My retirement story starts long ago, when I was a child. At least, that’s when my habits were formed. I was raised by parents who came into their own after the Great Depression, and they were cost-conscious. Some might even call them cheap. Phone messages were written on neatly cut-up scraps of paper. Although now quite financially secure, my dad recently ate wilted, leftover salad instead of throwing it out. At our home, thriftiness has always been second nature.
Saving and investing was what you did with a portion of your earnings. Borrowing and excessive spending weren’t even considered. No one in my immediate or extended family had debt other than a home mortgage or possibly a small, temporary business loan.
I was trained, by example, to shop for bargains and live well below my means. So, when I graduated college and began working, saving was automatic. As soon as I had a paycheck, I opened a brokerage account and invested in an IRA. I funded it with the maximum annual contribution every year. I ended up paying for both of my master’s degrees with work earnings and some help from my husband. No debt.
I Wasn’t Normal — and That Helped My Retirement Nest Egg
Another way I was unusual was that I was intrigued by investing and wanted to learn all I could. I read, studied and even attended a retirement workshop while in my mid-20s. Unlike many 20-somethings, despite craving luxury goods, I was programmed to save and live modestly. In fact, one of my first big fights with my then-fiancé (who is now my husband of 30+ years) was when he wanted to shop at a department store instead of the outlet mall. I won that one.
All in all, my upbringing was a good thing. I am a savvy shopper, saver and investor. My husband and I always lived below our means, and continue to save and invest. We were part of the FI (not FIRE, which stands for Financial Independence Retire Early) movement before it was a thing.
Flash-forward several decades.
Compound Returns: The Magic Retirement Sauce
If you know anything about compound returns, you realize that maxing out retirement accounts for years with stock and bond investments leads to six- to seven-figure account values. Of course, it doesn’t hurt to cut investing fees to the bone. I only wish low-fee robo-advisors like Betterment and M1 Finance were available when I started investing.
For a conservative estimate of how much wealth you can amass with regular saving and investing, check out this example. (Although, we saved and invested much more than this.) By maximizing your 401k investing, you can become a millionaire in one step.
Invest just $500 per month for 30 years in the financial markets, earn a reasonable annualized 6.5 percent return and you’ll end up with $553,000. Now imagine doubling that amount and enjoying an employer contribution to your retirement account, as well. You can see how the magic of compounding can add up to a tidy sum.
Yet, now that I am financially able to retire, I won’t even consider it. Here’s why.
Why I’m Not Retiring Now — or Possibly Ever — Even Though I Can
I’ll admit, I’m one of the lucky ones that has work that is fulfilling and helps others. I understand that many people aren’t as fortunate as I am. So, I appreciate my situation. But, I also have a belief system that governs my thinking and behavior. Some might even say that this belief system is irrational. And, because of my “irrational” thinking, I don’t know when or if I’ll retire. The thought of retirement terrifies me.
Here are a few of the reasons that I’m terrified of retiring. (And if you think some of these thoughts are illogical, you’re probably right.)
- I’ll feel worthless if I retire.
- I might contract a horrific health issue that devours my entire savings.
- I will hate retirement, and be miserable and depressed.
- I will feel like I’m not contributing to the greater good of society if I retire.
- Even if I volunteer, it won’t give my life the same importance as work. (Just for the record, I currently volunteer by reading to children at the local elementary school.)
- People will look at me with disdain because I don’t have a job.
- My mind and health will deteriorate because I will become less disciplined.
- I will become too self-involved and less concerned with giving back to society if I retire.
In my defense, my fears aren’t completely absurd. Research supports the fact that many people lose their sense of purpose upon retirement and miss the collegiality of their co-workers. But, it’s not like I’ve got a room full of colleagues that I see every day at the office. I’m an entrepreneur, consultant and writer. All my colleagues are remote. And, being an introvert, I enjoy working alone.
Some people fear retirement because they lack other interests. That’s not me. I have a wealth of hobbies and interests and could easily fill my day. If I weren’t working, I’d be active with home improvement and design projects, pickleball, working out, hiking, movies and theater.
What I’ll Do Instead
In summary, I’m in good health, I’m financially OK, and I’m terrified of retiring. I guess that’s not terrible, right? There are worse things than not retiring.
Ultimately, I’d like to emulate Dr. Aaron Beck, John Bogle, Justice Ruth Bader Ginsberg and Warren Buffett. These people have achieved great prominence in their fields, with age 80 in the rearview mirror, and are still working.
For now, I’ll just have to keep working and wrestling with my foolish thoughts.
More From Our Smart Money Squad
- What I’m Doing Now to Ensure a Cushy Retirement
- What Living in a Pseudo-Retirement Community Taught Us About Money
- Trying to Retire: My Really Bad Case of ‘One More Year’ Syndrome
- Watch: How One Couple Retired in Their 30s to Travel in an Airstream RV
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