I thought I'd share some blogger thoughts on hurdling age 60 this week. This is not deep philosophy just some random retirement-finance blogger comments. The milestone has not only allowed me to shift my thinking from a posture of "early retirement" to, let's say, "more conventional retirement" but also to reflect on where I was then (before 60) and now am.
"Early" Retirement Between Age 50 to 59
- Work was disfavored over care-giving for children
- Travel was forsworn for the same reason (as well as the hard impact of discretionary spending)
- Presence of young lower school age children shaped lifestyle
- Fear and incomprehension relative to the basic math and processes of retirement was high
- Still in pre-retirement accumulation mindset though no formal W2 income
- Marginal cost of procrastination (e.g., bucket lists, relationships) was low or zero
- Retirement finance focus was almost exclusively "financial sustainability"
- Was slowly building layers of ret-fin knowledge
- External priorities were limited in favor of children and family
- Internal mind-age was 27, real age notwithstanding
Ongoing Retirement - Passing the 60 Threshold
- Work is radically more interesting if for no other reason than social connection and mind stim.
- Travel is sought out and formally budgeted and well controlled...for the most part
- Children are aging out of my care; there is light at the end of the tunnel; time for new lifestyle
- I have "seen" and internalized the basic (and more complex) math and processes of retirement
- Getting vaguely more comfortable with a decumulation mindset as control has been achieved
- The marginal cost of procrastination feels high and is getting higher every day
- Retirement focus is shifting towards meaning, purpose, and identity
- While my ret-fin knowledge has grown in linear terms, what (I know) I don't know is exponential
- External priorities vis-a-vis community and public policy are getting higher
- Internal mind-age is still 27, joints notwithstanding; morning mirror views more appalling than ever
Happy to find your blog through Tadas Vishkantas' Abnormal Returns.
ReplyDeleteCurious what was your approach to personal finance and retirement pre 50. Did you do any planning whatsoever in your 30s and 40s? What was on your mind then? How did it impact your later decades?
Thank you!
No, I was pretty fortunate pre-50 and while the "sun shone" I didn't ever even really think about it that much because there was a margin of error at that time. I had advisors that told me everything was ok. A divorce, a move, and economic crash in 08-09 broke the magic. In 2011-12 (post 50) I realized I had taken on way way too much risk in an early retirement and started a crash course in how to turn it around. I learned the math. I cut lifestyle 50%. I added some sources of income. I managed to a balance sheet and an income statement. I learned to keep my finger on the pulse of my evolving situation and to control spending. Fortunately I retired into the longest bull market in history. My real genius was being lucky. Twice. We'll see if I can keep that up. Looks like you are from Poland, land of warriors and poets. Thanks for the note.
ReplyDeleteThanks for that reply.
ReplyDeleteSuper interesting. One thing I've noticed and your note confirms this intuition is that once you're on board with corporate finance concepts (balance sheet, income statement, cost control, evolution management using processes like risk management or change management) applying them to personal finance in a practical way can go a long way towards getting your financial act together.
It's only that most people don't want to apply the rigors of corporate world to private life.
Yep - Polish guy here, hoping one day Poland could evoke images of the land of smart entrepreneurs and prudent navigators of global business and geopolitics :)
Individual retirement planning is only starting here as a serious concern so it helps to read up on best practices in places where you've done a huge amount of thinking and trial and error in this area. Compared to what's available locally, quality and variety of financial content in English, especially from blogs, like yours, is simply too good to ignore it.
Thank you!
Honored! Yes, my own personal turnaround was enhanced by viewing the entirety of my household personal finance situation as akin to running a small company complete with financial statements, statistical process control, ops research and so forth. I agree that not everyone (no one?) wants to or is interested in taking on this complexity, nor do I believe it'd add value for everyone. On the other hand I chuckle at folks that are unwilling to track at least their expenses or to do a few calculations to try to stay solvent because it's too hard or too much work. It's maybe like saying it's too much trouble or too boring to grab the joystick of a crashing plane with no pilot.
DeleteGood luck. Love Poland. Would love to visit some day. Let me know if I can help. I am an amateur with no academic or professional pedigrees, just a guy trying to figure it out on my own, but I'm glad if anything I do helps.