This is Part Four of my series on retiring from the legal profession. In the first three parts, I did not even mention “the Number.”
We all know what the Number is. That is the amount of investments that you supposedly require so that you can retire.
I spent many years waiting to finally hit the Number and be able to retire. I asked my friends about their Number. I read articles about getting to the Number. I spoke to my financial advisor about getting me to the Number. I pondered the impact of my lifestyle on achieving the Number. I obsessed about what the right Number was and when, if ever, I was going to get there.
Strangely enough, I was only able to retire when I decided that I was going to retire and the damn Number was just going to have to be whatever I then had in the bank.
Here are my thoughts on the Number:
- Your friends all have different Numbers in mind. In my case, some of them already had achieved my Number and it was not enough for them. Listening to them was downright depressing.
- Financial advisors don’t want to tell you that you may be checking out early, so all of their calculations assume that both you and your spouse are going to live until age 95. It takes a lot of money to live to age 95. You may find yourself thinking about whether you want to delay your retirement so that you can be absolutely certain that you will still have a grand lifestyle at age 95. I didn’t. I decided to retire and take my chances.
- The Number changes with your lifestyle. I know one fellow who has a house in Toronto worth over $2,000,000. He is always worried that he does not have enough money. If he sold the house and bought a condo or moved out of town, he could free up some money to fund his lifestyle, but he is convinced that he must live in that very house for the rest of his life. Not me. I moved to the country and invested the difference between the value of my house in Toronto and my house in the country.
- I wanted to travel in my retirement, ideally in grand style. But I was not willing to work one extra day in order to afford that. So I travel, but I do it with the common people.
- The Number will be smaller if you are willing to move to where the cost of living is less expensive. I would have been delighted to live in a seaside village in South America if it meant retiring ten years earlier.
- Perhaps you can trade in your Jaguar every two years instead of each year.
- Or maybe you can lower your Number if you are willing to work part-time doing something which is a damn sight less stressful than practicing law.
My point is that the Number is important, but it is not the be all and end all. There are ways to retire on less than you think that you need. Life is about choices. Don’t work past your best before date if you can possibly avoid it.
There is so much more to say about retirement. I’ll be back!
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.