9. Retirement


If you could...have any job in the whole world what would it be?



Why do you work? No, really. Why do you have a job? Okay okay, yes, I know you have to pay for your sweet crib, BBQ ribs and cornbread, and the drinking and debauchery you get into every so often...or at least I do (tee hee)...no, but really, if there's anything you could be doing with the majority of your time, anything at all, what would it be? Would it be what you do at work right now?

For me, that answer was "No." So, I did something about it. Over the past 2/3 months, in the throes of Monday morning work agony, I was compelled to ferociously (...ehm, I mean professionally) escape as fast as I could (...ehem, I mean, apply to other jobs). I received many rejections, but then, suddenly, faster than you can say butter me up and call me a biscuit, I got a job offer to a truly $weet job! I resigned from my old job and start the new one next week! WOOOOOOOOOOOOOOOO!!!!!! Just. Like. That. Don't leave yourself in the woes of Sunday night dread - you too can get out. Start applying now. 

And not only is my new job something that I've always wanted to do and have been dreaming of forever 'ever (education consulting - yay!), but I'm also going to get paid 20% more. One more time: Twenty Percent More! Bam! Take that old job!

So now, I will be going to work because I'm excited as f***, and because I'mma get paid what I believe I'm worth. This means that I'll have 20% more wiggle room in my budget and can *definitely* reach my debt pay off goal. And perhaps even do so 20% faster! :::two snaps and a head roll:::

February Update! Bam!

But, alas, as a wise many once said, "Mo' money, mo' problems." Before I get my first shiny still-in-the-envelope paycheck, I *must* allocate those funds even more wisely so Mo $ = No problems. And, to keep up with one of my new year's resolutions to focus more on abundance rather than debt/frugality (because a poor person can't get rich by counting their neighbor's wealth), let's talk about when we're expected to have almost no'money...retirement...dun dun dun!

Okay, it's not that scary. Really. After feeling super overwhelmed from doing a ton of research on traditional retirement and trying to plan out my life on excel, I realized it really boils down to one simple question -- and it's not, how much do you need to save -- it's simply, what do you want to do with your life?

Okay, before I go off on one of my existential tangents, let's get real bare bones about retirement savings (spoiler alert: you can save fore retirement while paying your student loans. I am and have been):

What is retirement?
Traditionally, in the US of A, this means working for many years (30-40 years), saving 10-15% of your income during your working years, quitting in your 60s to live off of the savings, and enjoying leisure time until you croak. To the right, there's a lovely infographic with some basic stats.

How can I save if I have student loans? Three steps: 1. Read this, 2. Match, 3. Automate...more slowly now...After reading #1, see if --and how much-- your employer matches and automate as much as you can to take advantage of it. My old employer matched 100% of what I put into retirement after my first year, and up to 5% of my income. So, since I was on my 2nd year of employment, I automated as much as I could into my retirement savings each month ($50 per paycheck) while still making my student debt goal and my employer put another $50 per paycheck in as well. My new employer matches 50% of what I put in after 12 months and up to 7% of my pre-tax income. Since my employer won't match until my 2nd year, then I won't put anything into my retirement until then. However, in the mean time -- during my first year -- I'll automate what I would be putting into retirement ($250) into a savings account and then put it into retirement during my 2nd year (but only up to 7% of my pre-tax income) that way I'll get the 50% match my 2nd year. Also, I've been (mostly blindly) putting away for retirement since I was 22. I didn't know what I was doing, but glad I did it. I have saved less than what I owe in loans, but it's something. And, it feels good to know I do have some savings.

What is retirement planning?
Figuring out how much you need to save so you don't run out of money before you die. The catch, you don't know when your expiration date is, soooooooo, ya...it's not only difficult to calculate your "retirement number" but it's also impossible and frankly, a bit creepy. But, putting aside the creepy-ness for a moment, retirement planning is basically making your budget for the 60-something year-old version of yourself. Plain and simple. Once you have that budget, then you figure out how much you have saved so far (if any) and then how much you need to save. But this part about figuring out how much you need is where it can get tricky. I found this retirement calculator to be a good starting point...up until I decided I want to live until 101...and now let's throw the creepy-ness of retirement planning back in the mix....

...traditional retirement is basically the financial planning of the last years of your life. In other words, zero fun. Planning + end of life + gray hair + Depends diapers = zero fun. I believe this traditional notion of retirement is archaic and should itself be retired (haha, pun intended!). And I haven't seen it better spelled out than by AffordAnything.com, in "The 4 Types of Retirement":

#1: Traditional Retirement

This is what the average person imagines when they hear the word “retirement.” Work until you’re 65, save 10-15 percent throughout your life, and retire with enough money to support yourself through your golden years. If you did it well, you’ll have enough disposable income to play a few rounds of golf and take a Carnival cruise.

#2: Early Retirement

This is similar to the above model, but accelerated. Earn a high income when you’re young. Save like a maniac. You’ll follow the same basic model (an uninterrupted period of work followed by permanent retirement), but you’ll quit your job in your 30’s or 40’s rather than in your 60’s.

#3: Mini-Retirements

The mini-retirements model is centered on retiring frequently. This model alternates periods of intense work with periods of complete rest. If quitting your job was a sport, the mini-retirements model would be “interval training.”
You might, for example, work for 2 years, save $30,000 during that time, then spend the next few years traveling. If you’re an entrepreneur, you could work two weeks per month, then take the next two weeks off. I’ve heard about others who work for 2-3 months, then take a month off.
This is precisely the model I followed when I graduated from college, worked for three years, and saved enough during that time to spend the next 2.5 years traveling the globe.
This model allows you to escape the workforce while you’re young. Traveling at age 22 is different than traveling at 35. It’s not ‘better’ or ‘worse,’ it’s just different. (If you become a parent during those intervening years, the experience is radically altered). This route allows you to experience freedom and escape at every stage of life, including your twenties.
This mini-retirement model has always been my preferred style, even before Tim Ferris popularized it in his book The 4-Hour Work Week.

#4: Permanent Semi-Retirement

People who are permanently semi-retired never level up to working 40 hours per week. That type of work schedule intrudes on their life too much.
Instead, the permanently semi-retired prefer to coast by, working part-time throughout their lives, but also enjoying ample leisure time which they can spend hiking, gardening, tinkering, and pursuing whatever hobbies capture their spirit.
Many of my friends fit under this category. One friend has never worked more than 25 hours per week, throughout the decade that I’ve known her. Another friend works “only side gigs,” two to three days per week, and stops as soon as he’s “cashed up” for the week.
When I lived in Australia, I spent two weeks at the beachhouse of a 40-something nurse who performed 2-3 house calls per week (one day of work per week), and spent the rest of his time surfing.
I highly recommend reading the entire post here: "The 4 Types of Retirement"

That's right Uh'mericah, paying for our sweet cribs, BBQ ribs and cornbread, and drinking and debauchery doesn't have to wait until our 60s! Phew! Retirement is really about deciding which path of the four above is right for you and planning for that. 

In my earlier 20s I was unknowingly saving for #1-Traditional Retirement because people say you should, but also living #3-Mini-Retirements because I wanted to (but didn't know that's what I was doing). Now, in my far wiser later 20s :) ... I'm actively working towards #4-Permanent Semi-Retirement because I love working (both on my creative endeavors/business, and new job), and also still saving for #1 because it still seems like a good idea to save. However, my next step in all of this 'retirement' planning is to decide on my goals for after I pay off my student loans, and see if I can become financially free (and perhaps) retire by 40...stay tuned!
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Which retirement type do you think is best for you and why?

Originally posted in Feb 2014




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