Reflections on Two Years of Early Retirement

Today is the second anniversary of the start of my early retirement. I can't believe that it's already been two years. I thought this would be a good opportunity to capture a few thoughts on the experience to date.

Financial - Needless to say, the bear market of 2008-2009 has been a significant negative impact on our retirement savings. However, I have learned that keeping funds for near term (5 years or less) expenses in safe investments such as CDs, bonds and money market accounts can reduce the short term impact of a falling market. In addition, building a margin of a safety in our retirement calculations helped make a falling market less of an issues. We had boldly targeted for 100% of our pre-retirement income, even though we could live on less than 80%.

These actions will enable us to have enough funds for the next six years of retirement expenses and (hopefully) give our equity investments time to recover in the next five years.

My biggest mistake was not selling some equity investments to pay off our mortgage in 2008. I corrected this mistake in May, 2009 and we are now 100% debt free.

Family Time - For the past two years, I haven't had to make the tough choice between family and work. I've been able to spend many more hours with family, attend almost all of my daughter's events, and taken more quality vacations. I am happy that I didn't miss my daughter childhood years.

My only regret is that my father passed away before I took early retirement. I wished I would have had more time to learn more about my dad, especially about his early life.

Health - Overall, I think my health has improved, as evidenced by lower weight and significantly reduced foot pain. I think my better health is primarily due to less stress and better eating habits. However, I still need to confirm that there has been an improvement for other measures, such as lower cholesterol.

Personal Development - I have used the last two years to learn about areas on which I may want to focus in the phase of life. I have taken courses on plumbing, masonry, electrical wiring, landscaping, gourmet cooking, Chinese, and real estate agent licensing. In addition, I have done part time jobs in the fields of finance, education and the Internet. Finally, I've been doing volunteer work in a nature related field.

For now, I still do not have clear vision of where I want to head, but I have enjoyed dabbling in these different areas.

At this point, I am still glad that I took the opportunity to retire in my forties. Even if I should be forced to return to full time work in the future, the personal gains have far outweighed the lost income and other financial losses.

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This is not financial or retirement advice. Please consult a professional advisor.

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