“How much money is enough for retirement? How do you plan for your children’s education? Why retire when you can continue to earn? How can you be sure you will continue the same lifestyle after retirement? I would not like to be locked into a lifestyle I don’t like just because I retired early.”
These are all valid questions and are some of the common that you are asked when you talk about retiring early. The generally accepted definition of retirement is that you laze around with a book in your hand or watch TV wondering how you can be even less productive the next day! But for us Squirrellers, retirement means having to not put money first ; being able to live your dreams ; and leading a happy, healthy and fulfilled life.
For me personally it means not having to answer to a 9 hour day job ; the freedom to pursue my hobbies ; ability to freelance and do part-time work that really interest me ; maybe volunteer for causes I believe in. Retirement does not mean that I live our my life in obscurity. The accepted definition of retirement is for those who have worked their whole life and do not have any strength or passion left over to pursue their interests. When you retire early, there is a lot more passion and restlessness for you to harness and accomplish more than you could have planned for.
To answers the questions, we expect our expenses to actually go down. This will be because we will cut down on daily travel. As you experience the journey to FIRE, you will realize you need less and less to make you more happy. We are hoping we go through the same realization and reduce our expenses before we retire. Since we will already be spending less, we do not expect a drastic change in our lifestyle after retirement. Once you stop deriving happiness from extra spending, you do not tend to get back into that habit as we have already realized.
From a earning viewpoint, we do not plan to stop earning. We plan to have rental income that will satisfy at least 1/3rd of our monthly expenses. We also plan to freelance or work part-time to make up a 1/2 of our total expenses. We need to find some more avenues of alternate/passive income to ensure our expenses are covered. We still need to plan the numbers around this, so expect a post soon with our assumptions and our retirement plan with numbers. With luck we will be able to earn a little more than our expenses and end up increasing our stash rather than eating into it.
We will start exploring alternate sources for income closer to retirement. There are multiple options available online – blogging, Youtube channels, podcasts, online courses and so on. We can even leverage our work experience and do part-time consulting for firms.
The best way to plan for your retirement is to be conservative on your assumptions of expenses, income and inflation. Make sure you build in a good safety margin, and you will more likely end up on the positive side of your calculations. You just have to ensure there is a small savings adding into your stash every year. You can retire today if there is a 100% chance that you will earn 1 Rupee more than your expenses every year.
Just remember that you are just
“Beginning the first day of the rest of your life”
Do share your thoughts. What are the assumptions you have built-in while planning your retirement? How do you plan to earn income after retirement?