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My View Of Early Retirement

This post was written by reader Daniel A as part of our retirement series.

Early retirement had always been a lifelong goal for me.

Having worked for nearly forty years with only a four month break between jobs, and watching many friends in-and-out of work, I was fortunate to have a steady job that allowed me to plan for the future.

Yes, they may have had different opportunities along the way, plus some down time between jobs, something that was never part of my life.

Related: Have You Made Your Retirement Plans?

I watched many people over the years who seemed to take charge of their lives in retirement, and that was what I wanted.

My working years

I stayed with a company for thirty plus years because the pension was good, as were the benefits.

I lived most of my life by a calendar – having worked shift-work almost from day one – so having control in my life was important.

With a defined benefit pension in front of me, I considered the best time for early retirement was between the ages of 55 and 58 – given the stress of shift work – with a drop dead date of 60.

From what I knew of retirement pensions, 20 years was the minimum for the defined benefit to pay off.  At 25 years it became good, and at 30 years it was a real gift.

Related: Are Gold Plated Pensions A Thing Of The Past?

I received a buyout offer only once, in the early 1980s, but another came along in 2008.  I thought, “Show me where to sign!” even though it was two years earlier than a commitment needed to be made.

I signed on for the early buyout.  I knew my tax rate would drop, with no CPP or EI deductions or union dues coming off my cheque.

I would finally be in charge of my future; no more night work or meetings to attend.

That was three years ago and I don’t regret the choice I made.

Early Retirement

Since then, I’ve had opportunities to work part-time but I’m busy with hobbies and no longer want to be tied down to a calendar.

My wife still works, which has been somewhat of an issue, but her goals were different than mine.

Related: The Stage Of Life Formerly Known As Retirement

There’s bound to be problems when one spouse retires and the other is still working.

Our solution was to move closer to my wife’s place of work, which saves her two hours of commuting.  We downsized and now live less than ten minutes away from her job.

I have hobbies that keep me busy, something everyone should have.

I’ve read more books since retiring than at any time before – an average of one per week – and started buying them second-hand to save money.

I bought a travel trailer fiberglass that I call my man cave; it has everything I need for road trips.

Having a bigger house made it easy to accumulate stuff.  Even my wife today sees there is too much stuff and thinks about why she bought so much.

I’ve explained to my wife that I have no need for $100 shirts or pants.  Life can be simple.

Related: Our Retirement Philosophy – Lock It Away Until We Need It

My kids still cost me, but in a measured way.  They want to make their own way in life and only come to me when needed.

One has started attending trade school, which my wife and I support, and we’re paying the bill.

I’m sure grandchildren will enter the picture at some point, but I have a plan for that.  Show them the world, spend time in my man cave, fly them to Mexico to visit, and be caring.

Winters in Mexico

I spend winters in Baja, Mexico with no need to look at the forecast – just easy living.

I subsidize my life with the buyout money in my RRSP and I’ll need to decide at what point to take CPP.

For now I am thinking of taking CPP early as it will pay my rent in Mexico.

A couple can live well in Mexico for around $2,000 per month, even in the Baja which is more expensive.

Friends of ours rent a full house off the grid overlooking the beach, a great house for $500 per month.

Related: How This Couple Spends Their Retirement Travelling

The interesting thing about Mexico is when one goes shopping everything is fresh and there’s very little in the way of frozen food.

It’s just twenty minutes to the airport.  I did not have travel insurance last winter but I will for the next trip since I’ll be going for six months.

I dreamed of spending winters somewhere warm every day I worked and now I live it.

I may decide to travel somewhere else for a change in future.  There are many places that interest me.

Getting out of the Rat Race

I’ve known many people over the years, who’ve retired long before me, and they’ve all said to get out of the rat race while you can.  Even delaying retirement by five years is too long.

Recently I spoke to a man who worked until 65 – he is 70 now – and he was just two years into retirement when health issues surfaced for both him and his wife.

