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What does it mean to be retired?

by retirebyforty on August 20, 2012 · 63 comments

in early retirement, goals and milestones

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early retirement definitionSo I quit my job in July to become a full time stay at home dad and call myself retired.  This bothered quite a few readers and they let me know their opinions. It seems many people define retirement as both partners completely not working anymore and can financially support themselves. This is pretty close to the traditional definition of retirement. Retirement means different things to different people and everyone is entitled to their opinion. I just want to share my perspective in a bit more detail. BTW, I appreciate all your input and enjoy the back and forth bantering so don’t hesitate to share if you don’t agree with me.

First, let’s look at the definition of ‘retired’ from the online Merriam Webster dictionary.

Definition of RETIRED

  1. secluded <a retired village>
  2. withdrawn from one’s position or occupation : having concluded one’s working or professional career
  3. received by or due to one in retirement

I’m going to focus on the underlined text. This is what the “retire” in Retire By 40 means to me. I left my six-figure salary engineering career because I was completely burn out. It’s analogous to a young basketball player retiring due to injury. Fire fighters, policemen, and other civil servants sometime can retire at 50 years old and receive a full pension. Young people retire from a career all the time. This might not be the traditional retirement from a career when you’re 65, but young people can retire too.

Both people not working

Some readers are stickler about both people not working. I don’t see why this is a problem at all. A married couple can be different ages and almost everybody stops working at a different times. Why does one partner’s employment status affect the other? As long as we can pay the bills and are not mooching off the government, I don’t think it matters if one person is working or not to call myself retired.

My parents are retired and my dad is still working part time in a micro business that he owns. My father-in-law retired with a full pension and he is working at a friend’s liquor store for free. One of my college buddies is financially independent, but he still needs to actively manages his portfolio every day. He’s not working for anyone and I call that a good retirement. People give up their main career and they still continue to work part time just for fun or to bring in extra income. It’s good to keep your mind active and work a bit to keep busy.

Finance

The biggest objection is due to the fact that we still depend on Mrs. RB40’s income to continue our current lifestyle. My passive income, online income, and freelance income covers about 50% of our monthly expenses. Mrs. RB40 is still working and her paycheck covers the rest and has a bit left over for savings. Our current residence is a bit expensive and while Mrs. RB40 continues to work, we’ll stay here. If she quits working, then we can move into one of our rentals or to a cheaper location. Yes, we choose to continue our current lifestyle for now because it’s more convenient for us. If our finances don’t work out in the long run, we will make some adjustments to our cash flow. I don’t think $3,000-$3,500/month is excessive, is it?

Stay at home dad

Lastly, becoming a stay a home dad/mom isn’t really retiring. I think most people who became a stay at home parent planned to go back to their career someday. I don’t plan to go back to engineering. That’s the big difference for me. I don’t plan to work for anyone else for the rest of my life. I’m working on this blog and other online properties for myself. When baby RB40 goes off to preschool, I’ll have more time to work on other self employment ideas. It’s true that I’ll still be working, but it’s on my own terms. I don’t have to do anything I don’t want to.

Conclusion

The truth is I’m not 100% retired. I can say that I retired from a career. I’m happy with that. I don’t think I’ll ever stop working completely so this is as close as I’ll get to a traditional retirement.

What does being retired mean to you? If you are married, do both of you need to stop working to be retired?


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{ 62 comments… read them below or add one }

William @ Drop Dead Money August 20, 2012 at 4:12 am

I’m retired. To me it means I get to do what I want, when I want and where I want (all within limits, of course).

Being able to do this, obviously requires having a means of living, in most cases a retirement fund. While we were working toward this blissful state :) we used to call it our Drop Dead Money, after a character in James Clavell’s novel Tai-Pan. This woman said she wanted a million dollars so she could tell her boss to drop dead, hence the term drop dead money.

I might work again if the right opportunity comes along. The Missus works because it’s with people she knew (and liked) before, and she just likes the structure. I’m blogging because I like writing and it’s a new and intriguing endeavor. Does that count for work? Does ANYTHING count for work when you do it because you like it?

