How to Retire

Even in my 30’s I dreamed of early retirement. My husband, Martin, wanted an early retirement, too. The freedom to do whatever we wanted whenever we wanted was a powerful pull. It’s apparently a powerful pull for a lot of people because when we announced our retirement date, the number one question from young and old alike was, “How did you do it?” How did we get to early retirement? We soon learned everyone thought we had some secret like we were genius investors with some super method we discovered and would now share with the world. What we discovered is really, really basic. And it’s less about investing and more about saving than anything else.

If there’s one important, most significant thing we did, it was to shift our minds away from consumerism for consuming’s sake. Instead, we make it a practice to ask ourselves before buying, “Is this a need or a want?” Sure, we bought a lot of stuff to satisfy our wants. Martin has his serious rider bicycle and a motorcycle. We live on six acres so I can garden and grow food to my heart’s content. And, then, there’s my John Deere tractor. But, bottom line, those are to us necessary items because they provide some of what feeds our souls. They aren’t toys that sit in the garage gathering dust. We also have our share of gadgets like the iPad, albeit version 1, along with a remote keyboard on which I’m typing at this moment. My point is we live a rich, full life and have been for decades while living below our means and stashing huge amounts of money. When you reach the point where you’re living on 40% of your gross income and you’ve stashed enough reserve to generate that income plus taxes for the rest of your life, you also reach the realization you can retire. But back to the mental shift. If you can’t or won’t shift your mind to a different view of the world around you, you won’t succeed. That’s how important the mental shift is.

Before we made the mental shift, we were like most Americans – spenders, consumers. We’d go to the mall whenever we didn’t have something else to do, always walking out with new stuff. We worked hard, made a good living but we spent just about everything we made and even spent what we hadn’t made yet by borrowing and borrowing. We wanted to give our kids a nice home in a nice neighborhood in a good school district. We wanted to fit in with our neighbors, buying whatever the requisite amount of current stuff. At work I wore designer clothes and jewelry, walked in every morning with a latte and muffin from the shop down the street and went out to lunch every day. But I also worked for a man named Artie Burke. Some of the employees called him “Burke the Jerk”. Why? Because every quarter, just before we were paid bonuses, he’d start the staff meeting with a speech about how we didn’t need a new couch or a new car or an exotic vacation. He’d go on to say how we wouldn’t get rich by inheriting money or marrying money or investing in some get rich quick scheme. Instead he told us to save our bonus, investing it in some steady eddie stock or bond. Well, we were mostly thirty-somethings with mortgages, kids, car loans, credit card bills. And here’s this rich guy telling us we need to save our bonus? Whew! The jerk! Didn’t he understand we were barely scraping by on that lousy salary he was paying us?

Today I thank my lucky stars I worked for Artie Burke. Because somewhere in all those speeches something clicked with me. My mind started to make the shift. Easy right? Wrong! Whenever, I talked about saving, my better half would reply, “We’ll save when we can afford it.” It took time and circumstance for him to realize we could afford it whenever we wanted to afford it. I had to become his Artie Burke. So, it took what seemed like forever to get him to make the shift but my opportunity came one evening in the form of a promotion and substantial raise…for him. I can still remember how proud Martin was when he came home and gave me the news. All smiles, he said, “Now we can afford to buy___________________.” You fill in the blank because neither of us can remember what it was we wanted to buy. That’s how unimportant it was to our lives. My response? I said, “No. We’ve been living without it and we’re going to keep living without it.” I meant the raise, of course. The money. That’s how we started to ratchet up the savings into our 401K’s. Every time we got a raise, we increased our savings by that amount until the contribution was at the maximum. Then we started to pay off debt. Then we accumulated an emergency fund of 8 times our net income. Then we set up a realistic budget. We gave ourselves an allowance also known as “blow money” meaning you can blow it on whatever you want, no holds barred, no questions, recriminations or resentments allowed from your partner. This last one probably saved our marriage.

So, now we’re recently retired. We’re ready to reinvent ourselves. We’re ready to revisit and rediscover. We’re ready to renew our souls. We’re ready to explore. We have options and opportunity. We don’t want to pull back but rather to forge ahead as we reinvent retirement.


Copyright 2015 Kathy Merlino All Rights Reserved

9 comments on “How to Retire

  1. Loved reading your blog. I read almost every page. I’m planning on fulltiming in my RV at the early age of 53. I own a house in California and will be selling it and wonder how much I will need to save for retirement. I expect to workamp for about 10 years to settle in. In Ca I make a good living but don’t expect I will need that much money to live in an RV. Never ending worries I guess.


  2. Great read! Early retirement seems like a good plan to catch up to the things that you wanted to do, but never had time or money for doing it before. I guess the real essence is for them to have a better sense of direction, and a much wider view towards life. Maybe meditation or yoga could help attain inner peace. Anyhow it would be years until I retire, but I guess planning ahead is a great way to go.
    Have a great day!


  3. Play the game to forecast your, spouse and family Nest Egg at retirement and retirement income. You can also learn & evaluate various investment strategies. The game is free and fun to play.


  4. Hello Kathy, It has been fun reading your blog. I plan to start a blog very soon and retire very soon. I found your site when looking for a retirement blog. It is a little scary but after a 29 year career in nursing it is harder to go to work these days. So many people tell me they were not sure they could do it financially but after they took the plunge they could not be happier. It is a scary/not scary feeling. Enjoyed reading your blog.


  5. We retired one year ago and like you, our friends now want to understand how to know when the time is right, not only financially but how to spend time. I admit, it took me some time to feel okay doing what I want to do, but our days are full and very busy! I can identify with the consuming for consuming’s sake and we have really slowed the spending. We get nervous about the wild swings in the stock market, but continue to remind each other that we have a plan…so let’s work the plan.


    • I agree Deb. It takes time to adjust, emotionally, mentally and financially. And the timing that feels right for one person may not be the best choice for someone else. Like so many events in life, getting married, having a baby, buying a house, relocating for a promotion or job, timing is individual. It’s definitely not one size fits all.


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