Early Retirement Hindsight: What I Would’ve Done Differently

I feel truly blessed to have been able to pull off an early retirement. I take great pride in being able to take the leap at the age of 51. It came after a long career with a less than a 6 figure salary. Still, after experiencing early retirement for many years and knowing what I know now, I often think about what I would have done differently. Allow me to share my early retirement hindsight.

Early Retirement Hindsight: What I Would’ve Done Differently

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My Early Retirement Hindsight – The Things I Would’ve Done Differently

I Would Have Set Aside More Cash

It took time to get my retirement footing even with all the research and planning I had done. I retired with just a bit over $20,000 in non-retirement account cash available to me. It was my emergency fund, there in case I had lost my job. That certainly wasn’t an issue anymore with retirement. Looking back at my financial journey, my desire for investment growth had me underestimated how much having sufficient cash reserves can calm one’s retirement transition. Believe it or not, retirement can mess with your mind after spending decades in the rat race trenches.

Everything worked out but in early retirement hindsight I would’ve had $40,000 in cash to get through my retirement transition. It isn’t even about spending it. Instead it’s about knowing it was easily available if I needed it or wanted to spend it without having to liquidate investments.

I Would’ve Prioritized Mortgage Payoff

I never gave early mortgage payoff a thought before retiring. It did get paid down over the years and I refinanced it for the lowest payments possible. I simply figured it best to direct any extra money toward retirement savings and planned for a retirement that included a manageable mortgage payment. We rationalize that we will get better returns than the mortgage interest we save with payoff. That is until we don’t and invested money goes negative as it did when I retired in 2009.

I did prioritize mortgage payoff a few years after my first early retirement by directing the salary of my encore career to it. Years have passed since that payoff date and it still makes me smile. I underestimated the benefits. Yes, we can expect over time, investment returns to exceed mortgage interest. For some people the tax deduction also comes into play, or it used to. But in the end, without a mortgage payment you not only save that interest but you need less in your retirement budget. That means less taxes paid year after year. So much of our having a great retirement is mental. Being mortgage free certainly adds another level of mental freedom.

I Would Forget Any Notions About Loyalty & Leaving A Career Legacy

In early retirement hindsight I really messed up here. I stayed dedicated to the company and job to the bitter end. Even at the detriment of my personal life in the last years. I had built a legacy of good work and accomplishments and didn’t want to slow down and possibly tarnish it. Simply put, as far as the corporate world goes I was a dumb-ass. Nobody really cares and the memory of our efforts quickly evaporate once we are out of sight. We falsely build up in our minds the importance of leaving a workplace legacy because we are in a relationship with the company and our team of coworkers. But the reality is the relationship is just business and survival.

During a time of constant layoffs that were supposedly performance and economic based, I should have said screw the legacy and proactively made myself an attractive candidate for a severance package. All it would have taken was dragging my feet a bit and using the word “NO” when approached with asinine demands a few times. There were certainly numerous opportunities for doing that. In hindsight, had I done that I would have built up my earlier mentioned cash reserve deficiency and put an even bigger skip in my early retirement rat race escape.  

I Would Have Gained Pre-Retirement Side Gig Experience

I have had a couple of really enjoyable retirement gigs. But there is one that got away and I wonder, what if? I certainly had a passion to do it and was qualified as it wasn’t anything super technical that required advance skills or education. I was dismissed as a candidate because I was overqualified based on my career and I had no real experience doing it. In early retirement hindsight I wish I had slowly scaled back my career effort and responsibility to make time to do part-time work in this different field before I pulled the retirement plug. It’s probably easier to get a foot in the door part-time while still working. I should have been more selfish with my time and personal desires. I regret not having been able to pursue this target of interest and passion even if in the end it didn’t work out or lasted long.

Looking Back At What I Think Went Better Than I Thought It Would

Embracing Frugal Living – This not only got me to early retirement but has proved a blessing for a great early retirement lifestyle.

Retirement Gigs – When you spend decades in the rat race it is all you really know. I can’t explain how different, rewarding, and enjoyable it is to work doing something you really want to do for only as long as you want to do it.

