2737: How to Avoid Early Retirement Failure by Jillian Johnsrud on Financial Independence & FIRE

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[00:00:58] This is Optimal Finance Daily, episode 2737.

[00:01:02] How to avoid early retirement failure by Jillian Johnsrud of Jillianjohnsrud.com.

[00:01:09] And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:13] I'm going to keep this intro nice and short.

[00:01:15] So let's get right to today's post as we optimize your life.

[00:01:19] How to avoid early retirement failure by Jillian Johnsrud of Jillianjohnsrud.com.

[00:01:28] While life might be like a box of chocolates, I'd say it's more like a garden box.

[00:01:34] We each have a specific and finite amount of time and space to grow what matters to us.

[00:01:40] There's often a work plan, a family one, friends, hobbies or interests.

[00:01:45] At any point in time, each plant shares this finite resource with us.

[00:01:51] This is an analogy I use a lot with clients who are aiming for financial independence,

[00:01:56] want to take a mini retirement or retire early.

[00:01:59] The trouble with those goals is that the work plan can start to overwhelm the other plans.

[00:02:05] It can become invasive, crowding out the smaller plans.

[00:02:09] For most people, work is where we spend 40 to 50 hours a week.

[00:02:13] So it's naturally a big plan.

[00:02:15] On the financial independence path, letting that work plant go wild is rewarded.

[00:02:21] You'll probably earn more, get promoted and be able to invest more money.

[00:02:25] Especially if your work is meaningful, enjoyable or you're very competent at it.

[00:02:30] That work plan becomes a bit like mint.

[00:02:33] I love mint.

[00:02:34] It's one of my favorite herbs.

[00:02:36] But left unchecked, it'll take over my entire herb garden.

[00:02:40] Staring at dirt.

[00:02:42] The trouble comes when you're well on your way to FI and you're ready to make a change.

[00:02:47] Maybe it's a year off or retiring altogether.

[00:02:50] You have this massive work plan, but there hasn't been much space for anything else.

[00:02:55] The few other plants in there like friends and family are rather small plans that can

[00:03:00] be used for a lot of things.

[00:03:01] But there's a lot of work to do.

[00:03:03] So you have to be prepared.

[00:03:05] The few other plants in there like friends and family are rather small plants in comparison.

[00:03:11] Other plants like hobbies or volunteering haven't had any space for years.

[00:03:17] If you pluck that giant work plan out, you're going to have a few small plants and a bunch

[00:03:22] of empty dirt.

[00:03:23] But if you think once that work plan is gone, I can start a bunch of new plants from seed.

[00:03:28] I'll take up running to clutter my garage, make new friends, find some hobbies and an

[00:03:33] exciting volunteer gig.

[00:03:36] Except if you've ever started plants from seed, you know it's just staring at a big

[00:03:40] patch of dirt for a long time.

[00:03:43] It takes a lot of time to start things from scratch.

[00:03:46] I've probably had a hundred conversations with people who retired, stared at that patch

[00:03:51] of dirt for a few months and then went out to find a new job.

[00:03:55] After 10 or 15 years of hustling to become FI, they just went back to work.

[00:04:00] Why?

[00:04:02] They gave up all that income, significance and usefulness to stare at an empty garden

[00:04:07] box.

[00:04:08] Even if they didn't like their job, at least it was paying them money.

[00:04:12] This path seems to be the norm, especially in American culture.

[00:04:16] But because the transition into early retirement is so difficult and more often than not fails,

[00:04:22] it's not the path I recommend to my coaching clients.

[00:04:25] What we do instead.

[00:04:27] While there's a temptation to get to FI as quickly as possible, there's a more productive

[00:04:32] and successful approach.

[00:04:37] I love mint.

[00:04:38] It's one of my favorites in my herb garden, but it grows so easily and spreads so easily

[00:04:43] that it can become invasive.

[00:04:45] So in order to protect my other herbs, I aggressively prune back the mint.

[00:04:50] It's okay to love your work, but if it's stealing time, energy and focus from other

[00:04:54] areas of your life, you're going to have to work hard to keep it in check.

[00:04:59] A lot of my clients are in the prune it back phase.

[00:05:02] They're asking to work from home to get back the commute time.

[00:05:06] They're leaving at three each day or going part-time.

