Category Archives: General

When I talk to friends and family about my goal of reaching pretirement, the first reaction is polite dismissal and maybe some teasing about laziness. On the other hand, if I talk about “early retirement,” there’s a built-in assumption that I’ve made my $1.3 million and am checking out.

Actually neither is the case nor needs to be. It’s a matter of language and of challenging some of the assumptions we’ve been given. Unfortunately it can take a lot of effort and some language changes to shift mindsets.

As I turned 30, I realized I had no money and no plan but also realized I didn’t want to be a wage slave for the next 30 years. That was 15 long years ago. I set a very simple goal at that time: I wanted investments to be able to cover my bills by the time I was 40. Given that I was starting at NO investments and NO money, 10 years seemed like a tight timeframe for reaching that milestone.

You know what? I actually reached that goal ON TIME. It took some magical stock options, some decent real estate purchases and a lot of frugality and I was there. Unfortunately, I immediately flushed that success with some expensive purchases, including my expensive current house. So now I’m crawling back again to that same goal, hopefully wiser and definitely even more motivated to get there as fast as possible.

And, although I now know many people seeking pretirement, I still get the same looks from others when I talk about it. Some are completely amazed: “I thought you couldn’t take your 401(k) until you were older?” or “What are you going to do for money?”

That’s part of the reason I started this blog. This “in-between” state between working and retirement needed a new name. “Early retirement” just doesn’t do it for me. Here’s how I see the differences in the terms:

• “Retirement” means you’re eligible to pull out your retirement funds and are eligible for Social Security and Medicare.
• “Semi-retirement” means you’re working part-time, but have finished your career and are eligible for pension.
• “Early Retirement” means you’ve elected to take social security or a pension (Ha Ha, like anyone in Gen X gets a pension!) at the earliest possible age, foregoing larger amounts later.
• “Pretirement” to me means you’ve reached a state where your investments generate enough funds to cover your monthly expenses.
• “Semi-pretirement” then means you don’t have QUITE enough money to cover ALL your expenses, but you have enough to choose to work part-time to cover the gap. This is where I’m at today.

Unfortunately a lot of what I’ve been reading online about this time of our lives uses all these terms interchangeably, making it hard to find great resources. Take one great resource: Joe over at Retireby40. He uses the term “retire,” by which he means he is leaving his former career. Since he is living off his wife’s salary and staying home with their child, I’d say he’s in the same boat as me, “semi-pretired”. Should his half of his bills be covered with his investments, I’d move him into the “pretired” category. (Keeping in mind, that with shared expenses, it can get a little muddy.)

The other reason people just don’t get the pretirement concept is the mental box so many of us have been trapped in.

I freed a thousand slaves I could have freed a thousand more if only they knew they were slaves.
-Harriet Tubman

Nearly all of what we’re taught about retirement from an early age is that it’s something you do when you’re old and that you’re supposed to be a worker drone until the day you’re put out to pasture. Then you pollute the world with your RV for a few years until you have close call one day and have to stop driving so you watch TV and spray chemicals on your lawn until you eventually have as stroke and finally die with your family sitting in a circle around you in a hospital bed… Wait, what was I talking about again? Oh yeah, “retirement.”

The second result on Google for “retirement” (after wikipedia) is CNNMoney, featuring a prominent retirement calculator. The notice on the extremely ridiculous calculator says “How much to put away each year if you hope to retire at 65 with 80% of your pre-retirement income.” Gee, I wonder who wrote that text? Certainly not the people wanting to get their grubby hands on my retirement money, right?

First of all, age 65?? No thanks. I barely survived the last 15 years. I’m not doing another 20. TWENTY!

Secondly, “80% of your pre-retirement income”? Say what, now? Let’s say I made $100,000/year. Do I really need $80,000 every year forever? What the hell for? What if I’d been making $300,000/year? Do I then need $240,000 in retirement or I have to eat cat food? These online calculators should be ignored with extreme prejudice.

The nonstop lectures to “save for retirement” are absorbed shallowly like warnings to not drink too much or give up smoking. Yeah, yeah, I’ll get around to it later…. The implicit message is to live it up now, but make sure you save a little as you go along, not too much, less than you’d tip at a restaurant. You won’t even feel it. And, like I always say, that is absolutely true if you start early enough and work until you’re a senior citizen.

However, if you DON”T want to spend your whole life working, you have to challenge authority and go about things a little differently. You’ll have to live frugally early. You’ll need to invest heavily as early as possible. But most of all, you’ll have to stop thinking “retired” and start thinking “pretired.”

Every era has its own fads. The ’60s had marijuana and hippies. The ’70s had bell bottoms and swinging. The ’80s was about cocaine and hair gel. Sometimes it’s hard to tell if something is just a fad until it’s in the rear-view mirror. And sometimes those fads remain as a part of the culture, even if they’re not a dominant force any longer. Witness the proliferation of health clubs and sushi.

So is pretirement just a fad destined to fade away or will it stick around and build into a part of our culture?

Only time will tell, of course, but certainly the movement is growing. The proliferation of “early retirement” blogs is quite significant and I personally know many people participating in the phenomenon, even though they don’t have a name for it. In fact, most of the folks I know just say they’re “taking some time off” or are simply looking for the right opportunity. The phrase “early retirement” doesn’t really capture the meaning, because it actually has a specific meaning related to taking social security and pensions. Plus the word retirement itself implies that you’re done.

I’m sure the data exists somewhere in the morass of government information about how many Americans are living off their investments, but I got tired of looking. Clearly the government is more interested in measuring poverty and worker productivity than in highlighting how many people are opting out of the system.

Aside from the dozens of pretirement blogs that have popped up on the internet, there has been a growth in interest in related topics, including tiny homes, renewable energy, home gardening and even doomsday prepping.

Obviously this is largely driven by the economic collapse, where people realized how insecure their lives had been and began searching for ways to protect themselves and their families. For others, it’s just about freedom and escaping the trap. And, it’s worth mentioning that other category: the folks who were canned by their employers and left out to dry by our uncaring society. Those who were able to construct a perpetual income source in excess of their monthly expenses have often found they found more fulfillment from doing what they want to do every day than by filling their houses with more stuff.

If the economy booms again, Americans will jump right back in to their endless pursuit of material fulfillment. They’ll bloat the economy with cheap crap from China and we’ll be well-positioned for another painful collapse.

But there will be many who will learn from the past, realize happiness doesn’t come from buying more stuff and will opt for a different lifestyle. How many? Hard to say. Will it be enough to grow into a recognized slice of American society or will it be another pass fancy? Only time will tell.

But one thing is for sure: Unlike most fads that come and go this one will actually benefit those who try it. I expect everyone who learns about this lifestyle to at least pick up a few concepts that will make their own lives better.