We’re on the Glide Path to Retirement: Here’s Our Strategy

This just in:  Your Choices are not Limited to 100% Saving or 100% Spending

Just like life, finance is not  always binary.  It can be subtle and delicate, like me.  There are many diverse and effective strategies to get to the sunset of your working life and this is ours.  

The decision was partially made for us.  Here is the background

If you already know this then feel free to skip this part, but our house includes 2 adults over age 50 and a boxer dog named Banjo! and no children.  We’ve been married close to 15 years and have worked full time and more our entire lives until Spring of 2017 when Mrs. Smidlap’s office where she had worked for 22 years closed and BAM!, the decision was made for us to go down to my full time income and some side hustles.  In a sense it’s like she’s retired in her mid-50’s with not too many years to go before we can collect one social security check in order to supplement my income if I continue working at my not-too-bad J.O.B.  That’s how the decision was partly made for us.

It didn’t make too much sense to us for her to go and look for another full-time gig in the music industry in Buffalo, NY at this stage of life.  I’m now sitting on 5+ weeks/year of paid time off and we really like to enjoy that together with some budget travels to AirbNb’s near the ocean or the Adirondack Mountain Region near Lake Placid or our beloved New Orleans.  We made the decision that, unless something very high paying came up that we would just make up the shortfall in income through investing less into retirement accounts and enjoying our combined incomes in the present day.

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This 48×48 painting my Mary Begley sold the other day for a couple of grand.  It’s a great hustle but can be inconsistent.

Investing doesn’t need to be binary.  That is you don’t have to be all-in or all-out, just like paid employment

That’s why I call it a glide path to retirement.  We already did the hard work and super-saver hustling for the past 25 years or more and that’s how you get into the position to have choices like this.  When we were working full time and I was hauling in mandatory overtime dollars hand over fist we saved and invested very aggressively for about 14 years.  I rarely spent any extra money that came my way but instead made the choice to throw it all after knocking out some lingering student loans and we even polished off our mortgage about 5 years ago.  We own our modest cars and have been 100% debt-free since we finished paying off our house.  A strategy like that only works if you have done all the hard and necessary preparation and made the sound choices not to inflate our lifestyles when everything was rosy.  It’s not when times are tough that you can really make hay but when everything is coming up roses you can be very well prepared when the rainy day comes like losing a job in ’17.  Besides, it’s not like we lived like paupers and ate from dumpsters when we were in full-throttle saving mode.  We basically just bought anything we wanted, which, fortunately for us, isn’t excessive.  Check out this classic about “wants money vs. needs money” from last year.

Are You Working for “Needs” Money or “Wants” Money?

I promise I’m getting to the philosophy and strategy part

When we first experienced the lost income/retirement I thought we would just continue investing the same amount in various retirement and tax-advantaged account like we had always done.  Then, when we noticed a little lifestyle hit, came the epiphany:  There is no rule we need to max everything and sacrifice our quality of life in the present when we essentially had already won the game.  I realized those saving levels were just habits and we had been doing it so long that it felt unnatural to do otherwise.  It took a couple of less than ideal side hustles that Mrs. Smidlap tried for us to realize the sacrifice was too great and the reward not nearly enough.  I wrote Not All Time Is Created Equal which all about what times of the week/year were most important and valuable to us.  One part-time job included too many Saturdays and an adjunct college instruction gig ended up messing up our September Adirondack vacation week.  The juice didn’t turn out to be worth the squeeze.  We are still funding my 401k at the same level but have shifted some of it into a Roth 401k now that our tax bracket is lower.  I’ll take 10% tax in the present for tax-free gains any time.  I funded one Roth IRA fully with income last year and converted some taxable shares to the other Roth as I can’t resist tax free gains in retirement.  I’m funny that way.  I also increased our cash allocation last fall to between 15 and 20% of the total portfolio, enough to cover 4-5 years of living expenses as if we were already retired.  Like I implied before, once we won the game, why are we still playing?  

