What does "Retirement" mean to you?

I'm a *big* fan of Dave Ramsey.

After living "Dave-ish" for years...I finally bit the bullet.

Gazelle intense over the last 12-18 months has me projected to be debt free (Baby Step 2) by mid-year.

By the end of 2020, I should also have Baby Step 3 complete...which is:

Save 3–6 Months of (Living) Expenses in a Fully Funded Emergency Fund

As a single male, 42 years old, I have determined I feel more comfortable with 6 months.

Baby Step 4 is - Invest 15% of Your Household Income in Retirement

Traditionally, Dave Ramsey and his team would suggest 401k/Roth IRA.

However, I'm wondering if a portion of that percentage could/should be devoted to "other" items such as:

Land

Other Ideas?

My current investments are little to none...after some poor financial decisions.

Now that I'm getting back on my financial feet again - I'm questioning traditional investing.

I have a chronic neurological condition known as epilepsy...and have been in a coma previously.

There have been a couple knocks on death's door - and I know that investments don't mean shit in the long run.

We never see a hearse pulling a U-haul trailer.

So...what does "retirement" mean to you and how are you (financially) investing in yourself and your future?

Hi Rob. Retirement, in my experience, is a process of learning to trust your own inner guidance. We all have unique perspectives, opportunities and limitations. We mine our mistakes for knowledge and achieve wisdom. Like a garden, what I plant in my financial bed probably won't grow the same way in someone else's micro-climate. Being thrifty has served me well. I don't need to conform to what others tell me is "necessary" to thrive. Investing is complicated and institutions will always have better knowledge tools than the average individual. The simple, low cost, long-term strategy is like the tortoise that chugs along in the background. Like growing a food forest, it takes time and patience and just enough tending. That strategy has enabled me to diversify into other hands-on parts of life. The Permies website is a terrific place to hear from people who are taking alternative approaches to living life: this is diversification at work. The skills, knowledge, resourcefulness and profound creativity is an investment that pays dividends daily, tax free. Living more simply allows me to appreciate the natural world and protect the treasures that are available to all. Having a place to tinker and homestead is wonderful and mentally stimulating. Land speculation is a completely different activity.
Retirement to me means following my heart, protecting the fruits enabled by my younger self, and nurturing slow-growing trees that will comfort my future self.
Enjoy your unique journey Rob!
Amy

Amy Gardener wrote:Hi Rob. Retirement, in my experience, is a process of learning to trust your own inner guidance. We all have unique perspectives, opportunities and limitations. We mine our mistakes for knowledge and achieve wisdom. Like a garden, what I plant in my financial bed probably won't grow the same way in someone else's micro-climate. Being thrifty has served me well. I don't need to conform to what others tell me is "necessary" to thrive. Investing is complicated and institutions will always have better knowledge tools than the average individual. The simple, low cost, long-term strategy is like the tortoise that chugs along in the background. Like growing a food forest, it takes time and patience and just enough tending. That strategy has enabled me to diversify into other hands-on parts of life. The Permies website is a terrific place to hear from people who are taking alternative approaches to living life: this is diversification at work. The skills, knowledge, resourcefulness and profound creativity is an investment that pays dividends daily, tax free. Living more simply allows me to appreciate the natural world and protect the treasures that are available to all. Having a place to tinker and homestead is wonderful and mentally stimulating. Land speculation is a completely different activity.
Retirement to me means following my heart, protecting the fruits enabled by my younger self, and nurturing slow-growing trees that will comfort my future self.
Enjoy your unique journey Rob!
Amy

Hi Amy...what a great response!  

My first lesson learned through all of this is the desire for being thrifty and free from debt.

The need for conformity decreases exponentially when we are free of financial burdens...I'm seeing this already.

I also very much like your analogy towards a long-term strategy is like the growth and development of a food forest - slow.

The ability to diversity in other hands-on parts of life is a VERY important thing for me to understand and realize.

Agreed on the permies platform...Paul and the permies team has done a *great* job with this site.

Perhaps I should start a thread of my very own documenting this long, slow journey!

That is a great question I have been pondering myself of late. I feel like the "traditional" retirement means you are over 65 and living of SS and/or a retirement fund. Hopefully you have paid of your mortgage, and have no major debt.
This feels like a trap to me.