So, Mr. RB40, what do you REALLY like doing? :-)

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retirebyforty August 20, 2012 at 1:33 pm

I like raising my kid. It’s great right now and I don’t think I’ll get bored anytime soon.
The Mrs. works because she likes to work. She like structure and organization. She won’t do well being self employed or being a stay at home mom. :)

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Nate August 20, 2012 at 5:52 am

I really like your analysis of retirement. I have come up with some personal definitions of what retirements would look like for me. Retirement = having enough money set aside or in passive income steams to cover 100% of my fixed expenses (and enough to cover most of the variable). In addition I don’t have to work for money BUT if I do it’s by choice and only doing work I want to do and when I want to do it.

Example – I am projecting to have enough money in the bank and passive income steams to cover 100% of my family’s expenses by the time we are 35 (hopefully!). If we decide we want a fancy new car – we may CHOOSE to do some creative work we enjoy towards that goal – but we would still be “retired”.

This is a nebulous term and I enjoy discussing it – thanks for bringing up the topic RB40!!!

Have a great day everyone!!

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retirebyforty August 20, 2012 at 1:35 pm

That’s great! 35 is a great age to get out of the workforce.
Thanks for your input. I like your definition.

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Roshawn @ Watson Inc August 20, 2012 at 6:52 am

The way most people define retirement sounds boring, at this point in my life. I would think people would want to retire to something. Otherwise, it is so easy to waste their lives.

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retirebyforty August 20, 2012 at 1:36 pm

I think it would be quite boring to retire to idleness. Most people I know found something to do after retirement and they are happy to be active.

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20's Finances August 20, 2012 at 7:49 am

I agree and share many of your opinions, Joe. Viewing retirement in the traditional way is just too boring, and quite sad really. Viewing retirement as something that allows working part-time or for yourself is a great to value life now. So many people talk about retirement as the thing that they do right before death… how sad…

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retirebyforty August 20, 2012 at 1:37 pm

Life is short so we need to live it to the fullest. Who knows what will happen in the next 5 years.

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fcob4 February 17, 2013 at 3:53 pm

I agree with this conversation. I am 37. last year I retired from a carreer that pushed me to work. 100 plus hrs a week. now i choose to work only half the year. so i dont use any of my savings. I actually still ad to it. I never thought that i would enjoy doing all the kid stuff. but in all reality i am loving doing half of it with my stay at home wife.

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retirebyforty February 19, 2013 at 1:09 am

Oh wow, 100 hours/week is pretty crazy. It sounds like you are having a great time. Enjoy!

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Kim August 20, 2012 at 8:43 am

When most people start a new venture, you often hear “Don’t quit your day job!” You did get to quit your day job. That has to wondefully liberating. Would it make you any more retired if you watched soap operas and game shows all day? I have two sets of neigbors who have retired more than once and moved onto new careers. You get to choose when and what to work on. That’s a great retirement!

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retirebyforty August 20, 2012 at 1:38 pm

Thanks for your input. Moving on to a different career or venture is almost a requirement these days. People don’t stay in the same career like they used to.

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Broke Professionals August 20, 2012 at 8:51 am

When I left TV news to stay at home with my kids, I said I was “retiring” from the industry. I still work, but I also think using that word – retired – to explain how I will never, ever go back to my old career more clearly gets the finality of my point across.

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retirebyforty August 20, 2012 at 1:39 pm

That’s exactly my point of view. I don’t plan to go back to my old career so that’s retired to me.

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Chase Miller August 20, 2012 at 9:24 am

Retiring to me is having enough passive income to live comfortably off of and then working in any way I wish for money or not for money.
Chase

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retirebyforty August 20, 2012 at 1:40 pm

That’s great. Some people make a distinction between retirement and financial independent, but they are very similar.

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Aaron August 20, 2012 at 9:26 am

I would have to agree with you – retiring isn’t dependent on your spouse or that you completely stop working. Retirement is really dependent on each individual and their needs/wants. My older brother retired at 50 from his “career” job but regularly works part time at jobs that he wants to – not because he has to. Having the freedom to do as you please and not be tethered to the “man” is retirement.

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retirebyforty August 20, 2012 at 1:41 pm

Thanks for your story. Not working for the man is very liberating. :)

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Michelle August 20, 2012 at 9:26 am

To me, it would be hopefully both of us not working. And I would have passive income to rely on with good retirement savings.

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retirebyforty August 20, 2012 at 1:42 pm

That’s good too. I assume both of you don’t like to work all that much. What if your partner likes work and doesn’t want to leave his career? :)

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Michelle August 20, 2012 at 2:42 pm

Haha we both don’t like to work so we would be fine with being lazy :)

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Mr. Everyday Dollar August 20, 2012 at 9:29 am

I think most people think of retirement as white shoes, shuffle board, and pants hiked up well past the waist. And drawing down the 401(k) to $0. That is the traditional view of retirement.

For us looking to retire early, it means being able to support our lifestyle with passive streams of income. Whether that means with stock options, bonds, CDs, REITs, rentals or a combination of them all, when we successfully do that we have effectively retired.

But let’s be serious. Anyone retiring early – in their 40s or 50s – is not going to sit around for the next 40 years and never lift a finger. Maybe we volunteer, maybe we work part time, maybe we do odd jobs, maybe we write a book. But we’re going to be doing *something* and that something may produce income.

If Joe is able to cover 50% of the family expenses while not working, I’d call that retired.

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retirebyforty August 20, 2012 at 1:44 pm

That’s right. People in their 40s, 50s, and older have a lot of energy and drive left. I doubt they are the type to sit around all day if they were able to retired that early. We just have more choices on what to spend our time on.

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Crystal @ Prairie Ecothrifter August 20, 2012 at 9:36 am

I think retirement for me is when I am financially free and am able to do what I choose. So I could volunteer more, continue side hustles, etc, but if it is my choice 100%, I am retired. As for both spouses needing to be retired for it to count, I would consider that a bonus. My husband and I will probably retire at the same time – when we no longer need to work. But we are not an entity and not all couples save for retirement jointly, so I think it is very possible for one spouse to retire before another one.

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retirebyforty August 20, 2012 at 1:46 pm

You’re pretty close to your definition then, right? I guess you are still working tons of hours, but you’re doing it because you enjoy it. I suppose if you’re more financially free, you can cut back a few hours.

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Lance@MoneyLife&More August 20, 2012 at 11:02 am

Being retired to be involves financial independence and not having to work anymore to get by. I do plan on having side businesses and working for myself but if I must continue running those side gigs to survive I wouldn’t consider myself retired.

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retirebyforty August 20, 2012 at 1:47 pm

That’s a valid point. What about people who are 65 and still need to work 15 hours/week to make ends meet? Do you think they are retired?

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Early Financial Freedom August 20, 2012 at 11:25 am

I am with you!

To me, financial freedom, a.k.a., early retirement is

-Eliminating the money being the #1 factor for any financial decision
-It is having options/choices in ones life as to what to do for the rest of your life
-It is not being chained to a job from 9 to 5

With this logic, it is not necessary to be rich to enjoy life. One could be financially independent on a relative small annual budget, but may not be considered rich by society, yet enjoy life to the fullest.

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retirebyforty August 20, 2012 at 1:48 pm

Not being chained to a job is the biggest factor for me. I can choose to do what I want and it is liberating. We are not rich, but we are enjoying life. We can pay the bills and don’t have any consumer debts. That’s better than a lot of families.

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Don August 20, 2012 at 11:26 am

As someone who works in technology (software not hardware), someday you’ll have to mentioned the long hours of constant thinking and headaches at the end of the day…

There will always be those how don’t understand… besides it’s not like you aren’t working, you just shifted from being an employed servant (me currently) to an online entrepreneur and a real estate investor! :)

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retirebyforty August 20, 2012 at 1:50 pm

The long hours really did a number on me. My eyes do not work well after staring at the monitor for a long time and the headaches didn’t help. The stress didn’t help either.

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Kathleen @ Frugal Portland August 20, 2012 at 12:30 pm

Retired, to me, sounds like: waking up between 4 and 5 am, reading the paper, doing the crossword, calling your friends, baking a pie, watching TV…

No, you’re right. Your version is far superior.

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retirebyforty August 20, 2012 at 1:51 pm

That’s what I thought when I was in my 20s. Now that I’m older and know more retired people, I know that’s not what people do. Retiree keep themselves busy and life is better that way. That old definition of retirement is really for when you can’t function as well anymore.

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jefferson August 20, 2012 at 4:30 pm

it is pretty admirable really that you are going to get enjoy “getting out of the grind” before your body breaks down.. most folks (myself included) are on a trajectory where by the time we reach the point where we have total freedom, we will have bodies that are broken down..

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retirebyforty August 21, 2012 at 7:52 am

That’s why I left the work force early. If I stay employed, my health would continue to deteriorate. Being self employed at a slower pace for a while is a good way to recover.

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krantcents August 20, 2012 at 4:56 pm

Retirement or financial freedom provides choices. You get to make the choice! I plan on doing something in retirement which means I may volunteer or work a few hours a day. It is my choice. Some teachers retire after 40 years and receive nearly 100% of their salary and still do substitute teaching for a variety of reasons. They are retired, but made a choice. It is your choice.

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retirebyforty August 21, 2012 at 7:53 am

It’s great to have choices. So many people are trapped because of their spending habit.
I think most people prefer to stay active when they first retire.

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zolar August 20, 2012 at 5:12 pm

Hm.. retirement for me is not working at office and being scold by boss.. hehehehe..
need a retirement planning but maybe not as fast like you..

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retirebyforty August 21, 2012 at 7:53 am

I never liked being scolded. :)

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Darwin's Money August 20, 2012 at 7:47 pm

I’d say given what you left behind, you retired (as long as you don’t go right back LOL)! You’ve shared your income reports and clearly, there’s a dramatic dropoff in pay between your day job and blogging at this point. You surely qualify in my book!

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retirebyforty August 21, 2012 at 7:55 am

I’ll need to go back to school first if I want to go back. My knowledge will be outdated in a few years. I think I’ll be fine with self employment and will avoid big companies in the future.

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frank August 21, 2012 at 6:38 am

I’m “semi-retired” but my wife has not held a full time job since 2000. She only works for me a few days here and there semi-weekly. I work 25 hours a week. Now to me, that makes me more retired than by the definition of a wife supporting you.

I too was burned out – but I found a career I loved and now don’t view “work” as troublesome anymore.

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retirebyforty August 21, 2012 at 7:56 am

Sure, I can see your point of view. It’s great that you found something that you love.

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RichUncle EL August 21, 2012 at 7:55 am

Retirement does not imply plural. So I agree with you that you define the word because you left your career. I do not understand why people have to be bitter and comment negatively. You are retired and your wife is not. When you wife decides she wants to quit her day job then you are considered a retired couple which is way different.

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TM @ Young and Thrifty August 21, 2012 at 4:20 pm

At the end of the day you gotta do what makes sense for you right Joe? I mean looking at your diversified income, I wouldn’t be too worried about “quitting my day job”. Any plans to increase your real estate portfolio and use some of that extra time to streamline your rental process and outputs? Good for you for living the dream buddy. Right now my common law wife is just finishing up her school, and I’m definitely considering taking a little sabbatical in a couple of years to finish up a Master’s degree and maybe expand on some other projects when she enters the workforce. She understands that right now she gets a pretty sweet lifestyle, and when I need a break for a year I’m sure she won’t begrudge me that as she is absolutely chompin at the bit to get into the workforce. I won’t be retired, but I’ll join your type of lifestyle for a little while anyway!

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retirebyforty August 22, 2012 at 3:32 pm

It would be great for you to take a couple of years off to finish your Master’s degree.
Mrs. RB40 did that, but couldn’t really stay out of the work force. She likes working and got some internships during her study.
Those opportunities were great because she could try out a few jobs and found one that she liked.
Do you have kids?

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Buck Inspire August 22, 2012 at 1:28 am

Retirement is having the freedom to do what you want, however Mrs. RB40 isn’t retired. Not sure why other people are upset at your definition. Perhaps they are in situations not as ideal as yours? Anyway, enjoy your retirement, but make sure the Mrs. is still happy at work. You can’t have all the fun. :)

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retirebyforty August 22, 2012 at 3:34 pm

Perhaps. :)
Mrs. RB40 tells me she is grateful for me to stay home and take care of our son. He is doing very well and we are very happy with this arrangement.

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nicoleandmaggie August 22, 2012 at 9:18 am

So technically, the people who study retirement do not have a traditional definition of retirement. They divide it up into “self-defined retirement” and “Not in the labor force.” There are also some bizarre mixed definitions that people will use for specific purposes (like, “having worked at a career job that was at least 40hrs/week for 10 years, then not working more than 10 hours a week for at least two years and not considering themselves unemployed”)… but for the most part, there’s no agreed-upon definition.

Note that SAHD are more likely to define themselves “retired” and SAHM more likely to say they are “keeping house” in the same surveys, even when they look identical otherwise (there’s some sociology papers on that specific topic).

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retirebyforty August 22, 2012 at 3:37 pm

I like “Not in the labor force.” :)
Thanks for your input. The bizarre definition probably works for me too.
That’s what I noticed about SAHM who commented. They don’t like to be call “retired.” :) That’s OK with me.

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Keri September 6, 2012 at 7:39 pm

It’s really not about (well, okay, not for me!) not wanting to be called “retired” – it’s more that society in general does not think of SAHMs as “retired”, but seem to be okay with a man calling them such. That is really at the core of my not really thinking of you as “retired” since you still rely so much on a spouses income. It mostly seems to me a warped perception that would be nice to change so stay at home parents can call themselves whatever they want and not have to deal with idiot opinions (and I suspect a lot of fathers would rather use “retired” so they aren’t looked down upon like many mothers are).

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RetiredSyd August 26, 2012 at 7:58 am

My husband retired four years before I did. And we did need my income to live on and save for my eventual retirement. Now I’ve been retired with him for the last 4 years. Does that mean he wasn’t really retired before I was retired? I don’t think so. He just retired before I did.

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retirebyforty August 27, 2012 at 11:57 am

Thanks for your input. I don’t understand why a couple have to retire together either. We are not a Siamese twin. :)

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Keene August 27, 2012 at 8:49 am

I retired early nearly 18 years ago. For five years it was retirement love at first sight. Then I found myself as my wife’s caregiver. Since then I’ve had tons of time to ponder what retirement really means and how one can plan for life’s random assignments. My blog, “Can you really retire?” covers finances, of course. But I found that what you DO in retirement is more important than finances. You are well ahead of the game by asking the questions you’ve raised here.

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retirebyforty August 27, 2012 at 12:09 pm

Thanks for your input. I think having an active retirement is much better than just taking it easy all the time. It keeps your mind and body active. I’ll drop by and check out your blog.

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ed August 30, 2012 at 7:09 pm

At 48, I’ve got a decent nestegg saved up, but am the sole supporter of a wife and kids. I’ll be down to one special needs child in a couple years time after tossing the last of the soon to be high school graduates to the wolves (i.e. he’s gonna support himself whether he likes it or not)

All that said, I don’t see retirement happening due to health insurance more than anything else. Seems to me health care is one thing that’s going to force one person to carry the cross of bread winner, unless you’ve found a cheap way around that problem, which I’d love to hear. I don’t see one and while I’d accept the get sick and die plan for myself, I don’t see that being fair to those who depend on me to accept the same risk for themselves.

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retirebyforty August 31, 2012 at 8:42 am

You are right. There are no good options when it comes to healthcare.
I wrote a post about it – http://retireby40.org/2012/05/healthcare-early-retirees-selfemployed/
The only good options are taking up a part time job with health insurance coverage or moving to another country with public healthcare (Canada for example.)

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ed August 31, 2012 at 12:47 pm

See, I knew you’d covered it.

We just got the bad news for next year. I’m not crying but the magnitude of how much worse the man offers me every year is staggering. The good news if any I suppose is that the difference between what the man offers me and what I can get on my own privately is getting closer to 0.

So, paying $700/month for the family, will only go up 3% next year.

The old plan, standard $20-$30 copay, deductibles for individuals and family, out of pocket limits, the usual.

New plan, 100% copay until you hit your substantial deductible, levels for individual & family. Then, you get a treat of a copay of 20% of the overall bill, if you use in network resources.

This is known as sharing the costs more fairly. Seems to me a very one sided view of who is sharing the costs going forward.

So, yes, we’re guaranteed coverage and have preexisting covered, but other than that, seems like corporate america really just wants their folks to petition the government for socialized medicine.

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retirebyforty August 31, 2012 at 11:39 pm

Sorry to hear about the increase. $700/month for an employer sponsored plan is not a very good deal. That is almost as much as buying it yourself, right? I think $700/month is about how much it cost for a family of three.
I wouldn’t mind paying more tax in exchange for basic health care. It’s ridiculous that health care is tie to a job and how many people go bankrupt due to health problems.

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ed September 1, 2012 at 1:51 pm

I’ve never really tried to buy it privately – only pretend shopped on the web from whoever would offer free quotes which seems to be primarily einsurance.com as I recall – and one never really knows what they’re getting in such a situation until they really pull the trigger. But, yes, as you suggest the prices they quote are not much worse, if not actually cheaper, than what I’m paying now. Did I say I work for a large much hated financial institution? One that made extremely horrendous decisions at the upper management level and now seems to think the rank and file is the ones who should pay for their screw ups . . . In the past year my pension has been canned and now my health insurance has been gutted and I’ve not had a real raise in how many years, and my bonus if I get one doesn’t match inflation . . . my health situation is delicate with a special needs child, and so the burden is great. If it weren’t for that I’d consider not having any at all, or just covering for the worst case mostly for the Misses. I can live with the get sick and just finally die already approach.

I love your sight and envy the guts behind your choices.

Mary September 4, 2012 at 9:12 am

My boyfriend “retired” Feb 1, 2012. I say “retired” because he was laid off from his job at a software company. He asked for this lay off, for many years in fact, but he was such a good worker he was never caught up in one of their “re-balancing” situations. Finally, his manager did need to “re-balance” and gave him is wish of being laid off. He has been getting unemployment and applying for jobs, Nothing so far but he does have some money coming in. Bottom line is he is financially ready to retire anyway (he is 57) so if nothing pans out he will be fine.

I “retired” on August 31, 2012. I am 50. My boyfriend and I live together, so we are both “retired” at the moment. We both know that retirement means whatever each individual wants it to mean. Our house is paid off and I have a good nest egg, but not enough to never work again. But I was like you, feeling sick at work – literally – and seeing no end in sight. I left my company (which was also a software firm) in good graces, they even gave me a retirement party, and there is an offer to take me back if I choose to go back. But I needed the break, the time to relax, de-stress, think about the rest of my working life — and my life in general. You just don’t have time to do that when working, at least I didn’t seem to have that time. Health insurance is COBRA for now, expensive but I planned for that. We have no children.

It was my boyfriend who sent me the link to your blog, and I’ll check in now and again. It is my first week of retirement, the first time in nearly 30 years of working that I have taken a large chunk of time off. I expect to have up and down days as I de-stress and play with ideas for a future income stream. Maybe I should have set that up before?

Anyway, thanks again for your great blog. We live in Tualatin, Oregon and share the same beautiful weather with you…isn’t September weather grand here?

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retirebyforty September 4, 2012 at 2:39 pm

I asked for a lay off too, but they wouldn’t let me go. :(
Thanks for sharing your story.
After a few months, perhaps you can look into doing something that will make you happy.
I’m sure you can work part time, pursue your interest, and make a bit of income.
There is life after a software engineering job. I’m sure you will survive just fine.
September is the best month in Oregon!

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