Early retirement is not a topic that I cover on this blog quite often and it won’t be.
I just don’t like it. I’d love to be financially independent and be able to concentrate all of my time to own online business ideas.
But to be quite honest, I’d also miss something. As a software developer, you’re making your hobby to your job and I would definitely miss programming.
Sure you can continue working on own projects, but it’s just not the same as getting requirements and a fixed timeline from a client and you have to solve all the problems in time. That’s what I love. Finding solutions to complex problems. Having a challenge only very few can solve.
However, two days ago, for the first time, I was really considering early retirement as an option. All of this started with a sad and dramatic story. It has to do with a hard-working man and his escape from East Germany in 1986.
Two days ago, my Dad told me that one of our neighbors is about to die soon. We live in an apartment tower with over 60 families, so that someone dies happens more often than you could imagine.
I didn’t even know this man. However, my dad knows him because they were smoking together outside of the house regularly. He told me his story and I want to share it with you. I will call this man Tom even if it’s not his real name.
The story that kept me thinking about early retirement
Tom was living in the DDR (German abbreviation for the German Democratic Republic or East Germany). In 1986 he moved into the house I live in right now in West Germany. As you may know, the fall of the inner German border was in 1989. Citizens of the DDR were not allowed to travel or move to West Germany. They were not able to leave to a western country in general and just for trying you were prisoned or even worse. I don’t know it for sure, but the only option I can image is that he escaped from East Germany which was a very risky move as he could easily get killed.
As soon as he arrived in West Germany he started working very hard. He worked as a trucker until the age of 63 as he went into retirement (you were allowed to retire with 63 instead of 67 without a cut to your pension). Finally, he could cut back and relax a little and enjoy the life with his wife and family. His mother is still living in this house in another apartment and he is taking care of her. There was always something to do for him.
4 years ago, he received a shocking diagnosis by his doctor. He was afflicted with liver cirrhosis. However, he was able to overcome all obstacles to flee to West Germany, so he was also fighting back against this disease. A few months ago, he was pretty healthy again and was getting ready to receive a new liver.
Now with one year after retiring it finally seems to work out for him. But in the hospital, they told him that they can not give him the liver as his whole body is already affected by cancer and there was no way of saving him. From that point on, he collapsed and stopped eating and drinking. His wife told my Dad, that he will probably die before the end of the weekend. All of that has happened 1 year after his retirement.
What a bless early retirement can be
I think it’s pretty obvious why early retirement would have been a blessing for him. He could have retired early at the age of 45 and enjoy 20 years of this hard-working life without actually having to work. Now he will die with 64 after hustling until 63.
I’ve thought about this for a long time and for the first time in my life I was considering early retirement as a valid option for me. I don’t want to work my whole life like a bulldozer and when it finally comes to reaping the benefits I can’t enjoy them anymore.
Life can be tough. I’m really sorry for this poor man.
Why I’m still not into early retirement
After the initial sadness, my brain started working again like it does normally.
I’m just no person for early retirement and there are a couple of reasons for it.
Sacrificing your early years for an uncertain future
First of all, I don’t want to cut back heavily now so I can retire with 45. I don’t want to sacrifice my youth and not buying nice stuff when I’m physically in the best shape to use all of it. Sure, with 45 you are still young and I can bet that as soon as I am a father I want to spend as much time as possible with my kids. But we’re not planning to become parents with 45, so I want to have more time for them even earlier.
Lifelong frugality and less flexibility
Another reason why I dislike early retirement is the need for frugality over your whole lifespan. It’s not like cutting back now so you can spend a lot later. You are committing yourself not to spend more than around 4% of your investments per year (mostly about $40,000). I don’t know how I want to live in 20 years from now. I also can’t predict the circumstances in which I’m living, but I want to be able to dynamically change the direction and this is much easier with working less instead of stopping to work completely a get a job after 10 years of unemployment.
In general, I wouldn’t feel comfortable with this system. Maybe this is caused by my lack of knowledge, but for me, this is a lot of predicting that the market and your life won’t change drastically in the following years because it didn’t do that during the past. However, that doesn’t mean that early retirement won’t work for others and that’s also a good fit for them. It’s just not compatible with me.
What to do with all the idle time?
I am a person with a lot of hobbies and things I would like to try out. If my daily time would be unlimited, I would definitely work out more often, learn new things (especially the Serbian language), play video games, become the best investor of all time, develop my own financial application, read much more and so on.
However, a big part of my daily life right now has to do with work and I’m not just talking about my office hours. I work on side projects, create a blog, learn new concepts for development, etc. I can go to holidays but 2 weeks without anything that is at least a little related to my job or blog would be hard for me. It’s simple. I like to work. That’s it. I don’t want to work less, otherwise, I could stop doing a lot of the stuff I keep doing on a weekly basis.
There is also a great guest post on Physician on FIRE. The guest post author is a physician who failed early retirement for several reasons. All have to do with not working anymore and resulted in taking another job.
The Tim Ferriss way of thinking about early retirements
Tim Ferriss is one of the top performers out there. He is well-known for his book The 4-Hour Workweek. In it, he explains how he removed himself from his own businesses and cut his working hours from 80 to 4 per week and still making more per month than most people receive in one year.
He calls retirement, in general, the ‘worst-case scenario’. You are physically not able to work anymore. That doesn’t mean you shouldn’t plan for it but you shouldn’t work your whole life for it. He prefers mini-retirements over early retirement as he can use his physical best years for all the funny stuff and not wasting them by sitting on a desk.
Mini-retirement means that you are taking off a few month on a regular basis and learn a new thing like a language and/or traveling the world. With this approach, he was able to set a world-record in Tango and become a national champion in kickboxing. So it does actually work.
I heavily agree on his opinion. However, I prefer to work as a freelancer 20-30 hours per week. After a successful project, I can take-off 2-4 weeks to catch up on all the funny stuff. Well, I’m still trying to achieve this.
Early retirement is not the solution for me. What do you think about it?