Taking Account

I see that some celebrities have been struggling with FIRE this week. Ryan Giggs was quoted as saying, “Retirement is a big problem. I lost the energy I had and I needed other projects. People say “You have earned your money”. But money has nothing to do with it. You have still got a life to live.”

Then up stepped poor old Fred Goodwin, Billy No Mates. Well, he has one mate, who admitted to the press this week that Fred’s enforced retirement was leaving him “intellectually under-occupied”. (It seems to me that Fred didn’t do too well either when he was intellectually over-occupied at RBS.)

I mentally file away such comments. Having just returned from three weeks holiday to work, I walked into my dull little office while the sun beamed down outside to find the same pile of problems, issues and unresolved small conflicts that had been there when I left. Nobody, as ever, had tackled any of them in my absence, booting them into the long grass for my return. Deep sigh. But, as I pulled a chair up to my desk and turned on my PC, I mused, “You know, I could walk into the boss’s office right now and tell him I was off. Like right now, today. What could he do about it?” With that thought in mind, I was more able to face the day ahead. I was choosing to do this job, and I can thank FIRE for that.

Work versus Retirement. It’s all in the mind. Psychologically, you have to be ready for both. I thought I was ready for retirement and that I’d had my fill of the office, but that turned out not to be the case. It was a shock to me when I quit the workplace when I found that I could be on a bigger downer facing an empty day at home than I’d ever been at work, but it was a fact. This was largely because when I had an empty day in my “retirement” I’d give myself a hard time about it, feeling that I was failing, that I was doing nothing constructive, that I was fading from view, becoming inconsequential and achieving nothing. It really wasn’t fun. Work can be a lot of things, or at least the type of work I do can be, but the days are very seldom “empty”. And I always end the day feeling that I’ve accomplished something, even if it was just turning up. A lot of people don’t even achieve that.

Another psychological facet of work versus retirement is the financial one. I refrain from going into detail about my finances on this blog, but I will state that my retirement financial goal was to have the same net monthly income in retirement that I’d had when I was at my “peak” earning power. I felt if I could manage that, I’d be sorted. When I hit fifty and found my career at an end, a substantial “good leaver” package from my firm helped me achieve the goal I’d set myself. Or at least that’s what my spreadsheet forecasts indicated. Given that I no longer had to salt away a big part of my salary toward my retirement goal, my net income in not working was exactly the same as the net income I had previously received in pay. Nice one.

But in realising this goal, I had now to actually realise it. Every month I had to cash in investments equal to the amount my firm used to pay me. I didn’t have to “pay myself” this way, but that was the way I preferred to do it. At first, I got a big kick out of doing this, but it soon wore off. In fact, I came to dread “pay day”.  I’m just not a spender, I’m a saver, and the retirement role reversal was just so hard to take. I felt I was the type of person who didn’t reduce savings, I built them up! It was actually nothing to do with the amount of money that I had to withdraw because I felt I was “safe enough” in that regard. It was more the action of making the withdrawal with no proactive plan for the cash other than paying living expenses which was an existential shock to me.

Now that I’ve returned to work, I tell myself I’m spending every penny I earn because I deliberately don’t save any of my current salary, even the bit that I could afford to. I’m not depleting my investments, but I’m not adding to them either. I’m a lot more comfortable with this situation. I feel it’s a bit of a halfway house between the sublime (saving a load of my cash) and the ridiculous (spending a load of my cash).

I still have days at work when I ask myself if I’m ready to retire again? But the intellectual and social stimulation work brings, plus the cream on the cake of being financially compensated for it means that I’m just not ready for the retired life yet. When will I be? No idea. But I’ll let you know when it happens.

4 thoughts on “Taking Account

  1. Another good post SHMD. Not many bloggers touch on the psychological aspects of FI(RE), especially the US ones where everything is “Awesome!” (Living AFI was an exception, but he doesn’t post much now)

    That was/is an amazing financial goal you achieved. i just had a quick look and at mid-50s now I’d have to work until at least 67 to retire on my current net salary. That’s just not going to happen. Fortunately I only need 33% of that amount so escape is a lot closer than that 🙂


    • Thanks SSM. I was lucky in that I was well paid in my career, but never lived up to the earnings. I banked them, mostly, even before I’d heard of FIRE. It got to the point that I almost enjoyed “depriving” myself of the bigger car, house etc. I splashed on holidays, which now I see are “experiences” and therefore an acceptable use of cash. Once I belatedly realised I could retire early, I was pretty shocked – but in a very nice way!


  2. As Alan Partridge said, ‘Evolution not revolution, I evolve but I don’t revolve..’
    You just need to dial up the flexibility and dial back the hours with work over time.
    And in future ditch the ‘payday’ approach and try something else, like a bucket of two years living costs?
    And as for spending every penny of the current income – that doesn’t really make any sense either. Spend what you need/want to spend, not an arbitrary amount someone has seen fit to pay you?
    You could implement the bucket approach now if you fancied giving it a try?


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