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Create Your Ideal Retirement

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create your ideal retirement

Life has been so busy lately that I haven’t had time to read much, but now that things are getting a bit better, I can catch up with a few blogs. Earlier this week, I read What is the ideal retirement at Free Money Finance? and it gave me the incentive to write more about this topic. Basically, we are living much longer these days and the old model of leaving work at 65 and enjoying a few years of idle retirement doesn’t work well anymore. The Baby Boomers will spend much more time in retirement and the following generations can expect to do the same.

Our parents (Boomers) are figuring out ways to retire differently and that’s great because it will give us some examples of what to do. I know that I don’t want to quit working at 65 and then lounge around the pool for 20+ years. Baby Boomers are still healthy at 60 and they want to continue to contribute to society.

Here is the list of 5 things that makes a great retirement according to the original article at TIME.

  • Financial Freedom – The key is to be able to pursue your passion while having enough money to live comfortably. For some this can mean working in a job you enjoy.
  • Purpose – You need a reason to get out of bed. Life is boring if you don’t have a purpose.
  • Good Health – You need to be healthy to enjoy your retirement.
  • Close Relationships – Retirement is more fun when you have some people to spend time with.
  • Giving Back – Help the world become a better place and set a good example for the younger folks.

Retirement really needs to be divided into at least 2 phases. The first part is when you’re healthy and active. The second part is when you’re ready to relax. For Boomers, they can retire in their 60’s and spend a good decade or two living a more active retirement. As their health deteriorates (depressing to think about), they can transition to a more idle retirement.

My Ideal Active Retirement

The active first phase of retirement is what we don’t have a good word for. I’ve heard semi-retired, pretired, second act, and more. This is the “ideal retirement” I am striving for. We’ll be healthy enough to enjoy life and do the things we love. The second part of retirement will be relaxing and a bit boring, but I think we’ll be ready for it when we’re 75. I’ll worry about that part later.

So to get to the ideal retirement, here is my plan for those 5 things.

  • Financial Freedom – I saved and invested through my 20’s and 30’s and built up a moderate retirement portfolio. In my 40’s, I left the stressful corporate job and became a blogger/stay at home dad. I make just enough money to live on without having to dip into our retirement accounts.
  • Purpose – This one is a little tough. Being a stay at home dad will keep me busy for a long time. The blog is great, too. I’m still having fun and it’s a great way to connect with like minded people.
  • Good Health – I’m still young, so my health is not too bad right now. I am trying to get back in shape so I will stay healthy as I age.
  • Close Relationships – I have a good relationship with my immediate family. I think the big change would be when Mrs. RB40 retires. We’ll see how we deal with that when the day comes. It’s still a way off so I’m not going to worry about it yet.
  • Giving Back – This one is very difficult for me. I’m not very good at giving back and I will need to find ways to improve. For now, I just communicate through this blog and give some hope to all the cubicle dwellers out there. Once I have more time, I need to do more local projects.

I feel like I’m living my ideal retirement right now. It can get a bit hectic sometimes, but I think once we sell our rental, life will be a little simpler. These days, I work on the blog a few hours per day and then enjoy the rest of the time with my active 3 year old son. Sure, more money would be nice, but we are quite comfortable with our level of spending at the moment. I can see myself doing this for 20+ years, but who knows… I might get bored of blogging at some point. I’m sure I’d find something else to do, though.

The bottom line is you need to create your own ideal retirement. When a retiree is still young and healthy, he/she should be more active and even work a little bit. Life is really more enjoyable when you’re a little busy.

What do you think? What’s your ideal retirement? Do you think it should be split into 2 parts like I proposed?

See how my Exit Strategy worked out after 1 year.

Photo credit: flickr ALL CHROME

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{ 33 comments… add one }

  • Pretired Nick March 26, 2014, 2:19 am

    As the internet’s leading advocate of pretirement, you know I love this! My goal is just to get people to acknowledge that there IS such a stage to life. When the classic company pension died, the years spent working suddenly had no relationship to when you could pretire. Now it’s just about how quickly you can accumulate enough wealth to buy your freedom.

    • retirebyforty March 26, 2014, 9:51 am

      You don’t even need a huge amount. You just need enough to supplement working at something you enjoy. Now there are many ways to retire from a stressful job.

  • jane savers @ solving the money puzzle March 26, 2014, 5:41 am

    I am planning financially for the fun part and the part where I may need care. The entire reason behind my financial planning is so I can enjoy the first part of retirement when and where I want to.

