Slow-motion retirement: A new way to look at life
Posted
Mar 26 2008, 09:32 AM
by
Karen Datko
Rating:
This post comes from partner blog The Dough Roller. An earlier version appeared on MSN Money here.
Traditional retirement looks like this: work until you're 65 or so, and then stop working until you die. More recently, views of retirement have begun to change, as more and more "retirees" are forced to work long after 65.
There is a major problem with the traditional approach to retirement, which I'll come to in a moment. But first, how would you answer the following question: How much of your life today is spent doing what you want to do when you want to do it?
If I were to answer that honestly, the answer would be about 20%. Yuck! And I don't hate my job. I wouldn't work where I do if I were independently wealthy, but I have a good job, work with good people, and earn a good wage. But I still work. I still get up five days a week, spend one hour getting ready for work, 50 minutes commuting to work, about nine hours at work, and then another 50 minutes returning home.
Under the traditional views of retirement, I will keep doing this same routine for the next 24 years, then I'll stop cold turkey and do who knows what until the end of my days.
I started The Dough Roller in part because I don't like the traditional way of looking at retirement. And what's worse -- here's the major problem I mentioned a moment ago -- I believe that looking at retirement as something that happens decades from now for many of us is one of the major reasons why so many people don't save for retirement. It's just too far away to worry about, many believe.
I want to change that way of thinking, so consider the following questions:
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Would you move to a different, less expensive city if it meant you could immediately begin to work less than you do now?
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Would you move to a smaller, less expensive house if it meant you could immediately begin to work less than you do now?
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Would you own fewer cars (or less expensive cars) if it meant you could immediately begin to work less than you do now?
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Are you passionate about something that you would love to spend more time doing and could make some income doing it?
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Are there changes you could make in your current job that would give you back some of your time (e.g., telecommuting one or two days a week)?
Slow-motion retirement
The questions above bring me to the key point: What are you willing to do to get back some of the time you now spend doing stuff you'd rather not do? I call this concept slow-motion retirement. The idea is to start retiring now, little by little, not waiting to take the plunge when you're too old to enjoy it.
What sacrifices are you willing to make today in exchange for getting back more of your life? Six years ago I took a $100,000 pay cut (yes, $100,000) to get back more of my time for my family and me. I haven't regretted it for one second. And it's not enough.
I want even more of my time back that I now give to my employer. How am I going to accomplish this? I have a three-step plan that looks like this:
Telecommuting. My first step is to telecommute to work one or two days a week. For each day I work from home, I'll save at least 1.5 hours commuting and about $15 in transportation costs. If I telecommute twice a week, in a year I'll get back the equivalent of 12 days of my time and save nearly $1,500. Over the next 20 years, I'd get back 240 days and save $30,000. I've begun discussions with my supervisor about telecommuting, and will be writing more about how that goes.
Working part time. My second step will be to scale back to part-time work. If I work four days a week instead of five, the time I'd get back would be substantial. Over the course of a year, I'd get back more than a month of time. Combine this with telecommuting one or two days a week when I do work, and I'd quickly take charge of a significant portion of my life that I now give to my job.
Working part time would of course involve a financial sacrifice, although probably not as much as you might think. For somebody making $100,000, a 20% cut in pay would not actually cost that person $20,000. You first have to look at the after-tax cost, and then consider the money you'd be saving by not working that fifth day of the week (e.g., transportation costs, clothing costs, lunch, day care). For me, a 20% cut in pay would actually cost me about 12% of my take-home pay.
Redesigning your life. This is when we don't get back just some of our time; we get it all back. To me, this is not retirement in the traditional sense. This is when I spend most of my time doing what I want to do, when I want to do it. The key question to answer is this: If you could design your life from the ground up, what would it look like? Notice I'm not asking: If you won the lottery, what would you do with your life? That's a common question, but, beyond some entertainment value, it's not helpful (unless, of course, you win the lottery). Most of us have responsibilities, whether to a spouse, our children, our parents and so on. And we all have to eat. But within those responsibilities, what would your life look like if you could redesign it?
Here's what my life would look like. First, I'd teach at the college level. I love teaching, and I'd love to be a lifelong student as well. Teaching is one profession that offers an incredible work-life balance. Second, I'd write books. I've wanted to be a writer for a long time, but have never had the discipline to complete a book. Third, I'd spend more time taking care of my family and me.
I'm taking some steps toward this reality that I'll write about another time.
But enough about me. What would your life look like if you could redesign it (within reason) and what are you waiting for?
Other articles of interest at The Dough Roller:
"Money-saving tips: 51 painless ways to save money"
"10 online budget tools"
"Lending Club vs. Prosper"