At this point in my life I would say retiring would mean I no longer need to work a job for a set income, that 9 to 5. Instead I can do those things I want to do and live off that. I can raise a garden, animals for meat, make furniture, timberframe, forge knives, and sell enough of it to meet the financial needs I have, like taxes. The property I have is paid for, I have an emergency fund and several years worth of savings to live on if needed because I have put myself into a position where my expenses are extremely low.

I would not consider the purchase of lands to meet the retirement requirement based on Dave Ramsey. Certainly buy land, but that is after you have the cash to pay for it and your retirement is funded. Land is more of a step 7 item.

Exactly.  I'm feeling that the money I would put *into* "retirement" would be better put towards a larger emergency fund (several years like Caleb wrote, vs the 6 months I'm planning on), the land itself, and/or infrastructure.  Retirement to me is dying peacefully on the land where I've lived an abundant life...and living one with low expenses.  

As far as what retirement means to me. I suppose it means I live my life my way without becoming a burden on those I love. I don't want my kids to have to financially support me. I don't want them to have to change my diapers either. I want to live life fully, on my own terms until I die doing one of the random/stupid/crazy things I'm famous for. Then my kids can sit around regaling the world with "Then my Mom" stories.

I can't control what may happen to my mind/body in the future but I can secure my financial future. So that's what I'm doing. Saving for retirement.

I love Dave Ramsey as well. My wife and I took his course last year and really learned a lot.

I do not always agree with him though; me and him really clash on insurance: I despise it, and avoid it at all costs, but I am okay with risk, and Dave Ramsey is an insurance salesman, so that is going to happen when there is that much disparity between two people.

Still, I retired at age 42 with a wife and (4) children...

It can be done for sure.

I ended up getting cancer, so my plans have been really thrown off, but I am approaching (4) years of retirement and managing to stay afloat. People with cancer often do not get that as they often are bankrupt after only one year.

So retirement may not be a forever thing for me. I might have to rejoin the workforce.

I qualify as a Disabled Farmer, so the USDA has a program to get farmers who cannot farm, back into the workforce. Part of that is retraining. At age 45...it was too overwhelming; oh it was great that I can do anything...go to college, get a new career, get paid on-the-job training; but WHAT TO DO?

I thought about a few things, but it all fell through, so in the end a college course came available so I took it; a 100% stab in the dark, and it is perfect. I am going to be a High Pressure Steam Engineer. This is perfect for me because it is NOT age dependent, it is a job that is in high demand, and it works well with Permie-Rated Stuff.

I will most likely be a freelance boiler operator, something they call Locums. When a boiler plant like a hospital, paper mill, sawmill, etc need a Boiler Operator, they pay a Locum to watch the boiler while the regular guys are on vacation, or it is a holiday, or something like that. So I will just float around, taking jobs as I need or want.

I know this is not what you wanted to hear, but I have lived the dream, retired at age 42, and yet while I did not see cancer wiping out my plans and money, it shows one thing: a person can go back to the workforce. It is not the end of the world...

Great question.

I think the answer varies widely depending on individual risk tolerance.  And it is important to go through the mental exercise - what will my future self want/need in 10, 20, and 30 years?

Will I be OK not having the resources for long term care should I develop dementia at 70?  What about my partner?  How much of a burden am I willing to put on my kids, effectively shifting the risk to them?

Am I OK spending 25-35 years in a job I don’t love to grow resources into 401k accounts and pensions that might go poof depending on geopolitical events completely out of my control?

Will I look back on my life with regret if I spend it (or part of it) in a cubicle producing reports for a corporation that would happily outsource my job to Manila if it would save shareholders a few dollars and give the CEO a raise?

How long do I think the current system continues to function before it collapses?

I think there is a balance between risk and reward. If you work for the man long enough to buy the land for cash, and long enough to get your food and energy systems in place, how much annual income do you really need to get by? Property tax?  Would you want health insurance, and if so, how will you cover that?  One can be optimistic, and assume that if you eat well and stay active, you probably won’t get seriously ill. But then some people do - what is your tolerance for that?  MS?  Cancer?  Arthritis? Other chronic, debilitating genetic diseases?

