By Billy and Akaisha Kaderli,
Special to FindependenceDay.com
At the age of 62, we are beginning our 25th year of financial independence. That is quite a feat!
From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand we have travelled extensively through these decades, and what a ride it’s been!
Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious but we’re not letting up. We still climb into the backs of pickup trucks, ride the chicken buses and soak in volcanic hot pools. The time has passed quickly from when we were the youngest, grayless couple in a group of retirees, to now where we blend in with the retiree crowd.
Still, no one can take away the dance we danced and we are filled with gratitude for all the miles and smiles.
You can do it too!
How do you want to live the next five, ten, twenty years or more? Only you can decide what is best on your path and how to get to your goal.
We were often told retiring early couldn’t be done successfully and that we would fail. These self-supported 24 years have proven the naysayers wrong, and we believe that since we have done it, you can too. In our books and on our website we share the tools we have used to get us here so that you, too, can create your own successful retirement, early or not.
We maintain that one must keep one’s dreams alive. No one will do it for you. Besides, it’s much more fun to be led by one’s dreams instead of being pushed by one’s problems.
No matter where you are on your path to Retirement (Findependence?), here are some time-tested tools we have used. Take advantage of what we know.
This is basic and oh-so-essential. When you track what you are spending you know exactly where your money is going and you are able to make decisions clearly and in real time about your cash outlay. This one habit will change your financial life.
Manage cost per day and annual net spending
Once you track your spending, you are able to figure out the yearly amount of money you are devoting to live the lifestyle you are currently enjoying. Divide your yearly amount by 365 days a year and you have your Cost per Day. Manage these figures assertively and you will be in control of your money. We have been retired for a full 24 years (beginning our 25th year January 14, 2015) and our annual spending for these years has been well under $30K per year.
4 categories of spending
In any household, there are four major spending categories: housing, transportation, taxes and food. If you make adjustments here – and there are lots of ways to do so – you are on your way to financial independence. Open yourself up to options such as house sitting, moving to a less costly area to live, paring down the number of vehicles you own, and being aware of your entertainment outlays.
Positive attitude and mental flexibility
Some people think having a positive and flexible mental attitude is small stuff and inconsequential. But without a sense of wonder, an open mind to new things and even to Change itself, making the transition into a satisfying new life of retirement is more difficult. There are so many opportunities and different ways to live, travel and experience life! Why get in your own way? Embrace your retirement and get a mitt and get in the game!
So, as we begin our 25th year we encourage you to dust off that dream and create a clear vision. Strengthen your will to move into your new life and put your solid financial plan into action. If you do these simple things, you, too, can live the life of your dreams.
Editor’s note: On the date of our retirement, January 14, 1991, the S&P 500 was at 312.49. It has averaged better than 8% yearly plus dividends over these decades. Our average annual spending is well below $30K yearly.
About the Authors
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance and world travel. With the wealth of information they share on their popular website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible.
Unretirement is a concept not unlike Findependence or Financial Independence; it’s also the title of a recently published book by Chris Farrell, Bloomberg Businessweek columnist and senior economics contributor for American Public Media’s syndicated radio show, Marketplace.
I’ve also seen the term Unretirement used by Sun Life Financial in Canada but that seems to be more a marketing term the company uses to promote its surveys on traditional retirement. That survey has been going for six years now, which certainly predates the publication of Farrell’s Unretirement (it was published in 2014 by New York-based Bloomsbury Publishing plc).
The theme of the book is encapsulated in the title of the opening chapter: Work Long and Prosper. As we’ve noted in the Aging & Longevity section of our sister site, the Financial Independence Hub, advances in life expectancy suggests the Baby Boomers and succeeding generations may work long past the traditional retirement age of 65.
True, many boomers may no longer be employed by giant corporations — either because they choose to leave or are involuntarily parted from such employment — but Farrell sees most of them becoming free agents of some sort: finding new “encore” careers, starting new businesses or contracting their services back to former employers while adding other clients, volunteering and philanthropy, among other activities.
