Playing Offense in Retirement

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In a comment responding to my recent post about making better decisions in the face of uncertainty, a reader wrote: “Life is inherently risky. To try and compensate for every contingency is irrational. We can “what if” ourselves right into a straight jacket! You retired early … you won!”

As a lifelong football fan, this comment reminded me of Super Bowl LI. At the 8:31 mark of the third quarter, Tevin Coleman hauled in a six yard touchdown pass from quarterback Matt Ryan, putting the Atlanta Falcons ahead of the New England Patriots 28-3. 

Game over.

Even with future Hall of Fame coach Bill Belichick and quarterback Tom Brady on the other sideline, there was no chance of New England overcoming a 25 point deficit in a game in which they were being dominated by a formidable foe.

Except they did.

New England scored the last 25 points in regulation to force overtime. Four minutes into overtime, James White ended the game with a two yard touchdown run. Final score: New England 34, Atlanta 28.

Atlanta took its foot off the gas pedal. They tried to run out the clock. And they lost.

There’s a valuable lesson there that we can all apply to retirement planning. . . It ain’t over ‘til it’s over. 

If you’re retiring at the traditional retirement age, you may only be in the third quarter of life. If you leave your career early, like I did at age 41, it may not even be half-time. You haven’t won yet.

Traditional retirement planning, assuming earning no more income and focusing on safe withdrawal rates, is akin to trying to run out the clock. It’s playing not to lose.

Let’s look at why you should continue to play offense in retirement, especially if you’re planning to retire early.

Preparing for White Swans

Author Nassim Taleb popularized the term black swan events. Wikipedia summarizes black swan theory as follows:

  1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
  2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
  3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.

Many people talk about planning for black swan events, which by their very definition can’t be predicted and thus planned for. Conversely, my blogging friend Doc G writes on his blog about the idea of planning for white swan events.

He writes: “White swan events are much more common but can be no less devastating to a financial plan. So why do we spend so little time thinking about them?”

A few examples of what he calls white swan events are changes to your health or tax laws. This idea that life and thus spending is dynamic is firmly rooted in reality, in contrast to modeling based on the assumption that retirement spending remains fixed over time, adjusted only for inflation.

I would add another “white swan” that few people like to talk about to his list. Divorce. 

Divorce rates are generally decreasing. But for those age 50 and older the trend is strongly moving in the opposite direction. Researchers have termed this Gray Divorce

For those who think early retirees are different and early retirement is some panacea, I refer you to Mr. Money Mustache’s eloquently written post about his recent divorce.

In my own case, my wife and I didn’t go down the road to divorce. But the massive life transitions during the first year of my early retirement contributed to the most tumultuous period in our otherwise happy eighteen years of marriage.

Prior to going through the experience, I would have never predicted this happening. Which leads perfectly to my next point.

We’re Horrible With Predictions

Retirement planning requires making many assumptions. We have to predict the unknown. The longer our retirement horizon, the greater our errors become magnified as they are compounded over many years.

Before you try to forecast decades into the future, it is wise to start with a healthy dose of humility. This Freakonomics podcast reminds us of “The Folly of Prediction.”

You need to predict life expectancy. The Atlanta Falcons couldn’t hold onto their 25 point lead for 22 minutes! How much harder is it to develop a plan when you don’t know how long the game will last?

We need to predict economic factors which include future stock market returns, sequence of returns, interest rates and inflation rates. Few of us are economics experts. 

Even the “experts” are generally terrible at predicting these things. Studies have shown it is very difficult to predict recessions, interest rates, or financial markets.

We need to predict future political conditions that will affect tax rates, the health insurance marketplace, and social security.

Most political “experts” couldn’t accurately predict the outcome of our last presidential election the day before it occurred.

We also need to predict ourselves. What will make us happy? What do we really want for our lives?

This intuitively seems much easier than making economic or political predictions. But science tells us otherwise. Harvard psychologists’ studies have shown, “when people try to estimate how much they will enjoy a future experience, they are dependably wrong.”

As I approach two years of early retirement, the only thing I feel comfortable predicting with confidence is that my future will end up differently than I would have predicted.

