A few months ago we completed our first full year of early semi-retirement. I wanted to get this article out earlier, but it has taken me a while to properly reflect on the things we’ve learned and the things that surprised us.
Everyone’s journey is different. We are a family with young kids, which obviously impacts the way we see the world, what is important to us and how we design our life. I’m sure a single person or a couple without kids would see some things completely differently, make different choices and draw different conclusions.
I always enjoy reading the regular Early Retirement updates and lessons learned by fellow bloggers like The Mad Fientist, Dr. Doom from Living a FI and Dave from Strong Money Australia. I thought it would be a valuable exercise to create something similar for our own journey.
We had always focused on creating a balanced and enjoyable lifestyle for our family while we were chasing our financial goals, so overall our transition into the second phase of our plan was pretty smooth. That doesn’t mean we didn’t face any unexpected situations and challenges during this first year.
Let’s get into the lessons we’ve learned along the way!
1. The journey doesn’t end when you reach a goal
When I checked our net worth spreadsheet in October 2020 and realised we had hit our number I was stoked – especially because I was heavily pregnant and it felt great to reach Flamingo FI before the birth of our second baby. We took a few months off to focus 100% on our family and decompress (as much as that is possible with a toddler and a newborn).
After a couple of months, I felt the need to start planning the next phase of our lives. We are going to live the semi-retired life for the next 10-15 years. We have young kids. We have a number of ideas about how and where we want to set ourselves up during this period.
We considered moving overseas, relocating interstate or just staying where we are. The level of financial security we’ve achieved gives us plenty of options. In a way that can be just as challenging as being stuck in a situation because of financial concerns. It turns out that it can be tricky to pick the “right” option from a variety of great choices.
Covid definitely made things harder and more uncertain (this is the case for a lot of people, obviously). So we decided to just wait the pandemic out here in Sydney.
Our planning process is going on in the background and I am really enjoying taking time exploring different options for our family that align who we are today vs. who we were five years ago.
Life-planning is a continuous activity. I think it’s important to keep re-assessing and adjusting one’s path regularly, especially after reaching big goals or major life changes.
2. Money becomes less important once you have enough of it
Slowly but surely money has almost become a non-topic in our house.
This became very clear to me when I went through my annual goal-setting process recently. Getting to a level of financial independence that allowed us to claim our freedom back has been a priority for us for so long. Each year I made a pretty extensive list of financial goals – all based around spending, saving and investing.
All my top goals for 2022 are non-financial. My physical and mental wellbeing, my relationships and how I spend my time is much more important to me these days.
In this sense, money is a lot like health – it’s something people focus on when they don’t have enough of it.
I love that I can now give the other areas of my life the attention they deserve.
3. Saying ‘no’ to more money feels weird.
One thing that surprised me is how tempting more money is, even if you have enough. This sounds like a contradiction to #2, but it isn’t.
After I switched to working part-time, everyone in my company seemed to think that sooner or later I’d come back full-time. I would be lying if I said I didn’t consider it. I have a very good job with decent pay. Working more would be easy. The money would be easy.
I didn’t give in, of course. I had been preparing for this transition to part-time work for years and a) working more is not financially necessary for our family, b) while I enjoy my work I would probably enjoy it less if I worked more and c) I have many other ideas how I want to spend my time in semi-retirement.
Then an acquaintance contacted me to see if I wanted to take on some freelance work for a few months. Again, the pay would have been good and the offer was tempting, but I resisted and said no.
Saying no to more money, especially if it’s easy money doesn’t feel natural to start off with. Anyone on the path to FI focuses on making more money, either through their work or their investments for many years. It’s ingrained in all of us in the community. The shift to saying ‘no’ to money has been surprisingly challenging, but I can already see that training my ‘no thank you’ muscles over the last year has made it a lot easier already.
It’s also easier to take on some work and earn some money instead of trying new things, taking risks and continue building the life we want to live long-term.
4. Enough is enough
At the end of the day, it all comes down to finding your ‘enough’ and then getting on with life.
This is something my all-time favourite Mr Money Mustache writes about often. In one of my favourite MMM articles he says that what we should strive for is “a good, fun amount of money so I can walk outa this cubicle with confidence and never look back” and nothing more. I agree.
Over the last year, I have coached a number of readers transitioning to semi-retirement and pursuing FI. I really enjoy hearing about the different approaches people take and what challenges they face. One thing that has stood out to me since we defined and reached our ‘enough’ is how many people struggle to get off the treadmill.
Money and the pursuit of FI past the point where it’s necessary can be a distraction from doing the hard work that actually gets us to where we want to be. This is probably one of the roots of ‘one more year syndrome’.
Accepting and reminding yourself that you have enough is probably a little harder in the case of Flamingo FI, Coast FI or any other FI type that involves Semi-Retirement as you are not at FI when you start downshifting. But we also see many people who are well and truly at FI who continue to hustle way past the point where it makes sense.
If you intend to work after you reach your goal, you don’t need to be at full FI to start living your best life. Period.
I often think about the time with my family and the great times we had over the past year I would have lost if we hadn’t stuck with our plan and continued to work full-time until we hit Financial Independence.
5. Semi-Retirement really is the best out of both worlds
To be honest, I could not imagine retiring completely. I have always said this but it’s probably truer than ever. Semi-Retirement offers so much free time and family time. I actually look forward to my workdays now. And when I work I look forward to my days off. We’ve really hit the sweet spot.
So far the work-life balance in Semi-Retirement has been fantastic. Despite the fact that we are really close to actual Financial Independence now I don’t see us giving up on work for a long time. Work really does get better when the financial pressure is off.
I have written extensively about the benefits of Semi-Retirement and the past year has shown us that it really is the best out of both worlds.
6. Semi-retiring with a young family comes with some challenges
Our kids go to childcare on the days we work. We work about 3 days per week to pay for our ongoing living expenses. At the same time childcare costs (a lot of) money.
This makes changing jobs, trying out new projects, etc. a bit more challenging with young kids – anything we do needs to make us enough to at least cover the childcare fees (and earn us some excess money to live off).
One solution to this issue is to organise our workdays so that either Mr. Flamingo or I look after the kids while the other person works. At the same time, our kids really enjoy childcare and we want to send them at least 2 days per week until they start school.
We are slowly working through this challenge so we can both try out some job and project ideas we had envisioned for semi-retirement.
I’d imagine that semi-retiring with school-aged kids would be a lot simpler as you can just work during school hours on the days you choose.
This is a total first world problem, of course, and we are extremely grateful that we get to work part-time and spend so much quality time with our kids while they are so young.
7. There are problems money can’t solve
They say that money won’t solve all of your problems but it will solve your money problems. And it’s true.
Not having to stress about money has been great. We had quite a few unexpected expenses during the past year and we just dealt with them without breaking a sweat.
However, we also had to deal with several other issues during the last year and a bit that could not be solved with money – some health issues and the border closures that went on for such a long time for instance.
The realities many people around the world are currently facing (war, floods…) also show that there are many things we simply can’t control.
Life is full of challenges and about so much more than money. It’s so important to focus on our health and relationships and to enjoy the moment. And to be grateful for what we have. Life can take some unexpected turns. It’s great to have money to soften the blows wherever possible, but money alone won’t solve all problems.
There you go. My top seven lessons from our first full year of Semi-Retirement.
I’d love to hear your thoughts. Did any of our learnings surprise you? If you are semi-retired or retired already – what were some of the things you learned?