The last three years have been hard on him; recently his wife was diagnosed with lung cancer and he is left to wonder.

All he could do was point out that they could have retired five years earlier but thought they were in good health.  He is not the first retiree to mention this to me.

Related: How My Retirement Plans Got Derailed

The most difficult issue for many people I’ve met over the years is they thought they would be millionaires by the time they were forty or fifty.  This is only a dream for most of us.  The average working person depends on either a company pension or savings.

My early retirement goal was in fact life long, not something I considered five or ten years before.

Final thoughts on Early Retirement

Today, I rarely look at a calendar even though I lived by one for close to 40 years.

When I first retired I thought about working part-time, as many do.  It just doesn’t suit me and I have no interest in working any longer.

I’ve woken up to an alarm clock no more than a half dozen times since retiring.

I don’t plan my days or weeks, there’s no need for such things.

Related: The Effect Of Serendipity On Retirement

The first year after retiring was an odd sort of feeling, like I had one foot in and one foot out.  I still related to work but was living a different life.

This feeling has passed.

In the mid-seventies I traveled to motorcycle rallies and met many people who owned their own businesses.  They spent the warm months travelling, leaving their business in the hands of managers while they enjoyed motorcycle rallies.

I guess this was the catalyst for me, the ideal life, something I wanted that helped determine my direction.

I’ve read many books on retirement and many fail to mention the emotional issues, which I think most of us want to hear about.

Retirement is a big deal!

We don’t get younger, only smarter, and we have our own life journey to guide us.

I live on less than 50 percent of what I earned when I was working, and I’m having a good time.

Anyone open to change (plus adventure!) can have the same quality of life in retirement.  We really don’t need to be locked in to our work lives.

Pull the pin and give it a shot.

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16 Comments

  1. Jane Savers @ Solving The Money Puzzle on June 14, 2013 at 4:06 am

    I want to retire at 60 because people in my family have good health in their 60s and fall apart quickly in their 70s even though they live sensible lives.

    I would go earlier but I got such a late start saving that I am stuck with 60. I will have to live simply – no second hand books for me. Everything I read will have to come from the library.

  2. Rosemary Wells on June 14, 2013 at 5:38 am

    I was one of the people who never planned to retire. Good job that provided variety and challenge, good co-workers, great staff – why retire? I was in good health until boom, the health was gone. I went on sick leave followed by long term disability. At the end of LTD, I thought I could go back to work but the company had moved on. The package was good and I had a bridged early retirement pension with medical and dental for life. So, retirement found me. Now, 5 years later, I have finally adjusted, mentally that is. I no longer miss the constant phone calls and emails and social events and challenges….well maybe a little. I am now healthy and waiting for my husband to retire so we can ride off into the winter sunset on our Harley, headed for Mexico!

    • Jill on June 23, 2016 at 8:22 pm

      Right on Rosemary!!

      All the best 🙂

  3. Robert on June 14, 2013 at 8:45 am

    First off, Daniel I loved your article. It reflects very little on my reality but I think these personal histories are really nice for gaining wider perspective.

    I am curious what “early” means when people use it in “early retirement”.

    – If I used the phrase it would only refer to being forced to retire earlier than my current plan.

    – I believe people with pensions tend to borrow the term from their pension plan definition, where it usually refers to a time where reduction of benefits kicks in.

    – Canada provides a definition of before 65 (soon to be 67) with reference to getting CPP sooner at a reduced rate. That being said, CPP does not even call this retirement as a person can certainly collect it for 20 years before retirement if they start collecting at 60 and want to work to 80. Conversely, you can retire at 50 but decide to not tap CPP until 70.

    – I think some articles mean “earlier than the average” where average is either a national number, a national number for their sex, or a national number for those who are not public employees. I think the average is around 62 overall in Canada.

    Don’t get me started on what “retirement” means!