    My father retired at 57 and the time, until he and my mother turned 70, was filled with everything that they wanted – golf, long drives and teaching the grandchildren to swim. After 70 the health for both of them took a serious downturn and that has restricted everything they do.

    I will retire at 59 or 60 and live as much as I can while my health is good.

    • retirebyforty March 26, 2014, 9:53 am

      Thanks for sharing. Hopefully, we’ll all stay healthy into our 70s, but it’s hard as you get older. You parents had a great retirement.

  • Justin @ Root of Good March 26, 2014, 7:08 am

    As for #5, giving back, don’t be so hard on yourself! You’re sharing a lot of good advice here to encourage and enable others to intentionally craft the life that they want. No one said “giving back” has to be donating blood or washing dishes at the soup kitchen.

    • Jay Cup March 26, 2014, 8:51 am

      I agree on #5, I think you should consider this blog as a large part of fulfilling that ‘Giving Back’ goal. This blog is helping thousands of people reach their goals of financial freedom and have a peace of mind during retirement, myself included!!

      • retirebyforty March 26, 2014, 10:07 am

        Thanks for the compliment! It’s great to hear that I’m making a difference.

    • retirebyforty March 26, 2014, 10:04 am

      Thanks for the encouragement. I still think I need to work on it. It’s difficult to see how the internet impact people’s lives. I really should do more locally.

  • EscapeVelocity2020 March 26, 2014, 7:47 am

    I think Gen X and beyond will define a new phase where we transition from the traditional ‘money-centric’ career phase to a new ‘balancing passion and money’ phase (blogging, home renovation, eBayer, tour guide, YouTuber…), then the Boomer active but have FU money phase, and then hopefully a very short ‘been there, done that, drop dead’ phase. This is in the back of my mind as I see how my kids naturally gravitate toward being online during ‘downtime’ / free time (when not pushed outside or structured activity).

    • retirebyforty March 26, 2014, 10:05 am

      Thanks for sharing your thought. The drop dead phase doesn’t sound like much fun at all. 🙂 Hopefully, we can minimize our kid’s online time, but that’s probably unavoidable now.

  • aB March 26, 2014, 7:49 am

    My parent’s are more busy in retirement than when they were working.
    Different dancing groups every day, and some steady volunteer work.

    Made me smile when there was a holiday on a Monday, and my mom was happy that she could take a rest, but my dad was sad they were going to miss a day. Schoolkids!

    • retirebyforty March 26, 2014, 10:07 am

      That’s great! That’s the ideal retirement. You have to be busy and active to enjoy life. I’m really busy these days too. How did I ever find the time for a regular job?

  • Done by Forty March 26, 2014, 9:00 am

    Joe, I completely agree with the idea of a less active retirement late in life. My mother is going into that phase now, which is the source of some consternation and confusion for my family. We want her to be more active, but, you know, she’s 68 and kind of wanting to relax around the house more.

    • retirebyforty March 26, 2014, 10:08 am

      Why is it causing consternation? Is she gaining weight or something? Being active is great, but when you’re getting to that age, you might want to just take it easy. 🙂

  • Mr. Utopia @ Personal Finance Utopia March 26, 2014, 9:17 am

    Splitting retirement into 2 parts makes sense to me. I think when most people envision how wonderful retirement will be, they’re thinking of the 1st stage and not the 2nd. The 2nd stage will inevitably arrive, but it’d be nice to maximize the time spent in the first part whether by retiring “early” or by taking the steps (managing retirement funds well, staying in good health) to be there as long as you can.

    • retirebyforty March 26, 2014, 10:09 am

      Maximizing the first part is the way to go. Why wait until you’re 70 to retire? You won’t be able to do much and it will be a huge adjustment.

  • EL @ Moneywatch101 March 26, 2014, 9:43 am

    My ideal retirement is to travel and to spend time with family. In addition to this I will fill time voids with projects and volunteering. Giving back is important, and if you can’t do it with time right now, then do it with surplus money.

  • jim March 26, 2014, 11:13 am

    Did you notice the woman in the black jacket in the photo is flipping the bird?

    • retirebyforty March 26, 2014, 11:15 pm

      I thought it was pretty funny to see an old lady do that, but you’re right. I edited it out now. 🙂

  • IWRN March 26, 2014, 12:54 pm

    Hi Joe,

    I totally agree with you. I am completely sick of my corporate job. I tend to question myself every day… Why do I need to stick with my job that I totally hate???