Five pitfalls related to Longevity Read more
The other day I ordered online a library book published in 2013, which I thought was entitled 65 Things to do When You Retire. But once it arrived and I started to leaf through the pages, I realized with some disappointment that this particular edition of what was evidently a series was dedicated solely to travel, as you can see in the prominently featured word in red on the cover image to the left.
Now I know travel is regarded as one of the bedrock activities of retirement, if not the holy grail itself — provided you’re physically and mentally healthy, financially equipped to bear the costs, and young enough to enjoy it.
A curmudgeon’s view: Travel is expensive and over-rated
Personally, though, I have until recently regarded travel as expensive and over-rated. When I expressed this sentiment to my uncomprehending wife, I would go further by quoting the French philosopher, Montaigne: “The traveller takes himself wherever he goes.” Meaning that you may be able to leave your daily routine at home and at work, but just because your physical body has been removed to some exotic location half way around the world doesn’t mean you will escape your relationships, responsibilities and whatever problems tend to vex you at home.
Clearly, given my somewhat contrarian attitude to travel, I should have picked up the previous book in the series: 65 Things to Do When You Retire, (the volume that does not append the word Travel but instead carries the subtitle 65 Notable Achievers on How to Make the Most of The Rest of Your Life). Judging by online snippets I researched for this blog, this earlier volume was aimed at baby boomers trying to figure out what to do with the rest of their lives once it was no longer necessary (or possible) to commute to a cubicle or office every day. And of course, in last week’s blog about the Boomertirement salon, that was exactly what a group of ten 60-ish boomers were discussing. After all, in America, 10,000 boomers will be turning 65 every day until the year 2030, or so the original volume of 65 Things says.
There was a bit of talk in our session about Travel, but it certainly didn’t dominate the discussion. And yet, in a chapter entitled “Is Travelling Really the Retirement Dream?” RetireHappy.ca blogger Jim Yih said that when he holds retirement workshops, the most common response to the question of what people want to do when they retire is indeed travel. This is cited by more than half the participants.
Yih does introduce an apt term: retirement pornography. He says that those who haven’t really thought much about what they’ll do once they retire tend to go with the easy, automatic answer of “Travel.” Society seems to have planted the idea into our collective heads as something we are supposed to do in order to have a successful life after work. But Yih also nails it when he observes that “travelling is an activity you do some of the time, but rarely is it something you do most of the time.” (his emphasis).
Not that the second volume didn’t attempt to excite me about travel. The anthology begins with best-selling author Ernie Zelinski, author of The Joy of Not Working and How to Retire Happy, Wild and Free, both of which I enjoyed when they were published. I probably reviewed them too, and favorably. The headline the anthology editors placed over Ernie’s essay was certainly tantalizing: Retirement Travel Will Renew Your Sense of Excitement About the World (And Invigorate You at the Same Time).
Embracing the unknown, rather than certainty
“Maybe I’ve been too harsh about travel,” I said to myself, settling in as Ernie told me the “retirement life truly worth living” is out there in the unknown, not in the village of certainty and safety. One suggestion is to visit all 50 of America’s states, which exhausts me just thinking about it. Sleep under the stars? Well, that could be done in the back yard, but we’re later told we should “leave your city once a month” and “leave your country once a year.”
Seems to me both those suggestions can be implemented by ordinary working people on weekends (to leave the city) and on their annual vacations.
Perhaps the problem is, as Frank N Furter said in the cult classic film, The Rocky Horror Picture Show, “It’s not easy having a good time.” Zelinski’s suggestion of a working vacation makes more sense to me, as does an entire group of essays on Voluntourism (combining travel with volunteering). I’m all for killing several birds with one stone and if you can combine travel with a research project, philanthropy and a bit of work, then no doubt I will take it more seriously if and when I reach the stage of Full-stop retirement.