Social Expansion – Putting in the effort to increase my social circle beyond work is one of the most fulfilling parts of my retirement. Connecting to my community has been an important key to retirement happiness.

My 72t Strategy – I funded my early retirement with an IRA using 72t for penalty free monthly distributions. It is seldom talked about and when it is there’s many cautions. I couldn’t have done what I have done without using this backdoor retirement funding approach.

 

I am sure there are a few more things in hindsight that I could come up with that I would’ve done differently in this early retirement adventure. There are always ways to have done something better. I can say that I have absolutely no regrets about retiring early or what it takes to do it. When breaking the work-to-old-age norms there is always risk. But done right or as close to it as possible, it is 100% worth taking the risk.

22 thoughts on “Early Retirement Hindsight: What I Would’ve Done Differently

  1. I had paid off my house several years before I retired. We have no children and I did not want to be at the mercy of the real estate market if I were laid off. I put the money that would have gone to a house payment into savings and 5 year CDs. Once I retired I lived off of it to let my Retirement IRA grow before taking a 72T. I had some stock from different mergers and break ups as well as some US Savings Bonds from 25 to 20 years earlier. I should have sold/cashed them earlier on in retirement when my taxable income was Zero. It just didn’t occur to me until I felt like I needed the cash and was drawing my 72T

    1. Thanks for the comment Ralph. Having your house paid off long before retirement and ramping up your investment rate with the payment amount sounds like a winning early retirement strategy. Missing out on doing tax efficient sales and Roth conversions during periods of low or no income is probably something that many overlook and can now look back on thinking how they could have done things differently.
      Tommy

  2. Enjoyed reading your perspective on this Tommy. Good points others can learn from. I know in recent years its all been about being invested with the large bull market returns, but having a good amount of cash can really put you at ease. And like you said, its not about even spending it. I’d hate the thought of selling a bunch of shares that are way down during a sell-off just to pay your bills. You are right about company loyalty. I was unceremoniously laid off after 18 years and that was it. I always cared about my work and was on top of things. Funny how over the years I heard the mention of team and “like family”. What a joke. Best to play the game and maximize whatever benefits you are getting. Look out for yourself every step of the way and don’t leave anything on the table. The upside was I got 3 months severance plus 6 months unemployment. Free money that I was never used to getting. I’ve read in the news about some good sounding buyout packages. A real blessing I think for someone thinking about making a change or retiring early. Might as well get paid instead of just quitting. Side gigs are a good thing too and something I’ve kept going for many years. Its good for extra money plus keeps you sharp and on your game. Plus it gives you a better feeling about your finances when you at least have something coming in. The frugal mindset and lifestyle is a powerful part of the equation too and most times you are better off for it.

    1. Thanks for the comment Arrgo. I also read about the recent management buyout at Verizon, the same industry I used to be part of. I thought what a great kick off for anyone who has been financially aware and preparing for their early rat race exit. One of the biggest challenges for people is seeing through the Corp BS and realize it isn’t a 2 way partnership no matter what they say. We exchange our time and skills for money for as only as long as they think they can make money off of us or, and this is what needs more focus, we do it for only as long as we wish to.
      Tommy

  3. I took a year off to decompress from working for 30+ years. When I went to look for work as a Software Engineer I got a lot of “You have been gone too long, everything changes too fast.” That was BS – somethings may change but the basic code was the same. What they really meant was “You are too old at 50.” in 2010 there were few technical jobs and places like Costco were giving preferential hiring to Veterans. I am glad I was prepared to be unemployed for a long time.

    1. Thanks for the comment Ralph. You were financially prepared for what they consider voluntary unemployment which goes against the corp system of financially desperate employees. You had 3 things going against you. That, the BS time off/age penalty, and 2010 was still high unemployment numbers during the early stages of the recession recovery. Now many employers are begging for people like you but my guess is you have figured out you’re no longer attracted to what they have to offer. Early retirement made me one picky SOB when it comes to paid work I am willing to do.
      Tommy

  4. This is helpful insight as we look to retire early in 2-5 years. We had started talking about a cash pile-up so this story reinforces that notion.

