Hi Rob,
Well I wasn't thinking of intercst though I noted you couldn't help but do so. I just don't find further discussion of intercst to be productive.
I don't tend to think about "retirement" in my own mind. I do think it conjurs up images of being old and gray (or worse) and it isn't motivating. I think in terms of being financial freedom - the freedom to spend my days howsoever I wish. I agree that this doesn't have to mean one does not work, like it is black & white, but at the same time I wouldn't say I had financial freedom if I wasn't in a position to fund my living expenses indefinitely.
I do see financial & personal freedom (which is how I frame my goal) as something one works towards gradually over time. I am presently clearly old debts but I am using the opportunity to learn as much about investing, ahead of my ability to actually invest, in order to be well prepared. This increases my confidence levels - creates the belief that I
can do this - and pushes me forward. I've also found a renewed general interest in exploring & learning new things constantly in my life. Never having been very academic at school, this has come as something of a revelation to me. It is also something personal & flexible, and can be molded & interpreted which suits my own style. Lastly, it is a way of being able to flex my intellectual muscles in new ways and perhaps benefit from their presence.
For me, increasing levels of personal & financial freedom is the thing. This helps not make it an all or nothing vision with life seemingly put on hold while one works to achieve this. More balance. One good example of this is balancing investing in the highest long-term returning asset classes which may seem prudent but may derail your plans if those handful fail to work as they have historically. Having steps along the way as rungs one climbs on the ladder to FI. Having interests one wants to pursue but not putting them off endlessly for a time when you'll have more time. To hestitate less and accomplish more today. So if approached right, one can take a future-focused financial plan and turn it into something that helps you in your daily life. Most likely a quite unexpected result for most people who turn away from the idea of thinking about their future because it isn't interesting.
I do still stand with the point though that one shouldn't talk about being "retired" but still need income to live. Thinking & talking in terms of possessing increasing levels of personal & financial freedom is the way I frame it and I think is both more accurate & healthy too.
I have read intercst's points on this matter (and I don't wish to get dragged into a whole thing about intercst, please Rob) and what I read in his point was simply what I have just said. One cannot call oneself "retired" and still need to work. It is like a light switch being either on or off - you can't be both at the same time. So largely it may seem like semantics but I think the way one frames these things psychologically is important (just like I think the asset class headers one uses splitting bonds out from secure ones used as a foundation and other ones which deliver little net real return little but are lumped in with the 'bond' allocation is a mistake). When one starts from a position of clarity I think one makes better decisions moving forward. I too see "retirement" as an old concept, uninspiring and negative. It doesn't really get to the core
I want to strive for. It makes me instead see an image of a guy in his 70s or 80s sitting at home alone in a dreary rainy London and that isn't something I want to save-up for! Passion saving!
Financial independence is slowed down when one chooses to move "into the slow lane" as the savings rate slows and one may even need to tap investment returns & stop saving altogether partly to plug the income gap (depending on what work you move into). You could end-up compounding existing capital at lower rates (tapping 2% of the compounded growth to live) and not be able to add new savings. This would dramatically change the timeline from that point to full financial freedom - compounding what you have at 2% because you're tapping the other 2% to plug the income gap will put a far increased requirement on what you have saved to that point before you take the leap. If you used to earn $20k, spent $15k, saved $5, then drop to $10k in your new job, you'll need $5k from investments each year (numbers for illustrative purposes only). Depending on how much you have, this will be a certain percentage of your capital. The problem is, once you get up to money in the $'000s it compounds much faster and new savings makes all the more difference to that. If you quit for something more fullfilling but with the above financial scenario, you rather shoot yourself in the foot! If there is a shortfall this year and you start living off part of that investment return, you need to be halfway to the FI target to deliver the 2% used in the example and compound the other 2%. Just a few more years of adding full-time savings & full compounding would have gotten you to the FI goal much much sooner. As Charlie Munger has said, getting to the first $100,000 is the hardest, then $1,000,000 and so on. You also become far more reliant on further timely investment returns rather than being able to take a 5-year outlook on returns (not year to year which may cause one to more to a lower returning portfolio to achieve that goal). The emphasis is then on what the market delivers and not what you control which is how much new savings you add to the pot each year. When fully FIREd one has the ability to cutback on spending in poor returning years, you deprive yourself that flexibility when using this half-retired approach. So I think much caution and least optimistic financial forecasts are required. The path is fraught with risk..