But like the members of the salon, in this prior stage of Findependence, Travel remains low on my personal list of priorities.
A big aspect of planning for retirement is health and longevity. Earlier this summer, I devoted a blog to Mark Venning of ChangeRangers.com. Venning helps clients prepare for two things: making the shift from employment to entrepreneurship, and also to help prepare for a future of extended longevity and life expectancy. That’s “why the word ‘Retirement’ doesn’t work for me. It’s about longevity planning,” he told me, “My core message is plan for your longevity, not for retirement.”
One of several book recommendations from Venning to his students is a book by Lynda Gratton called The Shift: The future of work is already here. It’s not brand new: my copy was published by Harper Collins in 2011. But it’s still relevant, especially to the generation of baby boomers, myself and Venning included, who are grappling with the issues of retirement planning.
Gratton, who is a business school professor, identifies five forces that are shaping the world of work, plus three “shifts.” They’re all worth summarizing here.
The 5 forces shaping our future
3.) Demography and Longevity
5.) Energy Resources
The 3 shifts
1.) From shallow generalist to serial master
2.) From isolated competitor to innovative connector
3.) From voracious consumer to impassioned producer
For baby boomers and others who are nearing retirement, or moving into semi-retirement or self-employment, almost all of these forces and shifts need to be taken into consideration. In earlier blogs like this one — Never Work Again — we looked at the revolution in Internet marketing, which is based on both the Technology force and Globalization. When you can run a web-based business from anywhere in the world merely with a laptop computer and a smartphone, you know you’re embracing these forces.
Gratton’s points on demography and longevity seem particularly apt: this was the topic that most fascinated the team of researchers she tapped into for the book. “We quickly understood that technology is changing everything and will continue to do so, and that natural resources are depleted and carbon footprints must be reduced,” she writes. But demography and longevity “is intimately about us, our friends and our children … It’s about how many people are working, and for how long.”
The dark side: some boomers will grow old poor
In 2010, when Gratton was writing the book, there were four distinct generations in the workforce: the Boomers’ parents, the Boomers, Gen X (born between 1969 and 1979) and Gen Y (1980 to 1995). And coming up is Gen Z, born after 1995. Gen Y will be ascendent in the workplace by 2025 but increasing longevity means the Boomers and Gen X will still be hanging around, wanting to work and contribute in some capacity well into their 60s, if not beyond. Gratton also warns that “some baby boomers will grow old poor,” particularly if they don’t respond to the gift of extended longevity by embracing the forces and shifts that are confronting them.
Because of globalization and technology, the privilege of being born in North America may no longer be sufficient advantage for those who don’t embrace The Shift. Books like The Laptop Millionaire describe how those with wealth can take advantage of outsourcing: for example, hiring English-speaking Filipinos as full-time virtual assistants for something like $250 or $300/month. There is a dark side to these shifts: those not equipped to embrace change increasingly will have to compete for jobs or contracts with people half a world away who are technologically sophisticated and willing and able to work for much less than North Americans.
Gratton devotes big chunks of the book to fictional scenarios of the near future of work, some of them pessimistic, some of them optimistic. All in all, it’s well worth reading. It reinforced my own belief that “If you’re not sure whether you should retire or can afford to do so, then just keep working, preferably in a congenial line of work you can continue to practice well into your 70s.”
Here is my latest MoneySense blog on Financial Independence.
For convenience and archival purposes, I’ve entered a version below:
I’ve always had ambivalent feelings about the expression “sandwich generation,” which was in the news again last week when BMO Nesbitt Burns put out its latest “retirement readiness” study.
The headline number was that those caught between child-rearing and eldercare will be short more than half a million dollars for their own retirement. Defining this generation as those between the ages of 45 and 64, it said this cohort believes they need $818,000 on average for retirement but to date most have saved on average just $258,000.
Why my ambivalence? On the plus side, the sandwich generation always makes for good copy. In fact, the never-published fifth issue of the old Wealthy Boomer magazine I used to be associated with featured just such an anguished baby boomer couple on the cover, complete with squalling kids and ailing parents.
