Had a conversation with another couple who just reached FI and were thinking about retiring. I jotted down my thoughts for them, and then decided it's worthwhile sharing with the whole community.
To anyone who has reached FI and is contemplating RE, it's worthwhile to take some time and figure out why you want to retire and what you think you will be doing in retirement, before rushing into a decision.
Important truth #1: Money can remove friction and buy a certain amount of freedom, so that you can pursue your happiness. But there is no happiness in money itself. If you don’t know where to find your happiness, having more money won’t change that.
Important truth #2: Don’t confuse happiness with recreation or entertainment. Many early retirees looked forward to pursuing their hobbies (travel, golf, pickleball, etc.) full time, but eventually realized that what made those things enjoyable in the past was the inherent scarcity. Retirement is like an endless buffet -- even if it’s full of your favorite foods, they don’t taste as good when you are eating nonstop and never feel hungry.
Important truth #3: Be productive, regardless what stage of life you are in. We are not meant to be “consumers” only. You have been working and saving money – that was the meaning of your life before, but when you no longer have to work and save money, you need to find new ways to be productive and have meaning.
My wife and I are in our early 50s. We reached FI in our mid 40s. Retiring Early sounded good to me at the time, but if I was honest to myself, I would have admitted that part of the motivation was my own vanity, i.e. being able to humble brag about it to other people. Fortunately, I received some good advices regarding those 3 Important Truths listed above, so we chose not to Retire Early but Live Early, i.e. living a lifestyle that deprioritized money, but using money as a tool to improve other areas of our lives. I stepped away from my high paying and high stress executive role and switched to a new job that’s about 30% lower pay, but 99% lower stress. On a $/hr or $/headache ratio, it’s actually a big raise. I still get to use the technical and business skills from my previous jobs, and the job still pays very well (6 figures), but knowing I can afford to walk away from this job at any moment is a liberating feeling. It actually made me a better worker – I don’t have to play any game of office politics, which endeared myself to everyone in the company. My wife had been a stay-at-home mom since the birth of our first child, so there was no change for her employment per se, except now she has more free time to do volunteer ministries. In our personal life, we were able to accomplish the following with the extra money: donating a large percentage of our income to various charities, buying a beach house and extending hospitality to our friends and family, paying the entire college tuitions of our 2 kids plus funding their Roth IRA accounts during their high school and college years, investing in our own health in terms of spending on food, exercise, nutritional supplements, and taking several longer vacations every year. With all that, our net worth still keeps growing. As of today, our net worth is 3 times as it was 10 years ago, which only provided us with more flexibility and allowed us to be even more generous. Looking back, if we just stopped working completely, we would have been at a loss of finding meaningful and productive things to do, and we probably would have to be much more careful with our spendings and would not have been able to afford all those things especially the generosity toward others.
In summary, I would recommend that anyone who is at or close to FI keep their options open. Instead of immediately retiring from work, they can gradually climb down the corporate ladder while using the freedom from FI to investigate and try out different things to do in their new chapter of life, while enjoying life richly and giving back to the community and blessing others with their good fortune.
