Many workers reach middle age feeling burned out by the daily grind, and they fantasize about chucking it all and retiring at an early age. The trouble is, for most people, it’s a significant challenge to develop sufficient financial resources to support themselves for decades without any income from working.
Let’s see how you can turn your retirement fantasies into reality with a few creative strategies that apply design principles.
What Advantages Could You Gain By Retiring?
While at the Stanford Center on Longevity, I met Bernard Roth, one of the founders of the Stanford Institute of Design, a.k.a. the d.school. He recommends that when you have a goal that’s difficult to achieve, you write down the advantages you’ll realize if you could attain that goal. Then, brainstorm alternative solutions that will help you gain these advantages without exactly attaining your original goal. Roth wrote a great book about these ideas, titled The Achievement Habit: Stop Wishing, Start Doing, and Take Command of Your Life.
Let’s apply Roth’s concept to your wish to retire. Suppose you want to retire at age 50 to have more time to pursue your interests or to travel. A lack of free time is a common frustration with burned-out workers. But can you find more time to enjoy life while you’re still working?
One alternative solution to retiring completely is to work part time. Let’s look at how the part-time math can help give you more time to pursue your personal interests. Suppose you’re currently working five days per week. Typically, you’d spend one of your two weekend days doing chores, shopping, and pursuing other necessary activities to support your daily life. This leaves just one day to pursue your interests.
Now suppose you reduce your work week to four days. By doing that, you’ll double the number of days you have for your own interests. Further reduce your work week to just three days, and you’ve tripled your personal time.
Now let’s suppose you want to have more time to travel. You could enjoy longer vacations by using more days off than your employer’s allotment for paid vacation, in essence taking unpaid leave. If your employer experiences slow times during the year, taking unpaid leave could be a win-win for both you and your employer.
Both these solutions would reduce your current income, which could be another advantage for your ultimate retirement: By working fewer days now, you’ll learn to live on less income, which is inevitable when you retire. Before implementing either of these ideas, be sure you take the time to understand the financial impact working less would have on your health care plan.
Bridges To Full Retirement
If you’ve been thinking you need to have enough savings at age 50 to support yourself for the rest of your life, you don’t. Instead, you could consider part-time work as a bridge to your full-time retirement. You could work just enough to cover your living expenses and let your savings and Social Security grow until they are sufficient to support a full-time retirement.
Another possibility is working until you’ve maxed the value of your Social Security benefits, which can be age 70 for many workers. You may need to work with a financial advisor to help estimate when your savings have grown sufficiently for you to retire completely and to determine the optimum age to start your Social Security benefits.
Another “retirement bridge” possibility for middle-aged parents is to use the extra time they have after their kids move out of the house to pursue their own interests. Determine when that will be and how you can bridge the time gap until then.
Can You Still Enjoy Life If You’re Spending Less Money?
Inherent in the above strategies are finding creative ways to balance the common-sense formula for retirement security: I > E, or income must be greater than living expenses. As a result, significantly reducing your living expenses now can be an effective part of your plan to retire early.
One expense-lowering possibility is to move to a lower-cost area with near-by recreational possibilities that you want to pursue in retirement. Remote, part-time work could help deliver the income you still need after you move. Another possibility is to find part-time work that involves your interests. For example, you could work at a sporting goods store; a ski, bike, or scuba shop; a local travel agency, or a bookstore.
All these ideas are consistent with the FIRE movement (financial independence, retire early), which emphasizes making more conscious choices with your work and personal spending.
Hopefully by now you get the picture. If you look for creative ways to reduce your work stress that also give you more time to enjoy life, you could still feel as if you’ve retired.