‘Twas ever thus?
On the other hand, I can’t help thinking “Hasn’t EVERY generation” been a sandwich generation? Didn’t the parents of the baby boomers have to raise us and worry also about THEIR aging parents? And didn’t their grandparents go through the same thing, and so on throughout all recorded time?
Ah but the baby boomers are special, aren’t they? Everything we touch becomes a trend and any asset class we embrace soon becomes overheated. Housing in the 1980s. Tech stocks in 2000. Soon perhaps a rush for vacation properties and retirement homes.
I accept the argument that the boomers have been blessed by extended longevity and generally robust health and new medical breakthroughs. Even so, I don’t see why an extra ten years of life expectancy makes the current crop of Sandwichees more special then previous generations. Arguably, the previous generation married earlier than the boomers. I’d even make the case that the boomers generally married and started forming families roughly ten years later than their parents did: say on average at age 29 instead of 19. Let’s also assume that we have ten years more life expectancy. Seems almost a wash, except that we have kids when we’re older. The old folks will pass away at their appointed time, regardless of when we decide to start replacing them with their grandchildren.
In my case, I’m particularly fond of a photograph of my own father taken with our daughter as a youngster. Perhaps Dad was in his mid 80s at the time (he’d be 100 this year had he lived that long) and Daughter was maybe three. In effect, neither of them as photographed there is here any longer. I couldn’t find that photo but the one above shows my late father-in-law and mother-in-law, holding my daughter and one of her two cousins, taken about 20 years ago. Literally, “grandchildren on your knee,” as per the line from the Beatles’ When I’m 64.
The young girls are now young women. The point is that period was a fleeting one and so too was the period of being “sandwiched.”
This phase too will pass
The kids soon grow up and the parents die: all four of our precious elders in our own case. Because we delayed things like so many boomers did, the grandparents weren’t around to see things like college graduation or marriage for their grandchildren. But with their passing comes inheritances (often), which in turn can help pay for the kids’ university educations. The one “problem” (eldercare) eventually resolves itself and helps fix the other sandwich “problem” of the cost of university.
I’ve always loved Emerson’s essay, Compensation. If you’re still a boomer sandwiched between the generations, count your blessings and read that essay. Here’s a passage I underlined long ago: “For every thing you have missed, you have gained something else; and for every thing you gain, you lose something.”
The compensations of being sandwiched
To those still sandwiched, I’d say enjoy this brief time where you bridge three generations. Soon it will be gone and you’ll have plenty of time to pad your retirement savings, especially with extended life expectancy. Take it from me: working a few extra years is no tragedy. Emerson might even view it as a blessing.
As I noted in a recent MoneySense blog, age 62 seems to be the magic age for some prominent Canadian members of the financial industry (banking and pensions respectively) to “retire.” Of course, we prefer to say they’ve reached their “Findependence Day,” since I doubt either BMO’s outgoing chief economist, Sherry Cooper, or Mercer partner and actuary Malcolm Hamilton, will be moving from full-time employment to full-stop traditional retirement.
As I say at the bottom of the blog, more boomers are leaving center stage but I expect many will linger in the theatre for some time yet, whether they embark on writing, public speaking, consulting or shift more to volunteering and charitable work.
So is 62 a “good” age to declare one’s Findependence? As always, comments welcome below.
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On Wednesday my Wealthy Boomer blog focused on a new book by Lisa Orrell, Boomers for Business. Its theme is all about what a boomer friend of mine, Norman Evans, has long predicted: that it’s time the boomers got paid for what they know, not what they do.
I was pleasantly surprised to see that Lisa mentioned my own book today on her Facebook page. She says this:
It’s a love story, a novel, that is actually a financial planning & education book that follows a couple’s ups & downs with their money struggles and what they learned to be better off financially
Here is the full post.
— 61 –