    1. Thanks for the comment Anne. I have not regretted my decision to increase cash holdings and don’t worry as much about the market volatility. I have found my risk tolerance sweet-spot for a more enjoyable retirement.
      Tommy

  5. I found your thought on corporate loyalty to be a lot on. The value is certainly more about how we perceive our own contribution albeit strong and value added than how a company really values and employee. I left one career for personal circumstances before I retired and when I tried to return to the same career, it was like I had no experience at all based on their feedback I was given from being “out of the industry” for 4 years. When I retired early and left the company I was working for then I felt that even as I was transitioning my role to others that what I had developed over 5 years was never going to survive. In the end, it didn’t while having been a key part of the strategy. Do good work and create value but never believe that a company care more for an employee than the corporate goals.

    1. Thanks for the comment Troy. Only the people in our immediate orbit cares and that’s because they will be the most impacted, not the corporate system. I found that even those we consider close in our orbit also soon care less as they have to align themselves with others there that can advance their survival odds instead of our pre-retirement ghost. Can’t blame them for that. Best to evaluate what is best for us personally and forget about any work legacy issues that are merely figments in our own mind anyway.
      Tommy

  6. Time is valuable, and recently this was pressed home to me. I met a fellow that I worked with about 8 years ago. At that time he was late career but looking good for his age. He retired and came back as an auditor – but looking much older, the past 8 years were not kind to him. This really pressed home the value of time and that you really don’t know how many healthy years you have left. We will likely live long given the advances in medical care – but the quality of those years is what matters. Will we be able physically to do the things we want to do? Congratulations on retiring early. Take advantage of a long period of go-go years. Strongly advise that you prioritize taking care of your health with the extra time that you now have. Cheers….

  7. I enjoyed your post, especially since I will be retiring next year, not exactly early as I am 62, but earlier than many and on my own terms. I am counting the weeks and happy to have checked off some of the key points you made. The retirement home is purchased, fully paid off and being rented until next spring. I have no delusions about the company caring about me or loyalty to the company. That went out the window when the family owned company sold and the new owners ruined the culture and morale. A couple of co-workers have told me they plan to start their exit plan when I leave because they know their situation will be worse when I am gone (we’ll see if that happens, no delusions there either). I have some small side gigs that I will ramp up and my husband, a few years younger, plans to keep working to cover health insurance and the reserve cash is good and will be augmented by the house we live in now. Life is good and your post was reassuring to think we are on the right track.

    1. Thanks for the comment KarenS. Congrats on your upcoming retirement and doing it on your terms. I am happy that you you found value in the post. Sounds like you have things well thought out.
      Tommy

  8. what are you doing about health insurance. If I want to leave early and medicare doesn’t start until 65, how do stay insured without spending all of your money??? It would cost a fortune for Cobra insurance and if you get ACA they still take your last year income (over 100k) and it would cost more than Cobra, I think…How do you do it???

    1. Thanks for comment Tracy. Because I survived 30 years at my company I had a grandfathered retirement health benefit that allows me to buy into the employee plan. It is something they decide year to year whether to continue offering. I pay $1340 a month (2019) for my wife and I. It has a deductible I have to pay out of pocket before they hit the 80%/20% payment benefit and then an out of pocket max like most other plans today. As for the ACA, subsidy is based on expected household income for the year you want coverage, not your last year’s income. Unless of course it will be the same.
      Tommy

  9. I am fortunate to have enough to retire, however I am enjoying what I am doing, helping others and being paid very well to do it… so stopping work to retire early seems like a dumb choice

    1. Thanks for the comment Peter. Sounds like you are in a good place and hopefully you continue enjoying what you are doing for a long time. I certainly felt the same way about my retirement gigs when I was doing them. It’s the reason why I will always be open to the right opportunities in my retirement.
      Tommy

  10. Thanks Tommy. I’m really happy to read this from you. Keep living the dream buddy and if you and your family ever want to check out the Great Barrier Reef, Daintree Rain Forrest and Cairns then drop me a line and we can show you around (local knowledge). BTW Click on my pic for the info link I wrote last year
    Cheers
    Pete

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