with early retirement. It was a huge part of our conditioning from school grades to job performance reviews.

Understand the need to value self-approval for your early retirement. It starts with celebrating early retirement and continues with retiring well. Early retirement is a huge accomplishment in and of itself. Every month, fiscal quarter, and year of successfully living life on your terms in early retirement should be awarded with your own approval.  

After the first few months of early retirement I was aware that nobody but me really cared about my accomplishments. Everyone appreciates positive feedback. I soon learned that my happiness in early retirement is all the positive feedback that I need. When feeling other than happy then that is when self assessment is needed and corrective action taken.  

Last Words

There are many things from financial to the brain that can cause someone to claim their early retirement is a mistake. But it doesn’t have to stay or end that way.

One of the early retirees who claimed his early retirement was a mistake returned to the rat race at his old company. He is working 50 hours a week and is stressed out. But said the lack of forced structure in his retirement had him only looking forward to happy hour. He was drinking too much and over-eating. His Dr. told him he was headed for a heart attack. I am not sure jumping back into the performance driven stress-pool is the right answer. But I am certain he will retire again soon and make the necessary mental adjustments to feel good about his early retirement.

We can counter our lifetime of conditioning when it raises its ugly head. Another thing we can do to tame our brain’s performance driven conditioning in early retirement is recognize the important job we now have.

  • Portfolio Manager for the $XX-figure portfolio of a very important client.
  • Accounts Payable/Accounts Receivable Manager.
  • Leisure and Activity Program Director.
  • Project Manager.

The job is extremely flexible, fun, and rewarding. Best of all the boss is very appreciative.

Leisure Freak’s Three Year Anniversary

Non-financial Aspects of retirement

This month marks Leisure Freak’s Three Year Anniversary. It has been a wonderful ride, full of fun and discovery. I look back and have to laugh at how naive I was about creating and running an Early Retirement website/blog. I didn’t even know what blogs were when I started. Today Leisure Freak has 89 static pages and 161 posts (counting this one). Not bad for a leisure freak who set out to learn about how all of this interweb stuff works through doing it. 

Leisure Freak Goals-

Primarily I want to help others in their financial independence early retirement journey be successful. There are some real mind-effs that come with retirement and I try to cover them on Leisure Freak. From retirement fear and making the work to retirement transition. To looking beyond finances when it comes to paying yourself first and retiring well. I think that if anything else that is where this website shines.

Leisure Freak isn’t just information based on financial theory or long-held traditional retirement beliefs. It has basis in real life early retirement experiences.

My goal is to continue along those lines by including the often missed non-financial aspects of retirement.

Leisure Freak’s Three Year Anniversary Marks Some Recognition & Mentions

I have been honored lately with a couple of recognitions and noteworthy mentions. I don’t go out to promote my Leisure Freak Tommy persona or the Leisure Freak site because I am just too busy in my early retirement for that. I’m sure if I did, LeisureFreak.com would have a larger following. But this was never meant to be an all-encompassing endeavor. It is something I started so I could learn from it and have some fun at the same time. This year (2017) has brought the following:

Leisure Freak’s Three Year AnniversaryFeedspot selected/awarded Leisure Freak to be in their top 20 early retirement blogs.

Self Directed Retirement Plans – I was invited to answer some retirement based financial questions and be part of their 78 Retirement and Financial Planning Tips from 26 Financial Experts.

Rockstar Finance- Leisure Freak is part of their “Best Blogs” list. Rockstar blog directory: Category- Early Retirement

Freedom is Groovy, Make Wealth Not Debt- I was included in their Early Retirement Highs and Lows: Eight Top Bloggers Weigh In post. It was an interesting reflection and I enjoyed sending in my thoughts.

Thank you all. I appreciate it.

Plans for Leisure Freak’s 4th Year

My plans for this next year are fairly simple and more of a continuation of what I have been doing:

  • Try to at least write a couple of new posts each month.
  • Grow my followers.
  • Expand the Leisure Freak brand within the limits of my interests and fun equation.  

For me personally,

I WILL stay curious and continue researching everything finance so I can share anything new with my readers.

I WILL also continue visiting my favorite financial independence and early retirement (FIRE) sites/blogs. There is so much to learn and things are always changing.

Most importantly I WILL stay true to what I value most.
  • Financial Independence and freedom to live life on my terms.
  • Living a Passion-Drive Life. Always being open to paid opportunities of interests and passions.
  • Simple Living / Frugal Living by valuing what is truly important in life. I assure you it isn’t about stuff.

I guess that just about does it.

Thank You

Thanks to all of Leisure Freak’s readers and followers. I appreciate all of your page views and comments.

My early retirement and the Leisure Freak site has been an awesome adventure. I am happily looking forward to see what year 4 brings.