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| Thursday, October 30, 2008 |
| Retiring or Retreating? |
Escape Brooklyn posted today about the Yahoo Finance article: Meet the 29-Year-Old Retiree. You can read the story and the hundreds of (mostly negative) comments about the piece and decide yourself if this is really the case of a 29-year-old retiring or just becoming a stay-at-home Mom.
The story reminded me a bit of someone I know who made a very calculated decision when she was 30-years-old. I will call her Astrid.
When Astrid turned 30 she realized that she did not like her life very much. She was working for a large trade show company and had spent most of her 20's helping to plan and execute large corporate events. She did a lot of traveling and had enjoyed many lavish outings courtesy of her corporate clients. But planning and attending parties took a lot of work and time and while it was fun the first, second, and even third time she pulled off a golfing expedition or wine tasting party, etc. over the years it all got very old.
Plus, while the job had great perks (the travel, the fine dining, the free resort stays) the pay was not all that great. At 30 she was making about $65,000 and she did not see a lot of room for career growth. Most of her event planner colleagues tended to switch to jobs at fixed venues. You make about the same amount of money, but now instead of traveling every where, you stay put and organize the events for the one facility. She was not interested in ushering in the Ice Capades every winter and the Podiatrist convention every fall. Basically she decided that she really did not want her career afterall.
What she decided she did want to be was a stay-at-home Mom. The only problem was she was single and childless. This is when she put her grand plan into action. During her 20's she had managed to save about $60,000 in cash. She figured that if she was careful she could live off of this cash for a couple of years if she switched locations. So she quit her job, put all of her furniture and most of her possessions into storage, gave up her apartment, and moved to Rhode Island. In her new town she joined a couple of adult sport leagues, a sailing club, and purchased a dog. She found a very inexpensive rental and went into full "mate-search" mode. She let everyone she met know that she had "retired" from work to find a husband and start a family. She met a lot of single men in the sports leagues and at the sailing club. But ultimately she met her future husband while walking her new dog.
Today she is married, has three children, and is a full-time stay-at-home Mom. It took her three years from the time she quit her job to when she walked down the aisle. During that last year as a single and her first year of marriage, she did have to find work, but it was part-time. Since her first child was born she has not earned a paycheck.
I would not call Astrid "retired". I assume that as her children get older and she and her husband face financial issues over the years, she may have to go back to work. I would describe her current work status as "in retreat". At least from the corporate paycheck world. But she definitely would not be able to "retire" or "retreat" without finding someone (her husband) who was willing to provide that corporate paycheck with all of its associated benefits to her and now to her family.
Personally, I believe the 29-year-old featured in the Yahoo article can't call herself retired. At Escape Brooklyn points out - she has a job. It is just one which is unpaid and does not provide medical or dental. How long she can survive on her savings and investments is another thing all-together. The fact that she has those savings and investments is a great thing. It is too bad that she and her husband could not find a way to live just on his salary now - the fact that they can't now live with just one income gives me doubt that in the future, as expenses rise, she will be able to count on investment gains alone to meet those escalating costs.
re-tire to withdraw from office, business, or active life, usually because of age: to retire at the age of sixty.
re-treat a retirement or a period of retirement for religious exercises and meditation. |
| posted by Boston Gal @ 3:38 PM *
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| 14 Comments: |
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b.g.:
maybe she can write a financial column in nyt - she would be a better rolemodel than mp dunleavey. :-)
- s.b.
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what happens if they divorce? Legally she is not entitled to half his pension when HE retires if they were married less than 10 years. They may be saving on child care NOW...but, she is losing out on VALUABLE retirement benefits she could be earning in the work force, not to mention, going back to work will be more difficult after taking years out to raise the kids. What happens if there is a terrible acident and her husband can't work, or worse, dies. Better have enough insurance to cover all of that. Sadly, in America, the single biggest predictor for poverty in women of old age is motherhood. IF only our system were better designed to protect women (even men who stay home with kids) so that the choice to stay home with the kids does not literally screw you later in life. As you age, the kids will leave and go to college...you better be prepared for a real retirment.
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I wrote about this too, mainly from the standpoint of - I'm so glad I blog anonymously! The young lady at the center of the storm stopped by my blog afterwards, I've only been blogging a month so it was like a brush with celebrity. I think a lot of criticism is unwarranted but since she doesn't post actual numbers, it's difficult to tell. She could be sitting on a couple mil and never have to work again.
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Divorce, boredom, widowhood, empty nest--hardly retired at age 30. Nice try though.