Will you have the energy at 60 that you have at 30?  Can you implement systems that are self-sustaining before you run out of energy? Can I build a local community that can mitigate some of the risk?

Is there a sensible way to transition to independence to make sure my dreams are what I imagine before taking the plunge?

Nobody can really answer these questions except you. There are no guarantees, and no sure bets. It all comes down to a solid plan and an understanding of the risks, and the willingness to start over if it all falls apart. Nobody envies the old and destitute. Many envy the young and fancy free. Where do you fall on that spectrum, and are you willing to risk being old and destitute if optimistic plans don’t play out?  Understanding that “wealth” and “assets” are also fragile and can also disappear, leaving you old and destitute even if you follow the “rules” and play the game?  Would you ever really be old and destitute if you develop the skills to produce your own food and build your own shelter on your own land or on someone else’s land?

Personally, I have always focused too much on the security side and not enough on the freedom side (and still do).  Deciding when to cut the cord and live the Gert life is a tough call, no question about that. I don’t know if there is a right answer. With risk comes reward. Or disaster.  Permies provides a wealth of information on how to mitigate many of these risks.

At the end of the day, you own your decisions and the potential consequences that flow from them. You can hedge your bets or bet it all. Your call.

I retired in 2015 after 26 years of teaching college. My career provided a decent income, medical insurance, lots of rewarding interactions with students and with colleagues in my field, and a nice pension. I loved my job and looked forward to going in every day.

During that 26 years my wife and I also had our own small farm project where we worked to develop American Bullfrogs into domesticated farm animals.

I still marvel at getting paid every month not to work. In a couple of years I'll start taking Social Security (it goes up about 8% every year that I hold off).

Now I'm just a small time farmer and farming experimenter.

My wife is still working in education and enjoys it.
We've been debt free for a long time.

I see retirement as a state of being where all of my basic needs are covered without having to ever work. This however does not include expenses for hobbies and such.

Retirement isn't free money, it means I have prepaid/saved for all my basic/major needs in decade timescale, until at least the avg life expectancy of 77yrs
1) Housing, usually $12,000/yr or $120,000/decade
2) Water & Sewer, usually about $1,000/yr or $10,000/decade
3) Electric, about $1,200/yr or $12,000/decade
4) Natural Gas, usually $1,000/yr or $12,000/decade
5) Cable, Internet, Phone, Trash, $2,000/yr or $20,000/decade
6) Food, $3,000/yr/person or $30,000/decade
7) Healthcare, $15,000/yr/person or $150,000/decade (this expense sneaks up on everyone)
8) Transportation, $7,000/yr or $70,000/decade
9) Clothes, $1,000/yr or $10,000/decades
10) Maintenance/Upkeep/Insurance, $2,000/yr or $20,000/decade
11) Tax, $4,800/yr or $48,000/decade (another one that sneaks up on everyone)
subtotal is $50,000/yr
With Half a million in the bank and a projected 10% return on investment, one could survive on just the interest. The stock market goes in cycle sometimes losing 50% of the principal other times making 20% on the principal so a whole million is needed to ride out such fluctuation.

The above is just survival expenses/money. If you want to have hobbies/vacation/charity/family/etc, thats going to cost you extra. This is where having a hobby as source of income fixes in perfectly. You could try out a new field of work/hobby, every year and you don't have to worry about working for 'the man" or fickle customers. And if you make enough money you can setup that wealth for the next generation.

Putting away $834/month ($10,000/yr), every year from age 25(2000) to age 45 (2020) would have netted someone over half a million ($600,000). And they would be ready to retire, and really enjoy their mid-life crisis, taking up random hobbies, doing little gigs, to really splurge.

Some investment/expenses like housing can be done onsite vs leaving it as investment at some corporation. With less future geo-political-economic risk. Water, Sewer, and Electric and solar-thermal passive heating just looks better if it is done onsite too. If someone also invest some of that into a rental house for $120,000 and collect the 10% interest ($12,000/yrs) as rental income and still have the principal(house) increase in value. While not onsite, like the others above, it is still local, and gives the retire more diversification and control. I am sure that producing some of ones food onsite, esp in a food forest setup, where alot of the work is done upfront and the day to day work after 10yrs is minimal, would reduce food expenses and due to higher quality food in theory it could reduce healthcare expenses.