Predicting what one will earn in a new untested scenario of a change of career is difficult because one cannot really know even with research. One has to quit the higher paying job in order to find out and it may not just be a simple case of returning later (this is where I disagree with Terhorst who suggested the same thing if full retirement isn't to your liking - he was very much against saying you were retired but still freelancing - retirement to him had a no paid work requirement to survive & and not just subsisting but really living).
Often changing career completely will involve retraining full-time and starting at the bottom. Income levels will first disappear and then come back probably much lower than they were before (one way to go for one type of career change, milage will vary). This takes considerable planning, and personal deceit as to your level of financial independence achieved to date is unhelpful to that goal. I have seen much talk on the Fool "Slow Lane" board of being "retired" and it makes me cringe because none of these people are. They have made a courageous choice to live life in way that puts personal freedom of exploration ahead of financial freedom. Lets be clear about that. Lets not muddy the water and obscure that reality. I can certainly see myself working into my 60s and 70s, but I would really want that to be on things that I enjoy. I would want to have the freedom to take two months off if I so choose and not be stuck to a single location because my job was there or because they won't allow me such time off in one block because it would interfere with running their business. This is, I think, where trouble comes into paradise and having the financial flexibility to walk away, move around etc is important. Clarity is essential.
Petey
hocus2004 wrote: So to call oneself "retired" but then still need to work for money is wrong labelling IMHO and liable to create other faulty thinking based on such confused logic.
My view is that the word "retired" needs to be redefined when you put the word "early" in front of it, or else it no longer makes sense.
To "retire" is to withdraw. The obvious question is--Withdraw from what? In days past, people retired at age 65 expecting to die at age 70 or so. They were withdrawing from life itself, planning to die. If you go strictly by the old definition of "retirement," to aim to retire early is to aim to die early. What is the appeal in that?
The reason why we find the idea of early retirement appealing is that we want to be able to do things with our lives other than work for money. That's what it is really all about.
And that is the state that I have achieved. I don't do the work that I do primarily for money. I do it because I love the work. I would do it if it paid zero.
I could have stayed at my corporate job for a few more years and saved enough to never "need" to work again. But what would have been the point? I knew that I would be doing this work, so I saw no reason not to count the minimal amount of money that it would bring in as income when putting together my plan.
People can use whatever terms to describe this that they please. An argument can be made for dropping the word "retirement" altogether and just saying that I have gained the ability to live the self-directed life. I am certainly OK with that. The reason why I sometimes use the word "retire" is that that is the term that people most often use on these boards. Using that term, the best way to describe what I am is to say that I am "retired" from corporate employment but not from the world of work altogether.
I object to the way in which intercst plays semantics games with the word "retirement." He does this not just with me, but with anyone who differs with one of his Sacred Nonsense Dogmas. He says that anyone who has any interest at any time in doing anything other than watching television is not really "retired" and should not be permitted to post at the Motley Fool board. I think that is complete nonsense. Intercst could learn a lot from listening to the many community members who have developed creative ways of getting what they want out of life. If he is satisified with his own approach, why is it that he feels such a need to constantly put down all other approaches?
It's not the semantics that matter. It is what we can learn from others who are trying to achieve their life goals and who can offer experiences to help us achieve ours. I would like to see intercst stop pushing his narrow view of what constitutes "retirement" and permitting the many community members who have expressed a desire to hear some new ideas to see those desires realized at all of the various FIRE/Retire Early/Passion Saving boards. My personal belief is that intercst does not care about the definition of "retirement" one way or the other. He uses the semantics games to shut down other viewpoints, just as he uses the nonsense claims put forward in the REHP study to shut down discussions of views on investing that he is not able to respond to with reasoned argument.
, cleaning house.
"Meaningful" is in the eye of the beholder. Some people feel retired is retired, and if they want to watch Survivor reruns, so what. That's OK with me. Personally, I like to give a little because it makes me feel better. I'm pretty sure that economists have written long papers about why people give, but bottom line for me is that I can and there are others in need. But I also blow off whole days reading or, 
, surfing the internet.
Clearly those that have opted for the change in lifestyle without the assets to fully back it up will violently disagree with this perspective! 