Traditional retirement planning does not work for most of us. It focuses too much on things we cannot control like the investment markets and the economy. It presents us with two crappy options: settle for less now so that we can save more, or plan to settle for less later.
Harry Coleman examined these options and picked, “None of the Above!”
Coleman enjoyed his successful career at a large consumer company and loved his co-workers. But he wanted more out of life, which he determined was divided into three buckets: work, giving back and goofing off. Although he loved his work, it was too large of a bucket in his life. He was ready for a better balance between the three. So, at age 51, Coleman decided to leave his successful corporate career and “retire.”
Retirement, Semi-Retirement or Something Completely New?
Coleman is a great illustrator of the growing trend of baby boomers who are rejecting the traditional view of retirement and charting their own course. This new class of “retirees” is rewriting the rules of retirement by leaving traditional careers earlier and living a more balanced life divided between part-time work, serving others and enjoying their family.
How He Got There:
Coleman credits four things with positioning his family to “retire” so early.
- Valuing experiences, not things. He and his wife lived comfortably, but modestly, over their thirty-year work life. They never had the newest things, but never really missed them either. Even now, Coleman drives a 2003 minivan. This mindset helped them focus on people and community rather than shopping and consumerism. Whenever Coleman received a raise or bonus, it went towards paying down debt and savings. The result? A modest lifestyle they enjoy and savings ample enough to provide for it whether they work or not. He won’t give a number, but they have enough savings and investments that they can live off ~3% of their assets per year.
- Finding a Trusted Advisor. Although Coleman was smart enough to create his own plan, he was also smart enough to get help. When I asked him why, he said, “I didn’t want to screw it up. It was worth the cost to hire an expert to help guide me. It lowered the stress level in my life and gave me assurance that I was making good decisions.” The plan they created did not depend on Coleman working. This extra margin of safety has given Coleman and his wife more options. Any income he earns now allows them to travel more and take one really nice trip a year.
- Keeping Ample Cash Reserves. In 2007, Coleman and his wife started their retirement journey heading into the perfect financial storm. Their timing could not have been worse. Just as the markets were crashing, he quit his job, built a new home – while still making payments on his old home. He saw his portfolio lose over 25% of its value. He says he was able to weather this financial tsunami because he and his financial planner had built flexibility into his lifestyle – and enough cash reserves to stay afloat. In addition, he and his wife had always lived comfortably but never extravagantly. When the storm hit, they were able to lower their spending until the markets calmed down.
- Retirement Doesn’t Mean You Stop Working. Coleman works because he wants to. Remember those buckets? When he retired, he did not empty his work bucket; he just stopped it from overflowing into the rest of his life.
Coleman works with a number of firms that hire contract labor for special projects in his area of expertise, as well as participates in general assignments like study groups. He is able to pick and choose his assignments as he wishes, based on his schedule, interests and need for cash. He credits his continued work with more than financial security. He also gets a great deal of mental and physical engagement from his efforts. Although he planned financially to have the option of not working, he never thought he would stop cold turkey. He always knew exclusive leisure would not be fulfilling enough.
Coleman, now 57, continues to enjoy his flexible lifestyle. He works when he wants to work. He and his wife volunteer, regularly go on mission trips, and they take one nice vacation a year. And his buckets? “Currently they are allocated about 25% work, 40% volunteering and 35% goofing off.”
[Tweet “At the end of the day, it’s my life and I just shifted the balance a bit.”]
Coleman is one of many retirees and semi-retirees whose journey to financial freedom is featured in the free eBook, The Definitive Guide to Becoming the Retiree Next Door, published by MoneyTips.com. While most Americans worry that they won’t have enough money to retire, this group of successful retirees shows that many fulfilling paths are possible despite the challenges.