I came across Dave Ramsey's info back in the 1990s, and implemented it right after college: paid off student loans, car, and credit card by picking up 2 part time jobs on top of full time job, and saved up enough to buy the first mortgage/house, was putting 10% into the 401k, and had 6 months expenses in the bank for emergencies. Refinanced from a 30 year mortgage to 20 year when interest rates dropped from 8% to 7%, payment only went up $10/month! Had graphed out a retirement point in 15 years when investment interest would eclipse monthly expenses. Then came marriage to a spendthrift followed by moving for work and buying a much more expensive house... Was still paying all the bills and saving, but my spreadsheet showing my retirement target of 40 was knocked back to 60, but then the divorce fortunately moved it back down to 50. Amazing how much you can save when it's not all being spent!

The biggest change at retirement is what will make it much easier- moving from a very high cost of living area with a big mortgage to a lower/average cost of living area with no mortgage. Work has a mandatory retirement plan that will provide enough to live on that alone, but between the various 401k-ish plans I have there's enough to use the 4% rule ( https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ ) to take various trips/vacations and see other parts of the world when I'm not building on the homestead. https://www.firecalc.com/index.php is an interesting tool you can use to determine retirement financing in more detail but like any calculator the results depend on knowing what you have and what you need. I think a lot of people get bogged down in all those marketed "wants" and get convinced they are "needs", and never feel they have enough to retire or wait until their late 60s or 70s. My plans aren't dependent on Social Security remaining solvent, but if it is then I'll probably take that at 62 which will help cover medical expenses if we are still using for-profit healthcare by then. Otherwise, even more and better trips!

As far as the investment types to use, don't forget that traditional IRA and 401k will incur a penalty (10% I think?) on top of income taxes if taken out before you're (I think) 59.5 years old. I'm not sure if I'll invest my old house equity into a golden butterfly portfolio: https://portfoliocharts.com/portfolio/golden-butterfly/ which is a very stable setup or if I'll target a narrower mutual fund that focuses on dividends over growth, and use that as the vacation money.

A few years ago I was in a job that was unstable, and then had our finances cut almost in half due to hubs medical issues, all with a big mortgage looming. Everything seemed pretty dismal until we distilled it to the easiest answer: pay off all looming debt as aggressively as we could, and live well below our means. Fast-forward and in 6 months we are on schedule to pay-off the remainder of our debt (mortgage and car) and then we can live comfortably on hubs disability pension. I have a stable job I want to be free of now, but we have reduced spending to the point that my entire salary goes to paying off debt plus some of H's disability pay, so we know that when that burden is gone we will have more than enough. The simplest path (for us) was to need less and work with what we've got. We have the benefit of a secured pension, albeit H will have further medical impairment down the road. We have traditional 401ks and Roths, but we shouldn't need to tap into them for many years. I've started getting into the "mrmoneymoustach" advice, and have started moving some of my investments per their recommendations, but our plan is to reduce needs to fit the pension and not rely on draws from a brokerage account. I'm hoping to retire (really just resign) in January of next year, which will give me a small annuity in the future (plus our additional retirement accts). Basically we budget from the disability retirement (military) pay and we are counting investments as bonus.

well you missed out on buying Fannie Mae or Freddie Mac stock at 75 cents a share when the market crashed in 2008/09-- stocks , 401k's will always go up then crash so beware, just my opinion. read the fine print on 401k agreement most likely the service fees will eat much of your estimated profit but you may need a lawyer to decipher the fine print. real estate is usually a good solid investment, campers and mobile homes are the only housing that is meant to decrease in value with age just like automobiles.  retirement I guess is doing what you want when you want.

Interesting discussion. My husband's and my goal for retirement was to require less money by working toward greater self-reliance. We knew we'd have a financially lean retirement, so we worked toward growing more of our own food while simplifying our lifestyle. We tried to get most of our infrastructure in place while we had a regular income, with the idea that we'd be in maintenance mode as we began to slow down. Neither of us thinks much of leisure and entertainment as preferred retirement activities, rather, we want a to maintain sense of personal purpose. Tending our gardens, pastures, fruit trees, wood lot, and livestock gives us that sense of purpose.