The final part of the philosophical approach is just like days of the week and weeks of the year not all being created equal.  All years are not going to be created equal in my eyes.  The most important year is the one that is happening right now in the present.  Tomorrow is never promised.  I don’t mean that to be all doomy and gloomy but have seen enough to know it’s true.  Do you think you’ll be healthier or less healthy in 10 or 20 years in order to enjoy a huge heap of saving more than you can today?  Notice I’m not saying we’re stopping on the investing train completely and we’ll likely fill up one full Roth IRA contribution and continue funding my 401k this year.  I’m still working and don’t mind it much, which is a win in my book.  Five weeks off is plenty as travel is starting to wear on my nerves (especially air travel) as I get older and ever more curmudgeonly.  Also notice that we’re not cashing in any investment chips to fund our lives, either.  We’re just reducing the amount we invest and enjoying that income this year!, like right freaking now!  Mrs. Smidlap has been extra choosy about the schedule and pay rate of various side hustles and if the right ones don’t come up we might invest even less or even zero without selling the significant investments we already own.  That’s my glide path plan to make the transition from saving and investing to retirement and cashing out.  I would rather take the small risk and make sure we’re maxing our enjoyment of today (within reason) versus hoarding a shit-ton of money for when we’re in adult diapers and gumming our food.  This might run counter to all the FIRE dogma and I’m glad for that.  You gotta decide what’s right for your circumstance and think for yourself about this stuff.  We’ll be here throttling down the airplane of full time work and hopefully gliding ‘er in for a smooth landing.

We sold all this in the past two weeks on eBay for about $350 total.  Who needs some of our junk  treasures?  I’ll give you a great deal!

Also, I would like to thank Ms. Liz for her thoughts on retirement plans in this post.  If you’re near retirement check out her site as she has been “peaced out” for a couple of years now.  What’s Your Plan?

25 Replies to “We’re on the Glide Path to Retirement: Here’s Our Strategy”

  1. The toughest thing to figure out is the balance between living for now and living for later. It looks to me like you have this nailed!

    Thanks for the call out! Hopefully our mutual distaste for airplane travel won’t prevent us from enjoying a drink together sometime!

    1. i hope we can do that some day, liz. i don’t know about having it nailed but i find that writing it down and putting it out there forces me to look a lot closer. one of these days i’ll try for less general/philosophy and put some numbers down on paper.

  2. “There is no rule we need to max everything and sacrifice our quality of life in the present when we essentially had already won the game.”
    OMG. That hit me right between the eyes. I was at lunch yesterday with friends from work – we’re on summer holidays – and one woman told me about her strategy for essentially using her long-service leave, not for a big holiday, but for working part-time but still getting a full-time wage in her last year of work.
    Food for thought. I’m still weighing up whether I’ll keep working full-time to go full-throttle towards retirement, or start going part-time in the next year or two.

    1. i’m glad you liked it. i spend a lot of time thinking about these things. i don’t really get the minset like your friend’s. i worked so hard in order to work some more.

      there’s something about just shutting it all down for full time leisure or 24/7 free time that makes me a little uncomfortable. my life gets more expensive the more free time i have. i’ll be interested to know what direction you take.

  3. Freddy, great post! Been lurking here for a while as I like your writing style; fun and never preachy. I’m about the same age as you (pushing 50) on Long Island and have daughter at Fredonia right now. Wife doesn’t work and I’m about 10 months from polishing off the mortgage and looking to do a similar glide path but with me shifting down to a less stressful job than I’m in now when the mortgage is gone for about five years til I pull the plug completely. Glad to see someone not pontificating on a FIRE type blog that their way is the only way. Keep it up! – Mike

    1. hey, mike. i appreciate the kind words and you reading this stuff. i shifted to a much less stressful job a year and a half ago and it’s been like living a brand new life. getting that mortgage gone is life-changing. i’ll bet it’s even more true in your higher cost of living area. i wish you all the best with your master plan.

  4. I’m guessing you may find what I’ve found after both of us retired. Now, when I could buy any car, I buy less expensive cars than I did when I was broke. I could buy almost any house but the only house we’ve ever owned is already much larger than we need. I could take any vacation I want but my favorite trips are overnight drives to hike right here in Arkansas where a luxury cabin runs $150 a night counting all taxes and fees. So there it is, I have more money than I need yet I spend less than I used to. It is another reason not to live on the bleeding edge now, you likely won’t spend as much as you think in retirement (as long as you don’t buy a Lamborghini). Great post Freddy!