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If she's an About.com guide she's making a minimum of $725 per month (and probably way more with advertising revenue).
She isn't "retired." I write from home as well and have 2 young kids. I am not retired--I am a freelance writer.
What a weird way she's trying to brand herself.
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I read the same article the other day. I was intrigued by the concept and all of the negative comments so I checked out her blog. It is not accurate to call her retired. Semi-retired perhaps as she still reports having $23,000 business income. Factor in that the other half of her calculations were the reduction of childcare costs and she is then a "part-time stay-at-home mom" who is semi-retired.
What she has done and the financial responsibility that was passed on by her mother is admirable. I wish I had that luxury. Both of my parents were financial disasters and have only gotten worse with age. At least they have stopped "borrowing" money from me.
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For anyone who works in the corporate world, the use of the word retiring is to leave going to your 9 to 5 job. I plan on doing that by 45 or so. I plan on working doing one of two other things, but I won't be required to be at a job every day, 9 to 5 with 2 weeks vacation a year.
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If leavin your 9-5 job is the definition of retirement, then Mr Chiot's retired 6 years ago. We started a business and are very successful making way more than he ever did at his 9-5 job. I don't know that I would consider us retired. We will probably never really be retired. I think that's old terminology that doesn't really apply any more to hardly anyone. I know lots of "retired" people that get part time jobs because they can't take the boredom, so are they still retired?
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Susy - You can consider it a retirement from the corporate world. I personally feel (look at the Dennis Hopper commercials about baby boomers and retirement) that you will always do something to keep yourself busy, maybe it is not 9 to 5. Society thinks we will get a job, work in a corporate job (or some manual labor job), then work until we are 62 and drop dead at 65. That was the old expectation. Now people are living longer and 60 is the new 50.
It all depends on the perspective of the writers, readers, and societal context over all.
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It's a change in careers. That's it. What's a shame, is with all that free time she still hires a nanny.
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I also read the article on yahoo and the comments. And some of the comments were... wow, I mean, just wow! I am amazed by the lack of reading comprehension of some (most) of the commentators. Maybe they did not read it at all?! For instance, a lot of the commentators seemed to be under the impression that she was just a stay-at-home mom that was dependent on her husband's income and health insurance even though it was clearly stated in the article, and I quote "The family has enough savings for DuPaix's spouse to retire as well, but after testing it out on a three-month paternity leave, he decided he likes his full-time gig."
Clearly, there is/was an almost total lack of understanding of what financial independence/retire early (FIRE) means. It does not mean that one has to follow in the traditional footsteps of late retirees and restrict oneself to playing golf or traveling. It simply means that a person has saved enough money to live of his/her investments and be financially independent so he/she can do what he/she wants without being dependent on a job or a spouse or whatever. It means financial freedom. With a 2% withdrawal rate, that can last forever.
"Astrid", on the other hand, is not financially independent. She is entirely dependent on her husband. She is a stay-at-home mom in a single-income household. Madison, the 29-year old in the article, is a stay-at-home mom in a financially independent household, where her husband has chosen to work, not that he needs to, and she has chosen to start a blog, not that she needs to. They are in an entirely different class than most people, because they don't work because they have to.
Sorry, I don't mean any offense, but after going over the comments on yahoo, I just had to rant a bit.
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I haven't read her blog, but the article says they have enough money saved for her husband to retire as well ... so I don't get all the harsh treatment.
I guess, technically, she is a SAHM since her DH works and she has kids, but they both could "retire" if they wanted to (the article says they gave it a try for a couple of months).
Before DH and I even attempted to conceive children, we paid off all of our non-mortgage debt. In the 14 months before I actually had my first child, we managed to stash away $85,000 in cash at our local bank in addition to our retirment savings. Because we learned to live on less than half of our take home pay and because we had the nice cash cushion, this stash of cash made it possible for me to quit my job to become a full time SAHM. However, it was definately not enough for us both to retire. So, you could call me retreating (I have no desire to ever work full time again) ... but I'd definately consider the subject of the article to be retired.
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I guess you have to define retirement. i believe that the notion of retirement is also different now than it used to be, too. i'll be retiring in 3 years at 41yrs of age from my current job. i will get another job, though, because i can't see myself not actively working at 41. i'll be retired from one job, but i'll be working in another.
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I know a lot of people who would be pretty damn happy making $65K at age 30.
Seriously... what an upper-class notion!!
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b.g.:
maybe she can write a financial column in nyt - she would be a better rolemodel than mp dunleavey. :-)
- s.b.