Retiring early is about embracing the unknowns
Retiring early was my dream for many years. But I didn’t get serious until 2007, when there were a lot of re-shuffles where I worked at as an engineer. And it got worse and worse as time went on.
The overall moral was very low. The work load and stress was suffocating. As a result, I started speeding up my saving and investing, and preparing for my early retirement quietly.
In the next 6 years, I paid off my mortgage, and sent my kid through college. My investment portfolio had performed very well, thanks to the recovery from the Financial Crisis.
In the spring of 2013, finally I said to myself: “That’s it. Let me get out of that place in 2 weeks.” My last day was Tuesday. Usually people choose Friday as the last day. I just couldn’t wait for one more single day. One day seemed like a long year to me.
Though I tried something new for fun later, I wouldn’t call it a serious job.
Leaving the engineering career at the age of 47 was one of the best decisions I ever made. I’m very proud of what I did. My life has been absolutely happier and healthier since then.
Did I figure out everything about retirement before giving the 2-week notice? Not really. Today, I like to share about the unknowns.
Regarding early retirement, sometimes the news media emphasized too much about obstacles. You got to factor in this, and that, etc. Many are really unknowns. Who knows what’s going to happen tomorrow, 5 years, 10 years, or 20 years down the road?
At the end, those articles scared people away. People would say: “All right, it’s too hard and complicated, and I’m not going to retire early. Okay?”
The truth is that, even if you retire at the normal age, like 65 or 67 in US, those unknowns won’t go away either. That’s just life.
Let’s take a look at some of the unknowns.
Here we go. We Americans are obsessed with health insurance, because we don’t have a good one in place.
Currently I’m on Obamacare. Am I worried if Obamacare will survive? I worried a lot in 2016 and 2017. This year, I refuse to let it bother me again.
That is not something I could change. Whatever happens tomorrow, it’s going to impact thousands of people over there. I’ll face it.
Many people don’t want to retire early because of health insurance. That’s understandable. On the other hand, the employer-sponsored health insurance is not sustainable either. Yeah, the premium is lower, because employers shoulder the big portion. But, the risks are there, too.
This is an example: what happens if John Doe (he is in his 40s) got terminal illness like stage-4 cancer? He still has to work in order to keep the insurance, right? How could a person with stage-4 cancer work like a normal person and follow the 8-5 schedule? That would be too brutal and inhuman for John.
But, if John quits the job, he would lose the insurance, unless he could get disability and get into MediCare. Disability is hard to qualify, and nothing is guaranteed.
So my point is that, employer-sponsored insurance helps when people are relatively healthy. It won’t help much in John’s situation.
Some people might keep working till 65, when MediCare kicks in. MediCare is not silver bullet either. Its coverage is limited, and could change over time, too.
Fidelity said that, “A Couple Retiring in 2018 Would Need an Estimated $280,000 to Cover Health Care Costs in Retirement”. Here they are talking about a couple retiring at 65.
If this assumption is true, how much does it cost for a couple retiring at the age of 50? It would be much higher than $280K. The numbers are so scary that it pretty much kills the retirement dreams for most of the people.
Some news media recommend people keep working to at least 67. And 70 would be ideal, in order to maximize the Social Security (SS) benefit. That’s baloney. Why? For the people over 70, how many are healthy enough to travel, and do what they love to do?
SS is a big unknown. If someone is depending on the SS as the sole retirement income, good luck. The whole SS system is just horrible.
Take my case as an example. If I keep being retired in the next 10 years, my monthly SS payment at the age of 62 will be $X (not much). In 2013, if I were to stay at the engineering job, and keep working for another 15 years at that pay level, my SS benefit at 62 would be $300 higher than the $X.
Do you see the point? By working another 15 years on that super stressful job, it would only raise my SS benefit by $300 per month, at the age of 62. Is it worth the effort? Absolutely not, from the SS benefit point of view. I would be probably stressed to death long before hitting 62.
People’s health in the future is a big unknown. Some news media say that, when planning for retirement, factor in the long-term care.
But, how? Should every retiree buy the long-term care insurance? Even with insurance, it may not cover 100% of the needs. And the insurance is very costly.
It’s one of those things you simple don’t know what’s going to happen tomorrow. I’m not going to think about the long-term care. I’ll focus on what I could do now, like trying to maintain a healthy lifestyle. For those beyond my control, I’ll let it go.
The web site TheStreet says, “Keeping Up With Retirement Planning While Caring for Aging Parents“. Wow, planning for retirement is really becoming a huge system engineering project.
Just like our health in the future is unpredictable, so is the parents’ health. In many cases, it’s like rolling the dice, and see what happens. Life is full of risks.
When planning for early retirement, I was mainly focusing on the known items. For the unknowns, can’t beat them? Just embrace them. Life is short, and enjoy it before it’s too late.
Questions to you: How do you deal with the unknowns when planning for retirement?