  4. Shafi on June 14, 2013 at 9:23 am

    Yours is the epitome of the American dream. I, however, blew it when I had the chance to pursue the American dream.

  5. krantcents on June 14, 2013 at 10:10 am

    I achieved financial freedom when I was young (late 30s)! I did not kick back, instead I started a few businesses. I need to be busy and I expect I will never kick back.

  6. Daniel A. on June 14, 2013 at 10:52 am

    Hi Robert

    Early means many things for different people, true public sector people seem to leave sooner than us private sector folks. Average age of 62 in Canada is a number that I question given that more than 65% don’t have good work place pensions.

    I do spend a fair bit of time talking to people either considering retirement or already retired.
    I have yet to meet anyone that decided on early retirement have any regret.

    At the same time I’ve met some really sad stories of people that decided 65 was their time only to run into major health problems within a couple of years later.

    Its always the same story they tell me they could have left 3-5 years sooner but thought they would be in good health and spend 10-15 years in bliss because they lived most of their lives without major health problems.

    There is no way to turn the clock back for those years.

  7. Keith Charles Cowan on June 14, 2013 at 11:37 am

    Is your wife finally retiring to join you in the Baja next year?

  8. Daniel A. on June 14, 2013 at 11:59 am

    No Keith.

    She has a few years to go we did look at her leaving the work force, she and I never had the same plan for retirement.
    The cost of her leaving at this time would mean the loss of over one thousand a month in pension income.

    Before retiring my plan never bothered her since leaving she see’s me having a good time and now wants the same.

    Today my wife calls what we are doing is being in transition.We have downsized and moved close to her workplace, this has helped with her feelings.

    I’d rather she was out as we could then enjoy things together. I’m hoping we can split the difference and get her out in 2-3 years.

  9. My Own Advisor on June 14, 2013 at 8:42 pm

    Awesome post Daniel. Enjoyed it very much.

    Approaching 40 this year and hope to be working on my own terms in another 10 years. I hope to call it quits for good at age 55. That would give me about 26 years into a decent DB pension and my wife 26 years into a DC plan. We should have some decent RRSPs and hopefully a tidy dividend portfolio to live from as well.

    The house is our biggest asset right now, and liability, so I’m hopeful the mortgage is killed at 50 when I start wanting to work part-time.

    See you back on CMF.

    Cheers,
    Mark

  10. Bill Reid on June 14, 2013 at 9:04 pm

    Did you look at other destinations besides Baja? Panama? Belize? Etc.

    • Daniel A. on June 14, 2013 at 9:29 pm

      I’m leaving my options open for future destinations.
      Last year was a trial run to see how things would go.

  11. Anton Ivanov on June 14, 2013 at 9:21 pm

    Great reflection with lots of pointers for those looking to retire early (or retire at all). I think early planning and realizing the importance of saving can play a crucial role as well. It’s too easy to spend everything you earn your whole life and have nothing to show for it when you get older.

  12. Daniel A. on June 14, 2013 at 9:33 pm

    When I talk to people thinking about retirement I point out that there are two times in life we don’t get a second chance.

    Raising our kids and retirement.

    Everything in the middle may offer a second or third chance.

    Daniel A.

  13. Michael Smith on June 15, 2013 at 2:11 am

    I am fortunate only in that I have youth on my side. At 27 years of age and little saved for my wonder years, I had always kept the naive notion, or dream even, of being able to retire before the age of 45, without any definite plan in place.

    That in itself may be a pipe dream, but after reading several articles here on this site, I feel I can make definite steps forward instead of spinning my tires in neutral, as I have the past several years. After all, no one wants to work forever.

    • Daniel A. on June 15, 2013 at 10:37 pm

      Anything you do as a starting point will be worth the trouble. Just start by committing a small % for retirement savings every year and build from there.

      There are many of us that look back in the early years and wonder how that could one day be enough to live on. It will grow the power of compounding.

      Take the long view and don’t let short terms of a few years slow you down.

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