[00:05:09] They're pruning back the work plan in order to give their other plants the space, sun

[00:05:15] and soil to grow and thrive.

[00:05:17] There are other things in life they value and they are ready to see those things expand

[00:05:22] and have a bigger role in their life.

[00:05:24] Number two, mini retirements.

[00:05:28] Sometimes it's not possible to prune back a work plan, so it gets removed temporarily.

[00:05:34] I have clients taking a few months off to a year or two.

[00:05:37] They're pulling out that work plan and giving other areas of their life some space.

[00:05:42] Mini retirements are a great chance to add some new plants as well.

[00:05:46] Big health goals, declutter goals, travel, adventure and rest.

[00:05:51] Mini retirements are like a test run.

[00:05:54] They allow you to practice your ideal phy lifestyle.

[00:05:58] It's less daunting to take a few months off than retire for 30 years.

[00:06:02] So while they might feel a little uncomfortable staring at a bit of dirt,

[00:06:06] they know it's just a short season to do their best to fill up their garden with new things.

[00:06:12] When people have let their work plan overwhelm everything,

[00:06:15] I give them about a 20% chance of staying retired.

[00:06:20] But the more mini retirements they've taken, the better those odds get.

[00:06:24] When I meet people who have taken four to five career breaks over the last 20 years,

[00:06:29] they're almost guaranteed to be successful and happy in retirement.

[00:06:33] They've had lots of practice, mastered the learning curve,

[00:06:36] and usually prioritize those other areas of life.

[00:06:40] And number three, seedlings.

[00:06:43] You might not be able to prune back your work or start a mini retirement today.

[00:06:48] Often clients come to me about six months before their mini retirement will start.

[00:06:52] In that case, I encourage people to start some seedlings.

[00:06:56] In the small moments, plant some seeds in little pots on your windowsill.

[00:07:01] Just like with the test and scale model,

[00:07:03] find a step you can take in one to four hours that will help to get a new plant started.

[00:07:09] Maybe it's researching pottery classes in your area.

[00:07:12] Maybe it's getting together with an old friend or trying a yoga class at the gym.

[00:07:17] Once you're able to prune back your work hours or take a mini retirement,

[00:07:21] you'll have some seedlings to go into the garden box.

[00:07:24] They won't be a full plant, but with this extra soil and sun and nutrients,

[00:07:29] they will fill in the empty space a lot faster than starting with seeds.

[00:07:35] Whatever you do, don't just keep your head down and push through at work,

[00:07:38] allowing it to overrun your life in order to get to five faster.

[00:07:43] Instead, focus on what you want your five lifestyle to be

[00:07:46] and slowly start giving that more of your time and energy.

[00:07:50] That way, retiring early becomes a seamless transition

[00:07:53] instead of a jarring and dysregulating one.

[00:08:00] You just listened to the post titled,

[00:08:02] How to Avoid Early Retirement Failure by Jillian Johnsrud of Jillianjohnsrud.com.

[00:08:08] And I'll be right back with my commentary.

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[00:09:42] This article reminded me of some recent posts I saw on a FIRE subreddit.

[00:09:57] Early retirees shared that they were surprised at how hard it's been to fill the hole

[00:10:02] that not working has left in their lives.

[00:10:05] So I think Jillian offers some sound advice here.

[00:10:08] Don't wait to figure it out.

[00:10:11] If your goal is to retire early because you hate your job,

[00:10:14] it might be more beneficial to just find a job you like instead.

[00:10:18] Because ultimately work and productivity in some capacity is important for our well-being.

[00:10:24] I like the advice from the pioneers who talk about creating a life that you don't need to retire from.

[00:10:30] And if that lifestyle includes working less or taking regular mini-retirements,

[00:10:34] you might even find the sweet spot where you're getting the best of both worlds.

[00:10:39] I've heard that the reward for early retirement for many of us is an existential crisis.

[00:10:45] When you're handed the keys to the castle and now have full autonomy over your time,

[00:10:49] and it can truly all be self-directed, this can actually be disorienting.

[00:10:55] So I like the advice in the article today.

[00:10:57] Start right now thinking about what you want to retire to because it's likely more than just sleep.

[00:11:03] But that should do it for today.

[00:11:05] Thank you for listening.

[00:11:06] Have a great rest of your day, and I'll see you tomorrow where your optimal life awaits.