I can safely retire with a 2-4% withdrawal rate, but I still feel uneasy. How do people do it?

One of the greatest moments in anyone’s professional life is the exact moment they decide they are done working permanently. Whether it’s due to health, finances, or something else, the moment when you can say goodbye to the 9-to-5 forever has to be incredibly freeing. 

For one Redditor posting in r/ChubbyFIRE, that time is no, as they are financially and emotionally ready. Having had a difficult last 12 months, and with the right financial footing, this Redditor is making the best choice they can to try and find something else to enjoy. 

Reasons For Retirement

For the Redditor, this year has become the best time to retire, and it’s not only because they are financially ready. Having recently lost a spouse to cancer, they have a newfound respect for human frailty, which means they are looking to spend the rest of their life trying to enjoy everything rather than chasing more money. 

Having worked on some other interests and hobbies outside of work, the hope is that they can immediately occupy themselves without the constant pinging of Outlook. Better yet, they are tired of the corporate headaches that come with working for FAANG or any big corporation. 

With a new worth of $5 million and a paid-off home, it’s hard to argue that this Redditor isn’t in a good place financially. This is even more true when you consider their only child is graduating from college this year, so there is no 529 fund to worry about. 

As a result, there’s a belief that they spend around $200,000 per year; at least, that’s what retirement calculators say. However, there is a caveat in that, due to a life insurance policy that will pay them until they are 64, or 9 years from now, they only need a low withdrawal rate of around 2%. This rate will increase to approximately 3.75% until they reach 70, and then decrease to 3.25% once Social Security benefits become eligible. 

With their financial future taken care of, the question becomes what else can be done to help find purpose? 

Finding Purpose In Retirement

As a widower and with a soon-to-be college graduate who is likely to move out in a few years, there is no question that this Redditor will need to find something. They mention having a few interests and hobbies outside of work, but don’t provide many details. Either way, the most important thing to do is look for ways to find purpose, as suddenly not having a rigid schedule can be depressing, even for the best of us. 

Set Personal Goals

First and foremost, this individual should set some personal goals, such as pursuing hobbies or areas of interest they have already mentioned. There is a definite need for structure in retirement, and this is one of the best ways to do exactly that. Whether it’s setting a morning routine, such as going for a walk or having breakfast at the same time, any kind of structure can be beneficial. 

Social Engagement

Additionally, as a widower, this Redditor will likely seek social engagement in the near future. This could mean something as simple as joining a book or card club, or perhaps it’s volunteering at a local pet shelter or other charitable organization. A recent study by the Mayo Clinic found that volunteering among adults aged 60 and over offers physical and mental health benefits. 

Ongoing Learning

Another option is to continue learning, as just because this Redditor is done working, this doesn’t mean they are done learning. This might be the ideal time to learn a new language and then travel, or take courses at a local community college or adult learning center about a topic that interests you. 

Think About Consulting

The hope is that the Redditor can find ways to occupy themselves without becoming so bored that they turn to consulting. However, this doesn’t mean this should be off the table either, as you can now pick and choose your clients. The bottom line is that any consulting wouldn’t be done for money, but to keep their mind and talents sharp. 

Finding Love Again

Having only experienced one year as a widow, it’s perfectly okay for this Redditor to want to enjoy this period in their life. However, they mention that this isn’t something they need forever, so finding another partner is a real possibility. As this Redditor ages, there may be other widowers in a similar position who want to form new relationships slowly, and there is nothing wrong with this idea. 

 

The post I can safely retire with a 2-4% withdrawal rate, but I still feel uneasy. How do people do it? appeared first on 24/7 Wall St..