Retirement came much earlier than expected because my husband had an accident that left him with limitations with his left hand. We had a significant drop in income, but by that time we'd simplified our lifestyle and pared down our bills so that the adjustment was easier than I thought it would be. We are growing most of our own food, and supplementing electricity and water with home-harvested solar and rain catchment, so our expenses are pretty minimal. The only thing I wish we'd been able to do was get our mortgage paid off before now. It's our only debt and we pay extra on the principal, but getting it paid off before retirement is the best advice. Getting all debt paid off is excellent advice.

I'm married to an idea guy, so we've still got projects going on. But we pay as we go and find that this helps pace not only our budget, but our energy as well.

bruce Fine wrote:well you missed out on buying Fannie Mae or Freddie Mac stock at 75 cents a share when the market crashed in 2008/09-- stocks , 401k's will always go up then crash so beware, just my opinion. read the fine print on 401k agreement most likely the service fees will eat much of your estimated profit but you may need a lawyer to decipher the fine print. real estate is usually a good solid investment, campers and mobile homes are the only housing that is meant to decrease in value with age just like automobiles.  retirement I guess is doing what you want when you want.

Not really accurate there. As the stock market crash you mention also coincided with the housing bubble. At which point real estate was worth as much as stocks. But, both went back up.

Retirement is a relative term.  I took an early retirement in 2014.  That means besides the homestead, I held 3 part time jobs.  This was not an issue of saving for retirement.  This was a combination of me wanting to buy things on my wish list as well as exploring various roads not taken.
I did take most of Jan off as well as all of Feb and March to get caught up on projects.  My work schedule is filling up for April and May.

Leigh Tate wrote:The only thing I wish we'd been able to do was get our mortgage paid off before now. It's our only debt and we pay extra on the principal, but getting it paid off before retirement is the best advice.

If you're still carrying a mortgage, you may want to start talking to brokers to see if you can get a better rate. I've heard they are dropping due to the pandemic. Ours is so low (we got a 15 yr for under 3% through a refi a few yrs ago) and with only 2 payments left, it's not worth it for us, but might help in your situation. It sounds like you already have most of your ducks in a row, congrats! So sorry that your SO suffered a disability, but sometimes the silver lining is that putting your true wants and desires into perspective lets you live a happier and more fulfilled life.

The work while employed was actually too enjoyable to leave entirely, so after taking early full retirement (but not yet collecting the annuity) I hired back as an independent contractor.  That has allowed me to choose the amount and schedule of work hours, for the most part, as I see fit.  It's not that we've taken on more in retirement around the homestead, but rather that maintaining it just requires energy that older bodies have a more difficult time providing.  With no home mortgage now and only one debt (0% financed ag vehicle), it's easier to choose more wisely these days on what are needs versus wants and prioritize both accordingly.

When I cobbled together an annual salary as a contractor (based on hourly employment), the goal was to see if my calculations on a projected annual budget would come close to reality.  I came up a bit short but fortunately had a boss who was willing to bump it a tad.  More importantly, it's still just within the numbers of what will pay out from the annuity [+ Social Security (USA), + 401k by current projections,....no telling where that will go] once that is activated.  So it builds in some flexibility, but also some juggling....employer provided health care plan (again, USA) but now I get to 'shop' for a plan.  All in all though, working out pretty well.

I have no savings, no pension, no anything that I'm aware of coming my way so I guess just simply dying will be my retirement? I work pretty much full time on a farm so wages are what you'd expect for a hand...kind of low. It's by choice though, I used to make decent money as a mechanic.

If I can't pull my own weight I don't really want to live anyhow. I love to work hard outside all day :) I feel like I have done enough modern life stuff and really like getting simpler and closer to the land now...one day so close I'll be buried in it then if someone wants to carve "retired" on a rock and set it there that would be cool!

Generic concept of retirement looks to be, quit working at what you don't like, start working at what you do like. Or at least think you hate less so you can do it to avoid going nutso.

Gotta keep all the parts moving. Use it or lose it. Doesn't matter whether it's framed by age, "nest egg", job loss, whatever. It's a Change related to "work". What "work" means to others, hard to say. To me it has to do with what is needed regardless of how I may feel about doing it. That changes, but I don't think it ever goes away.

