When we first retired in 2015, I had a very different version of retirement in my head. The picture in my head looked something like this:
- Hand in notice
- Give my boss the finger
- Tap dance out of the office
- Travel the world. Be happy forever.
Reality turned out a little differently.
Instead of tap dancing out of the office, I hoofed it back to my desk worried that I’d made a huge mistake. All around my co-workers continued answering e-mails, rushing off to meetings, scurrying around doing “important things,” completely oblivious.
Later that night, I woke up in a cold sweat, wondering what I was going to do with my life. As it turns out, when you’ve had the same identity for nearly a decade, you can’t just magically forget about it overnight.
When it comes to predicting your post-retirement life, you won’t know what it’s really like until you’re in it. And after 5 years, I learned that there is a natural progression through the stages of early retirement that is similar to what normal retirees experience, except you’re young so you have a lot more pent-up energy and drive.
After speaking to a few of my retired friends, I’ve found that despite the different paths we took post-retirement, there was a common pattern.
So, for those of you pursuing FI and want a glimpse into your future, here’s an unofficial breakdown of the eight stages of early retirement.
Stage 1: Striving for Retirement. The marathon of Financial Independence
On your commute to work, you listen to ChooseFI, the Rebel Entrepreneur, and MadFIentist podcasts. During your lunch break, you devour, Mr. Money Mustache, JLCollinsnh, and our weird little blog. Your bookshelf is lined with The Simple Path to Wealth, Quit Like a Millionaire, Financial Freedom, and Playing with FIRE.
You tell everyone within earshot about the 4% rule, savings rates, index funds, and tax optimization, until they’re so sick of it they want to shove you down the stairs.
You count down the hours, days, years until you can finally escape the rat race so you can live happily ever after.
Even the 60 to 80 hour work weeks are now worth it, if you can just get to the finish line. You can almost taste the freedom—so close, yet so far.
We were in this stage for 8.5 years and the final year leading up to my retirement felt like the longest year of my life. I also didn’t tell anyone at work what I was up to. I let them think I was a broke idealistic Millennial, quitting my job to travel the world and “find myself”. It wasn’t a hard sell.
Stage 2: Retirement. You did it! You reached FI!
FINALLY. The marathon is over. You collapse into an exhausted sweaty heap at the finish line, grinning and feeling like a million bucks!
You pull out the resignation letter you typed years ago in eager anticipation of this day and can’t wait to shove it in your boss’s face, after toasting yourself with a glass of well-deserved champagne!
The day we reached FI felt surreal. I kept checking our spreadsheets and brokerage account to make sure we didn’t make a mistake. The celebratory bottles of champagne we polished off turned out to be a double-edged sword. I woke up with a hangover thinking I’d dreamt the whole thing.
Stage 3: Panic! Freaking out about losing your paycheque and identity
Even though you’ve been counting down to quitting day, you keep delaying and telling yourself: Next Monday, I will definitely quit. Next Monday is the day.
You know you’re supposed to feel relieved and excited, but instead, you feel anxious and worried.
For some people, this results in the dreaded “One More Year Syndrome.” They end up telling themselves, I need one more year of extra money, just in case, and then I’ll quit. But then that day rolls around, surprise surprise! They don’t. They keep doing this dance, thinking I’ll do it next year, but never really getting the guts to pull the trigger.
Luckily, you don’t have One More Year Syndrome. After procrastinating for a few days, you walk into your boss’s office and finally hand them the resignation letter.
That night you have a mini-panic attack. You wonder to yourself, what am I doing? Is this really a good idea? What if I run out of money? What am I supposed to do for the rest of my life?
This is what surprised me the most about my FI journey. Wanderer had already quit his job so I couldn’t chicken out. I thought quitting would be exhilarating, but it was nerve-wracking even though I hated my job and never felt like I belonged in engineering. Now I realize that even if logically you know you’ll be fine, you still can’t predict how you’re going to react. Emotions are weird.
Stage 4: Honeymoon. Wow, retirement is all it’s cracked up to be!
You know that scene in Shawshank Redemption where Andy Defresne crawls through 500 yards of shit through the sewers to freedom? And then when he finally escapes prison, stands in the rain, and blissfully stretches his arms out towards the sky.
That is what it feels like when it finally sinks in that you’re free. You can now set your alarm clock on fire because you’ll never have to put up with another stressful deadline or bullshit meeting again.
You feel like you’re on top of the world. And in our case, we packed our bags, sold off our stuff, and bought the first of many plane tickets for our trip around the world.
I call this the honeymoon stage, but honestly, it was WAY better than our honeymoon. Every day felt like waking up in a dream, and foolishly, I thought it would last forever.
