Two articles with entirely different viewpoints on when and how to retire. The first one from the WSJ is about people taking intermediate length, six to 12 months I'd guess, sabbaticals every so often without prioritizing the potential consequences for retirement planning. A reader left the link to this article and then of course later on Wednesday, I saw it shared elsewhere a half dozen times. So, it's a hot topic.
Think about it, if you quit to take six months to do some huge life experience and then try to go back to the work force in the same capacity and commensurate pay then at the very least you're disrupting your retirement savings flow.
The idea of not waiting until "retirement age" to....describe it however your want....own your own time, do a couple of adventurous things will appeal to most people. Optimizing quality of life and retirement planning are conflicting ideas that need to be reconciled in order to succeed.
Wanting to enjoy the ride or live in the present are valid aspirations. That is offset by the need to do favors for our future selves like having at least some savings, maintaining at least decent fitness and health as well as staying connected (vague reference that takes in many aspects of successful aging). Those two can be at odds so a balance needs to be struck.
With anything we do in life there will be tradeoffs. To the WSJ article, if quit your job to take six months off to hike the Pacific Coast Trail and then try to reenter the job market, the tradeoffs might be getting a similar but lower paying job to start, not being able to get back into your previous field and having to start with a drastically lower paying job, the interruption in your retirement savings could have a future impact on what you have when you actually retire.
If there are tradeoffs, that means something will not be optimized. If you don't really enjoy what you do and you don't venture out on some sort of sabbatical or adventure then you're not optimizing your potential for joy when you're young. If you check out of the work force regularly along the way then your not optimizing your retirement savings. Can you figure out a long term balance to hit all the things that matter to you?
I have several Facebook friends who still work at Charles Schwab from when I was there in the 90's. Being there that long appears to allow them one month sabbaticals kind of frequently. While the idea of punching a clock that way for all these years since I got laid off in 2001 (best thing to ever happen to me professionally) would be depressing as hell, it is important to understand we are all wired differently. I could see where the occasional one month sabbatical could be the answer for people.
It's not for me to say what the right thing for other people to do is but I will say feeling like you struck the right balance for yourself does require self-awareness to understand personal priorities. Your priorities are not my priorities which are not the other guy's priorities. Hopefully everyone can figure this out for themselves, understand how they want to live, then understand the tradeoffs and be prepared for potential consequences.
Let's say you're making a lot of money, you've socked a lot away for retirement and at 50 you see one of those commercials for Army Civilian Careers and you decide you want to change everything to be a heavy equipment operator in Alaska for 1/4 of the pay. We've talked about this sort of example many times. At some age you decide you want to do something completely different, do you have the financial flexibility to do it by virtue of smart financial and lifestyle decisions? This 50 year old we're talking could easily have enough accumulated to take a severe pay cut, still making enough to pay the bills but not save any more for retirement. That seems like a pretty good outcome. This is referred to as coast FIRE, being able to get by without needing to add to saving and without needing to pull from savings. This scenario is not optimizing savings but so what, maybe that wasn't their priority.
This all contrasts with an article about financial advisors that ThinkAdvisor says are afraid to retire. The fear isolated in the article was not so much about lack of financial ability to retire but about identity. This will be harsh but we all know people whose only dimension is their career, it's all they have.
Saying this as someone who loves what he does, being one-dimensional is not a good way to go through life. Aside from varied interests making life more consequential, problem solving and challenges in one area of interest can help with problem solving and challenges in another area of interest....the more important area of interest perhaps. My day job is my most important area of interest (family and health are not areas of interest, that's different) but I can't count the number of times where fire department stuff has helped with something in my day job.
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