Errors In Our First Two Years

Semi-Retirement Plan

My wife and I spent several years researching and planning for early retirement. Despite that, in just nine months between telling my employers I would be leaving my job on February 28 and before actually leaving my job on December 1, 2017, our plans changed dramatically.

My initial plan was to ease into retirement by finding casual part-time work or possibly working a couple weeks a year doing a travel rotation as a physical therapist. Doing so would allow me to test the waters of early retirement for a few years; easing financial strain, avoiding sequence of returns risk, and providing a more gradual psychological transition.

In spring 2017 I pitched an idea for a book I’d been wanting to write to the guys who created the Choose FI podcast, and they agreed to partner with me. 

A few months later, I read one of Darrow’s posts and sensed he might be burning out on writing and managing a blog of substantial size. So I proposed a scenario for partnering on the blog. He agreed to do it.

I decided to completely leave my career as a physical therapist to focus on these passion projects. I’ve spent my first two years of early retirement working much more and earning much less (at least in the short term) than I anticipated in our original planning.

Housing Budget

We closely tracked our expenses for five years leading up to starting our transition. Our goal for the first few years of our transition was to stop saving, but not draw down investments (plus or minus a few thousand dollars in either direction).

Despite our detailed planning, our projections have been off significantly.

In 2018, the biggest miscalculation was a positive one. We were able to sell our home without having to use a real estate agent. This saved us about $15,000 we expected to spend and gave us a significantly positive savings rate for the year.

2019 has been a far different story. We downsized with our new home, thinking it would give us the lifestyle we desired. We love our location and like having less space to maintain, but we hated how inefficiently that space was used in the dated floor plan.

So we’ve spent this summer working through a major home renovation. When it’s done, we’ll have spent over $30,000 we didn’t anticipate spending on renovations in the first year living in our “move-in” ready house. This means taking more from our portfolio than we anticipated. 

New Hobbies and Interests

We moved from Pennsylvania to Utah to be in the mountains and pursue a lifestyle of outdoor adventure. While we get out into the mountains with regularity as planned, we are not doing what we would have predicted in the mountains.

My wife and I envisioned doing a lot of rock climbing with abundant opportunities surrounding us. But the combination of having a young child and my wife’s struggles with repetitive hand injuries make climbing regularly a challenge.

So I’ve become an avid mountain biker, riding 2-3 days every week. My wife also has started riding a bit and she has also found a love of trail running.

We also decided to try growing our own food this year. This was something we have talked about for years, but never seriously considered until my daughter got interested after planting a garden at her school. It has turned out to be an incredibly fun and rewarding experience for our family.

New hobbies, even when pursued with a frugal mindset, come with costs. 

We bought a mountain bike for my wife. She also got running spikes for the months when the trails are icy. My “free” bike from a friend still has cost me close to a thousand dollars in upgrades and maintenance. We also bought a bike rack for our car, helmets and other accessories related to our new hobbies costing thousands of dollars.

We bought lumber to build garden boxes and had a couple tons of dirt hauled in before buying plants and seeds then spending the summer watering them. Our “free” vegetables cost us well over a thousand dollars as well.

Be Humble, Live Large

As I approach two years since leaving my career, I would advise others contemplating the retirement decision to be humble. Retirement planning comes with a lot of uncertainty. 

You have to embrace the fact that there is a lot you don’t know and can’t predict. The alternative is to spend your life trapped in fear. 

That fear can prevent you from leaving your career or it can manifest as constant anxiety around spending in retirement. Neither is desirable.

I would also advise that you live large. It doesn’t make sense to do everything it takes to escape mandatory work if you are going to trap yourself in a life constrained by a tight budget with no room to grow, explore, and pursue new opportunities as they present themselves.

These seemingly contradictory pieces of advice have the same solution. Don’t limit your view of retirement. 

Continue to play some offense. Never stop growing and learning. Consider fun and interesting ways to earn some ongoing income. Give yourself options.

Life is more fun when you’re playing to win, rather than trying not to lose.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to Financial planning inquiries can be sent to]

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