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« Soundtrack for the Boomers' Coming-of-Age | Main | Are We Normal? (with our money) »
Monday
Jun092008

Early Retirement?

There is a movement abroad in the land!  It is still necessarily small, and the current economic environment is unlikely to strengthen it; but it is still there, in its infancy.  There are already a number of web sites where its devotees can share ideas and opinions, and there are already a certain number of icons of the movement.  I am referring of course, to the movement toward "early retirement."  I am not sure at what age retirement can be termed "early;"  I don't think that age is definitely defined even within the movement; one man's early retirement is another's late retirement.  Generally though, anything under age 65 will be considered early by someone, and according to some of the web sites I have visited, many are now retiring in their 40's.  There is even a small segment of retirees in their 30's.  Granted, most of these 30 somethings have benefited from either inherited money or business startups (i. e., "dotcoms") that they have sold,  but this does not described all of them.  Some are rather ordinary people who have simply chosen an extra-ordinary lifestyle!

 

Billy and Akaisha Kaderli are the grand Poobahs of the extreme early retirement movement.  About the time they turned 38, they decided that they did not want to work any longer, pay any more taxes than absolutely necessary, and do some things they had always wanted to do while still young.  So, they sold their house and successful restaurant, and Billy resigned his job with Dean Witter.  They tallied up their cash and it came to around $500,000.  In 1991, they began their great, extreme early retirement adventure.  Initially, they moved to Nevis, a small Caribbean island where they lived for six months.  After that they spent about a year seeing South American before moving back to the western US and buying an RV.  They spent some time touring the US in their RV, and then it was off to Mexico.  Since then they have spent time in Venezuela, Canada, and several countries in Asia and the Far East.  For the first several years of their retirement they averaged spending no more that $24,000 per year.  They were quite simply frugal.  They always ate well, but chose activities (hiking, biking, swimming, etc.) that were inexpensive while enjoying all of those exotic locales.  They are now in their mid-fifties and own homes in Thailand and Arizona.  They have written books and produced videos about their lives.  Their retirement fund is larger than the $500,000 they had at retirement because they avoided being scared out of the market during the meltdown in 2001 and 2002, and they have withdrawn only 3% per year.  Now, of course, they make some money from their books and videos, as well as their web site, www.retireearlylifestyle.com.  They have no children, (I daresay their lifestyle would be very different if they did) and thus, no college costs to contemplate.  They offer the following advice for the aspiring early retiree:

  • Simplify - - a complicated lifestyle costs more

  • Look outside the borders - - an attractive and less expensive lifestyle may be had in other countries

  • Track expenses - - and determine where to cut.  This is your life now; you are not on vacation!

  • Learn to enjoy low cost entertainment - - biking, hiking, reading; golf is not a good candidate!

The Kaderli's story is certainly unique; they have surely done it their way.  But their way is certainly not for everyone; probably not for many.  But let's do some daydreaming (daydreaming about retirement is one of my favorite pastimes) and assume we want to "retire early."  Can we determine if we are good candidates for this pursuit?  I think we can if we carefully analyze ourselves and our finances.

 

First we have to determine if we are ready for retirement psychologically.  If you find no joy at your job; if you spend most of your time at work in a state of frustration; if you seem to be continually angry at and short with your co-workers, you may be getting close to either 1) getting fired, or 2) mentally ready for retirement.  Successful pre-retirees will also have an action plan for all of the new free time they will have once in retirement.  Life in front of the tv with a bag of oreos is not reputed to be all that much fun.  Make sure you have some concrete plans for your retirement years.

 

Next comes the part that foils so many early retirees' plans, the financial aspect.  Prior to jumping into retirement, one must carefully spend some time determining that they will have the financial wherewithal to afford the rest of their non-working, or part-time working lives.  And most experts recommend that today's retirees should allow for a lifespan of 95 years, just to be sure you run out of years prior to running out of money.  I would suggest consulting a trusted financial advisor to help make such projections and include the the effects of expected inflation, unless you are very familiar with such computations.  You could also read my article, Number, Number, Wherefore Art Thou? linked in the column at right.

 

More information for those aspiring to early retirement can be found at www.earlyretirementextreme.com.  This guy is almost militant in his commitment to early retirement and the lifestyle necessary to afford it.  He is not part of the idle rich, and his ideas and suggestions will not be mistaken for those of the faint of heart.  Visit with eyes wide open; rated PG for extreme!

 

Retireearlyhomepage.com is a fascinating forum with lively discussion and debate on all topics related to early retirement.  I can spend long episodes here when I loose track of time following the threads that are debated.  Check it out! 

 

One of the best articles I have found on early retirement planning is Dare to Retire Before 50, at bankrate.com.  It will ask and answer a host of questions for anyone who may be contemplating early retirement.

 

I have concluded, after reading all of these various sources and about a dozen books, that I must not yet be quite ready for retirement.  In spite of all of the obvious challenges to the airline business, I still enjoy it immensely.  I know that the finish line is in sight for me, but for right now, I will continue to get up in the morning excited about strapping on an airplane and going somewhere!  It is still fun in spite of the lousy hotels, airport food, and disgruntled passengers.  There is nothing quite like the Grand Canyon on a sunny day from FL 350, or St. Lucia's Pitons as you pass by on your way to Barbados, or the awesome display of a 50,000 foot thunderstorm slinging lightening around a darkening sky.  This life has afforded me, a poor farm kid, the opportunity to see much of the world, from Ayers Rock of Australia, to the Sistine Chapel in Rome, to Bangkok, Thailand.  Of course, I look forward to spending more time at home with my "Snuggle Bunny" and the rest of my wonderful family (especially my grandsons), but oh, I will miss so much of this life.  If you are a pilot, you know what I mean!

 

 

 

Fly/Drive Safely

9 June 2008

 

 

 

 

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