Other aspects might be that after a certain period, our "resources", money, smarts, intuition, contacts, health, etc. change and so we need to change our outlook, plans, dreams, modus operendi (MO for you old detective story fans) to adjust to "reality". And hopefully make good fulfilling efforts.

It's a way of formally recognizing Change having to do with the individual's relationship to his world. Ie. society, physical interactions, lots of stuff. Presumably the concept evolved because lots of people found a use for it. But maybe it's just an advertising gimmick. But I think not. Consider grandpa BS'ing on the front porch while the youngsters listen up. Or Grandma telling family history to the girls while cooking not as much as she used to. Retirement means stopping doing one thing that you're really familiar with and that gave shape to your life and and starting something else just as important.

Cheers,
Rufus

To my mind, retired means not working for money. The rest of it, to me, is just stopping working one job, and starting working another, while maybe receiving a pension. And while I understand why people would do these things, I don't call that retired. I don't work off of my property, and in all likelihood never will again, but I'm not retired or unemployed, simply living differently. And that's not a judgment on whether one should or should work off your property or change professions when one is able, it's merely my definition of terms.

For me it means working on things I like.
I do have a pension, but I do odd jobs to raise cash for things out of the ordinary.
I think I ork longer days than I ever did, and I dont care about that.
I have startd a small business repairing fly screens for people tha helps when I want to wast money on my motorcycles. !!

When I was younger, I though retirement meant not having to work while having lots of money, a fancy house, a couple of cars and lots of material things.  Fast forward many years and my view of retirement has changed tremendously.  Now I view retirement as a point of life when I'm completely out of debt (almost there), have a comfortable home (have it), can generate enough money to keep my bills paid without taking from savings (doing that now), my vehicles are paid for (bought with cash), and spending my days doing what I love (working on it).  Material things aren't important anymore and most of the "new" possessions we have have either been bought at yard sales or thrift stores.  

I guess I would consider myself semi-retired though I generally work 12 or more hours a day.

S Bengi wrote:
With Half a million in the bank and a projected 10% return on investment, one could survive on just the interest. The stock market goes in cycle sometimes losing 50% of the principal other times making 20% on the principal so a whole million is needed to ride out such fluctuation.

For a lot of us, that is pie in the sky. At 47, I am nowhere near on track for that, and it isn't due to lack of foresight. I have a Roth IRA, and TSP; but I have seldom earned enough to max them out while still meeting my current expenses. I've been a renter all my life, so no mortgage, but also no equity. "Invisible" disabilities can sometimes more than offset high education in terms of employability.

That's why I chose the Dominican Republic. I was presented with an opportunity to purchase a 100-year lease on an eighth of an acre, for an amount that I was able to pay off without taking out a long-term loan. I still need to cover the annual fee, but that is a lot more doable than  a year's worth of mortgage payments. An eighth of an acre is small by Permies standards -- I occasionally see blogs and whatnot about self-sufficiency on a quarter acre, but never smaller than that -- but I have to face the reality that that is what I have to work with.

For me, retirement means being able to make that my permanent home (I'm not currently there), with the permaculture features reducing my expenses: solar panels, food forest, gravity-fed water. I am preparing now by expanding my work-from-home skill set, since I am pretty sure that I will need some source of income besides my IRA, TSP, and Social Security. In my youth, I dreamed of being an explorer in the Amazon or Congo; people like Jane Goodall and Henry Bates were my heroes and heroines. What do you do when the future you dreamed of becomes the past that didn't happen? The years of my life that I had envisioned doing that are now mostly gone -- spent in the struggle to get by, with periodic, tantalizing tastes of the dream when I was able to travel. But during my last sojourn at my Dominican "homestead," I was able to encourage myself with a mental exercise: I thought of all the exotic flora and fauna so beautifully illustrated in my childhood books, that I had wanted to see someday, and ticked off which ones I had seen there in the Dominican hills and shores. I concluded that there were enough of them that I could still do meaningful "exploration" close to what I now think of as home. At 47, perhaps I can still say, "When I grow up, I wanna be an explorer!"