    Well, my wife and I are about to retire. If we are not able to retire next year, we will retire by 2016 for sure. I have been planning my retirement finance for a while and even came up with a retirement calculation model. My main concern is how we can sustain our spending ability considering inflation (2 to 3%) and the healthcare cost. I also target our retirement income around $5000 a month just like your target. I believe that we can reach the target but don’t want to heavily rely on the stock investment (stocks, mutual funds, ETFs, etc.). We really need to come up with fixed income somehow to stabilize our retirement life.

    You also mentioned in your blog that you would want to sell your rental property. I am in the same boat. I have 2 rental homes but barely earn 3% of the actual values. The management company charges me here and there. And I have to be responsible for HOA, insurance, taxes, etc. The housing market seems to be upward now. So I am just waiting to sell those rental homes within a year or two.

    Your idea and view definitely help me plan our retirement. And I am glad that someone in the same boat actually had retired from the stressful corporate job and enjoys life after retirement.

    • retirebyforty March 26, 2014, 11:17 pm

      Good luck with your retirement! A job you hate just doesn’t work out in the long run. It’s just so much additional stress.
      Yeah, the rentals are just too much work for me right now. I’ll just take profit for now and get back in later once the market crashed again. Thanks for reading. I’m really glad to hear that Retire by 40 helped you with your retirement planning.

  • Bryce @ Save and Conquer March 26, 2014, 4:59 pm

    My ideal retirement will be to travel and lounge around the pool. I do think it’s important to have close relationships not only with immediate family, but with extended family as well as close friends.

    • retirebyforty March 26, 2014, 11:21 pm

      Yeah, I need to work on my extended family. They are all in Thailand so that’s tough. Close friends is tough too. We live so far apart these days.

  • Dividend Mantra March 26, 2014, 4:59 pm


    Great post here. I think you have a great retirement planned. And the fact that you know what you want and have it mapped out puts you far ahead of most.

    I think TIME actually nailed it on their list of the five factors there. That’s a great list, and that list is always at top of my mind when I think about what financial independence/early retirement looks like for me.

    Best wishes.

    • retirebyforty March 26, 2014, 11:21 pm

      Thanks for the complement. I think TIME had it right too. We need to be active and enjoy our retirement while we can.

  • No Nonsense Landlord March 26, 2014, 6:25 pm

    As I count down the final two years of working a real job, I am getting excited to think about retirement. I have been looking at RV’s, might tour up to AK and around like a nomad for a few years. Heading back home every 2-3 months.

    • retirebyforty March 26, 2014, 11:22 pm

      If I do the nomadic thing, Mrs. RB40 will stay home. 🙂

  • No Nonsense Landlord March 26, 2014, 6:31 pm

    Another comment…

    Why sell the rental? Keep it. If you have to do a 1031 exchange, buy the new property, fix it up by expensing all of the upgrades as much as you can. Then, when you move it, it’s all ready.

    New paint, appliances, flooring, etc. can all be expensed via Sect 179.

    If you need some rental advice, or tips, visit my blog. I am making a ton of cash from my rentals.

  • john March 27, 2014, 1:56 pm

    I retired on March 7th….hit the trifecta – 1. retiring 2. my birthday (I turned 58) 3. Friday. Perfect! I may end of doing a bit of consulting work (the missus “retired” last year but has been doing some consulting work as an Executive Coach.

    Have been actively saving and investing for retirement since I was 25, and got to a point where it made financial sense to step off the merry-go-round.

    • retirebyforty March 27, 2014, 3:05 pm

      Congratulation! You should work a little bit to ease the transition. It can be jarring. Enjoy your retirement! 🙂

  • Tom @ FinanceandFlipFlops March 27, 2014, 3:16 pm

    Given my propensity for changing cities / countries every couple years, I’d have to say my ideal retirement would probably be having the ability to move to a different country and just take in the culture for a couple months (if we decide we don’t care much for the place) , a few years, or even forever if we really like it.

    I’m actually starting to think this may become an integral part of our retirement – seeing as how we don’t have a problem moving to a place like Mexico, Panama, Honduras (Roatan), etc. we could let our passive income keep piling up since our cost of living would be much lower than if we were living in the US or Europe.

  • Erin @ My Alternate Life March 28, 2014, 3:58 pm

    My ideal retirement is pretty close to what I’m doing now — writing, reading, hanging out with my husband, and traveling relatively regularly. Of course, if I was actually retired, I’d probably take a bit more down time and be a little pickier with writing gigs. That said, life is good and I’m happy 🙂

    • retirebyforty March 30, 2014, 11:48 pm

      Nice. It sounds like you’re in a great place right now.

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