In Zygmunt A. Piotrowski and Albert M. Biele 1986 book “Dreams: The Key to Self-Knowledge”, the authors write that “each dream is unique, like a fingerprint; dreamers unwittingly reveal their preferences, antipathies and anticipations.” While the doctors are focused on the dream as a sleep state event, most of us dream awake, conjuring up visions of what life would be like in a future that is uncertain – as all futures are. Yet dreaming of retirement, as singular as a fingerprint, is something many, if not all of us entertain.
And when we do, we try to balance the harsh realities of now with the opaque hopes that retirement offers. This balance is no easy task. The unknowns are numerous: taxes, inflation, the amount we need to maintain what we see as comfortable. But the dream of retiring early is still possible for more of us than we think. So what is a early and what does an early retirement look like?
Perhaps in the late nineties, as the almost two decade long bull market run was coming to a close, retiring early meant locking in those gains in anticipation of those gains (mostly in the stock markets) would continue uninterrupted for the rest of our lives. We anticipated 10% returns as if they were locked in. We suffered antipathy when fail to see our own faults as our own (many of our retirement assumptions were front-loaded with the inability to acknowledge that our reward was due to other’s mistakes and worse, may not last). And we underestimated our preferences and overpaid ourselves in the initial years.
Yet retiring early is possible, a dream too few of us entertain, instead dreaming about it and agonizing over our inability to actually pull it off. Early retirement, at least the successful sort, involves some key characteristics.
Ernest Alexander, when he was looking at what urban planning involved wondered: “when one is doing planning, what is actually taking place?” Have you asked yourself this question? Are you, as he suggested, simply “laying bricks” as a bricklayer might answer when asked what he was doing or are you building a cathedral? Mr. Alexander believed that essence of a good plan is a marriage of sorts between practice and theory. Aristotle called it praxis.
In this concept, where we are is not isolated. It is in fact, something of a result of not only where we have been but what got us there. For many of us it has been work. And yet we see work as a brick laying project without an end result. We save (and lay a brick) and we do so without any real concept of what brick upon brick may eventually result in. Without the whole plan clearly pictured, what is our agenda?
Is working in retirement, based on the idea that we are constructing some ideal, some dream, some plan, actually as repulsive as many suggest it is? I have long been an advocate of creating something mid-life, mid-career that would be not only pleasurable but (retirement) sustainable. While we hear all too often that we will need to work longer in order to retire, why do we believe that this is something of a punishment?
No one suggests that we do the same thing. What they do suggest we do is something, anything that will offer compensation so as to add to our retirement savings and at the same time, limit what we actually withdraw. It also has a side effect that few mention: working tends to cost far less than retirement. We have less time to spend and more time to earn and without a doubt, this will add to some of this much sought after peace-of-mind retirement all of us dream of. (This could include the access to benefits that may not be available in retirement such as health care coverage.)
If that is theory (work too long at one job, and it becomes drudgery; work at a different job with your life skills in tow reinvigorates), then what is the practice? It goes without saying but bears mention nonetheless: knowing what it cost to live now (aka a budget) can help you adjust, in real time, what retirement will be like. If you think you are saving enough, you probably aren’t. If you think you can live exactly the way you do now, you probably can’t. You are letting the dream intercede, you are shifting your shortcomings onto the process and that impacts your anticipation.
The practice is understanding what it costs now and reducing those expectations of what is available to spend by 3% each year. The practice is increasing your contribution to your retirement by 3% each year. The practice is to earn 3% more each year. The theory however is not so easy to explain. But perhaps the late Douglas Adams can. In his book “The Hitchhiker’s Guide to the Galaxy”, he writes: “There is a theory that if anyone discovers exactly what the universe is for and why it is here, it will instantly disappear and be replaced by something even more bizarrely inexplicable. There is another theory which states this has already happened.”
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Retirement Planning: Is Your Plan to Retire Early on Track?
In Zygmunt A. Piotrowski and Albert M. Biele 1986 book “Dreams: The Key to Self-Knowledge”, the authors write that “each dream is unique, like a fingerprint; dreamers unwittingly reveal their preferences, antipathies and anticipations.” While the doctors are focused on the dream as a sleep state event, most of us dream awake, conjuring up visions of what life would be like in a future that is uncertain – as all futures are. Yet dreaming of retirement, as singular as a fingerprint, is something many, if not all of us entertain.
And when we do, we try to balance the harsh realities of now with the opaque hopes that retirement offers. This balance is no easy task. The unknowns are numerous: taxes, inflation, the amount we need to maintain what we see as comfortable. But the dream of retiring early is still possible for more of us than we think. So what is a early and what does an early retirement look like?
Perhaps in the late nineties, as the almost two decade long bull market run was coming to a close, retiring early meant locking in those gains in anticipation of those gains (mostly in the stock markets) would continue uninterrupted for the rest of our lives. We anticipated 10% returns as if they were locked in. We suffered antipathy when fail to see our own faults as our own (many of our retirement assumptions were front-loaded with the inability to acknowledge that our reward was due to other’s mistakes and worse, may not last). And we underestimated our preferences and overpaid ourselves in the initial years.
Yet retiring early is possible, a dream too few of us entertain, instead dreaming about it and agonizing over our inability to actually pull it off. Early retirement, at least the successful sort, involves some key characteristics.
Ernest Alexander, when he was looking at what urban planning involved wondered: “when one is doing planning, what is actually taking place?” Have you asked yourself this question? Are you, as he suggested, simply “laying bricks” as a bricklayer might answer when asked what he was doing or are you building a cathedral? Mr. Alexander believed that essence of a good plan is a marriage of sorts between practice and theory. Aristotle called it praxis.
In this concept, where we are is not isolated. It is in fact, something of a result of not only where we have been but what got us there. For many of us it has been work. And yet we see work as a brick laying project without an end result. We save (and lay a brick) and we do so without any real concept of what brick upon brick may eventually result in. Without the whole plan clearly pictured, what is our agenda?
Is working in retirement, based on the idea that we are constructing some ideal, some dream, some plan, actually as repulsive as many suggest it is? I have long been an advocate of creating something mid-life, mid-career that would be not only pleasurable but (retirement) sustainable. While we hear all too often that we will need to work longer in order to retire, why do we believe that this is something of a punishment?
No one suggests that we do the same thing. What they do suggest we do is something, anything that will offer compensation so as to add to our retirement savings and at the same time, limit what we actually withdraw. It also has a side effect that few mention: working tends to cost far less than retirement. We have less time to spend and more time to earn and without a doubt, this will add to some of this much sought after peace-of-mind retirement all of us dream of. (This could include the access to benefits that may not be available in retirement such as health care coverage.)
If that is theory (work too long at one job, and it becomes drudgery; work at a different job with your life skills in tow reinvigorates), then what is the practice? It goes without saying but bears mention nonetheless: knowing what it cost to live now (aka a budget) can help you adjust, in real time, what retirement will be like. If you think you are saving enough, you probably aren’t. If you think you can live exactly the way you do now, you probably can’t. You are letting the dream intercede, you are shifting your shortcomings onto the process and that impacts your anticipation.
The practice is understanding what it costs now and reducing those expectations of what is available to spend by 3% each year. The practice is increasing your contribution to your retirement by 3% each year. The practice is to earn 3% more each year. The theory however is not so easy to explain. But perhaps the late Douglas Adams can. In his book “The Hitchhiker’s Guide to the Galaxy”, he writes: “There is a theory that if anyone discovers exactly what the universe is for and why it is here, it will instantly disappear and be replaced by something even more bizarrely inexplicable. There is another theory which states this has already happened.”
Related posts: