The Dark Side Of Retirement

A few months ago, I wrote a column titled Retire Smart, Not Sorry. A friend who read it just sent me a Reddit post (by SPACE-W33D) as it was along the same lines and requested me to share my views. So here goes.

The very provocative headline—My Fire Journey: Wife called me “Loser”—was elaborated by the Reddit handle putting forth his very interesting (and privileged) circumstances. Here is a snapshot of his life:

• 41-year-old, male, married, recently retired.

• $2 million liquid assets, $650k retirement.

• $75,000/year royalty from a business I sold, $125,000/year in income off my liquid assets.

• Wife is a school teacher, good for healthcare.

Since November began, it’s cold and dark early so I play GTA, a video game. Wife came home early today and I’m stoned in the middle of a conversation with my GTA online friends. She told me I’m becoming a “loser” and “I’m too old for this”.

I make dinner, clean the house, paid for our nice house, and make twice what she makes as a school teacher from my assets and royalty income. What is the problem if I want to get high and play video games when she is working? I admit it’s immature but we don’t have children. I just want to chill after working a stressful job for 15 years. And there’s not much else to do in the winter. We take nice trips across the world in the summer when she’s taking time off.

Early retirement does not fit well in this society.

Well, here’s what we can learn from his experience.

Understand What FIRE Is

Since he mentioned his “FIRE journey” and commented that “early retirement does not fit well in this society”, let’s look at that. FIRE is an acronym for Financial Independence Retire Early. However, it represents two different statuses that should not be conflated.

Once you have a corpus to sustain your lifestyle, you have achieved financial independence (the FI part). It does not automatically mean that you have to retire from the work force (the RE part). It just means that you now get to choose whether to work or not, where to work, and what kind of work. It is more about living on your terms now.

Identity Matters

Despite the headline he went with, she did not call him a loser. In fact, he elaborated that her exact words were that he is “becoming a loser”. She does have a point. He was exhibiting behaviour that was not productive and could be viewed as unhealthy over a long period of time should it become a habit. He admitted that he was high and playing Grand Theft Auto (GTA). There is no problem, until it becomes addictive and a way of life.

His wife was accustomed to a hardworking individual who accumulated huge amounts of money, working at a stressful job. He claims that he founded and sold a business. This is someone with focus and ambition. So now, at the young age of 41, to see that individual evolve into someone unrecognisable is a jolt of sorts. His wife was seeing a side of him she never knew existed. Assuming he lives until 80, he still has four decades to navigate. And is he going to be “chilling” by getting high and gaming?

It Is Never Only About Money

Author Nick Maggiulli has said that money in itself does not command respect. How you obtain it and what you do with it does. Imagine you meet a self-made millionaire and a lottery winner. Which one has a higher status? It’s obvious. One of them built their fortune while the other just got lucky.

Similarly, money is never the sole criteria when it comes to retirement.

Are you planning to quit working altogether and indulge in hobbies, such as gardening, cooking, travel, and volunteering for a cause you feel passionate about? Be sure to ask yourself what it is that is driving you. If it is just a dislike for your job and the lack of fulfilment, maybe a thoughtful career change would do the trick. If the long commute and city life are wearing you out, would you be open to relocating?

It is tempting, but incorrect, to view it as a pendulum swinging between two extremes—either you are retired, or not. In practicality, it may be a scalable project as you may decide to transition gradually into retirement. From a full-time job, you may go part time. Or, you may make the switch from being an employee to a consultant? Or, even explore with a new career.

The point I am making is not to assume that the only way out is kicking up working altogether.

Retirement Isn't The Destination

In the above example, the husband apparently viewed retirement as a destination, while the wife viewed it as a new phase in their life.

Retirement is not a destination, and certainly not a “happily ever after” reality. He is clear that he has retired from a stressful professional life, but what has he retired into? That is lacking in clarity, purpose and meaning. He now possessed financial freedom, but did not possess vision or motivation.

You have to plan through it. Building up a retirement corpus is just one aspect. Figuring out your life and how you plan to spend your time is the other. It would be a shame if you attained the financial independence to enable an early retirement, only to be confronted by an existential crisis.

Communication Matters

Everyone has their own idea of what retirement entails. The problem is when individuals with different ideas live under the same roof and share the same resources.

This can cause a lot of friction, hence frequent communication is mandatory. Issues on how to spend time, how to obtain a cash flow, the magnitude of the cash flow, the lifestyle aspirations and spending patterns, and the bequest plans, need to be sorted.

Retirement is not one dimensional, depending only on a corpus amount. One’s social, emotional, mental, physical and financial health need to be approached holistically. Your life still has to have meaning after retiring. So, figure out what you value in life before you retire.

Your post-retirement lifestyle will come from a pre-retirement kitty and pre-retirement planning. So, one has to really think about planning through retirement, not to retirement and then starting all over again.

By Larissa Fernand, Behavioural Finance Expert