    1. thanks, steve. our only real luxury expenses are decent wine and the annual new orleans outing. even those are getting less pricey as we gravitate more towards time with friends there over a fancy restaurant every night. a couple of premium lunches usually do the trick and i gotta take mrs. smidlap out in public on a date every now and then.

      i’m guessing along the same lines of spending less than some predict in retirement. all that being said i’m sure, like you, we won’t increase spending just because the money is there. one reason is how much i enjoy investing!

  5. Completely agree with this. So many people seem so focused on the destination that they forget what it’s all for. I am after happiness all the way. If I had to choose between happy and working or unhappy and non-working I know what I would do every time.

    It’s definitely a part of getting older that I realise that health and life are not to be taken for granted. Like you I want to make sure that I’m happy today. Not put everything off for a tomorrow that may never come. For me the key is the realisation that the things that really make me happy aren’t about money. It means that saving for tomorrow doesn’t have to conflict with happiness today.

    1. thanks for checking in here. there is a baseline of money that makes our lives today convenient and comfortable. when we had more than that amount we did the right thing investing it for tomorrow. it’s hard to find the balance but i somehow feel like a year or two of spending the whole check without investing (except for any company match) will be very liberating. somehow i didn’t want to go straight from full on saving to turning on the withdrawal spigot. you could pull a hamstring with that sudden change.

  6. We only experience life in the present. Plan for the future, learn from the past, but be here right now. So subtle, so delicate.

    Kinda makes me sad when I see those countdown to FIRE/retirement clock thingys. Dude, that’s your life you’re counting down!

  7. “once we won the game, why are we still playing?”

    That’s a tough issue, I deal with it too. Doc G at DiverseFI has written about this a lot too in regards to side hustling and “working”, which is the lens I view it from. I think part of the answer is that we feel we still have something to give or accomplish, even if we’re not 100% what that something is. In essence it’s why I know for absolute certainty that I’ll never enjoy a retirement of MaiTai’s and days on the beach. One or two a year? Sure. But that’s plenty.

    1. it’s not about the game being work for me. it’s the obsessive saving part. if we’ll eventually stop this type of paid work i really want to take gradual steps to get used to not having to save so aggressively. it’s more about gradually changing the mindset or winding it down. i’ll do a lot of stuff for free when i have the time.

  8. Maxing out your enjoyment today without ruining your future plans is the sweet spot. Sounds like you have every right to let down your hair (or regrow it?) since you’ve put yourself in the position to do so. Congrats.

    Sometimes, we are a little too austere in my household (we shame each other for $10 purchases at times). I think we need to dial back the frugalness a bit and make sure we’re enjoying this year, too.

    1. i sure don’t make is sound like a person or family ought to go straight to full on spend and no save mode. you still gotta do the hard work and make choices and maybe even some sacrifices. i just kinda recognized that we could slow down on the investing and maybe coast to a stop. i hope my last working year that we’ll spend every dime of that paycheck (except the match)! i have found myself in the past questioning a not so big purchase by mrs. smidlap and later thinking “dude, what were you thinking?”

  9. Thank you for your differing perspective on the general FIRE movement focus. There are so many ways to live one’s life and reach an older age comfortably. We work only 10 months out of the year, with many weeks off for holidays, and for us that’s a wonderful way to experience retirement every year and prepare us for our future. Sure, we don’t make money during those periods, which gives us great practice for what it would be like being on a budget, etc. Thanks Freddy for always sharing your thoughts 🙂

    1. i appreciate the support, kate. if you like where you live and enjoy your home life then you have already won quite a lot in life. if somebody wants to make it a race to have a couple of million bucks by age 35 then i support that notion too. i just ask “what is the cost of that?” your youth? there’s always a trade.

  10. Awesome post, Freddy! I think my long term goal is to be you lol. I would say that I’m on a glide path to FI because I am still living comfortably while saving. I want to be in a position like you eventually, where I can paint and work on art. I love your painting by the way. And I agree with your thoughts on tomorrow not being promised. All we have is the present. Also, investing does not have to be binary. I like this concept, and it’s cool that you’re applying creativity to everything in your life. Hope you’re having a great week.

    1. haha. my wife, mary begley, is the painter in the house. seems like you have youth on your side so you figured out this whole investing thing way before we did, especially with the dividend income stream. those steps will serve you well i’m sure. thanks for the kind words. i appreciate you reading.

  11. Great post!! Balance is the worst part about saving for the future and living for the now. I struggle with finding my balance almost everyday.

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