Stage 5: Boredom/Disillusionment: Is this it? Now what?
Our brains are wired for dopamine. It’s drives us to continue existing, by incentivizing us to search for food, have sex, or seek out new and exciting experiences. But annoyingly, this hedonic adaptation is exactly what causes you to feel bored and disillusioned after you’ve gotten all the excitement and newness of retirement out of your system.
You’ve read all the books on your list, watched every Netflix show, and played countless hours of video games. That’s when the dreaded question begins seeping into your head and then ricocheting around in your skull. Now what? Is this it?
You start worrying about being useless while everyone else is doing important things like getting promotions, raises, and accolades. You start to ask yourself, why am I here? What’s my purpose?
Now that might seem scary at first and makes you wonder why you quit you job, but this is a good thing.
When we’re working, we spend most of our time paddling and trying to keep our heads above water. We never had time to ask questions like “What am I doing with my life?” “What’s my purpose” and “Why do I exist?” But this existential crisis is exactly what we need in order to figure out our life purposes, so we don’t end up with regrets on our deathbed.
In my case, since I took 5 years to build my writer identity before I quit my job, this stage didn’t last long. We also volunteered for a non-profit called “We Need Diverse Books” so that gave us automatic purpose and community in retirement.
Still, it didn’t stop me from periodically having thoughts like “but other people are working and getting ahead, what am I doing with my life?” I’m happy to report that they only happened sporadically during the first two years, when you’re still wading into retirement. I haven’t had those thoughts for over 3 years now.
Stage 6: Re-invention: Building your new identity
Once you get over your ego and stop the urge to impress and “one-up” everyone else, you start creating your new identity.
You can finally be yourself and create the identity you want, rather than the identity society expects of you. Which is great, because after all, this is THE biggest regret of the dying.
This is when you figure out who you REALLY want to be. Whether it’s writing, video production, gardening, taking care of your family, bettering the world—whatever it is—you finally have the time and space to do it. You can’t hide behind your job and lack of time as an excuse anymore.
You are now free to create your new identity. And remember, it doesn’t have to be a big, bold, world-changing type of identity. It’s an identity that suits you, regardless of what everyone else thinks or does.
That’s what I did. I took my engineer identity cast it aside, and made an honest go of being an actual writer. We published our first book Little Miss Evil and we started this blog. Life felt damned good. It felt like I was finally in the right soil.
Stage 7: Burn Out: Do I need to retire from retirement?
Sometimes when people create their new identity, they get a little carried away. If you become good enough at something and help others without asking for anything in return, sometimes you get more opportunities than you know what to do with.
And if you’re an overachieving A type person like me (which is what got you to FI in the first place), you end up saying yes to everything. Which is exciting and new and fun at the beginning—
But soon you get burned out. Somehow you are now choosing to work longer hours in retirement than back when you had a job. Do you need to retire from retirement? You start to wonder “Why am I doing this? I don’t even need the money anymore.”
For us, we hit this wall last year. Penguin Random House approached us about turning our blog into a book, and as a professional writer you don’t say no to an opportunity like that. We pored ourselves into this new writing project that would eventually become Quit Like a Millionaire, and we then launched ourselves into a world-wide book promotion tour in 2019.
At one point, we had to fly into London to record our audio book, then go right to the premiere of Playing with Fire, and then go right into a Chautauqua. I found myself losing sleep and becoming my old anxious self. When I started considering taking sleep medication again, that’s when I knew I was burned out and needed to find some balance. Even if you’re doing what you love, you still need balance, or it’ll quickly turn into a new treadmill.
Stage 8: Zen/Balance: Staying present, focusing on relationships, and settling into your new routine
After burning out, you decide that you’re going to start saying no. Because saying yes to everything actually means saying no to friends, no to time for yourself, and no to your health. You realize that you need to prioritize the projects that make you happy and spend more time with people who matter the most, instead of sprinting in a million directions just because you can.
You learn to meditate, to stay present, and to enjoy “being” instead of “doing”. You learn the real value of FI, which is spending time with your family and the people you care about.
You’re zen, you’re happy, and you find the perfect balance between passion and relaxation.
This is the state we’re in now. The pandemic forced us to slow down and learn how to find balance and happiness without sacrificing at the never-ending alter of achievement. I’ve started meditating every day, we’ve settled into a comfortable routine and as the year’s gone in, I’m feeling…happy. And relaxed. It’s a new state of being for me.
So, there you have it. The 8 Stages of Early Retirement.
What do think? How do you picture your life after retirement?
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