My dad turned 70 this year, and the hard fact of that number induced a sudden fearful realisation; my dad is going to die one day. Of course it is inevitable, but as humans we have the ability to ignore the obvious. We just brush it aside and carry on. This day, however, made me take a mental step back and actually look at my dad, through the eyes of someone who has just met him – and he looks old.
Yes, he devotes time to maintaining his mental and physical fitness. Being long retired, Dad is under no obligation to get out of bed by a certain time each day, spend the day sitting in an office, teach children, or labour. He chooses to do those things. Dad is active every day, usually helping others in some capacity. He will give anything a try, and do anything for anyone – but there are days when he had been unwell. Recently he underwent treatment for skin cancer on his face. Everything is fine, however he is one of the lucky ones. 2016 has been a depressing year regarding cancer diagnoses in, and deaths of, my friends’ parents.
A secondary realisation that came from looking at my dad was that by the time reach his age, the Government will want us to still be working. At the moment, the pension age in Australia is 65, raised to 67 for those born after 1957 … call me a cynic, but I firmly believe in the next 20 – 25 years (when we will reach this target), the requirement will have increased again to 70. Neither Mr. ETT nor I want to be obligated to work until that age, which is why we are beginning to engage with the idea of FI. We are too late for the full RE, because the time it takes the compounding effect to work for us will put us at the retirement age anyway, but we are working toward a couple of goals:
A Comfortable Retirement
Regardless of the age we retire, we want to have enough to continue or only slightly reduce the standard of living we have now. AFSA produces calculations every quarter detailing what modest and comfortable levels of living look like for retirees. We would like to be even better than their calculated standard.
No Reliance on the Pension
We’ve had a good life, and by being sensible now, we should be able to continue to do so without falling back on Government support. There are a lot of people who haven’t had the opportunities we have had in life (like basic financial management education), or are forced to stop working due to ill-health. I would rather the support go to those who genuinely need it. I see the pension as a safety net, not an inalienable right.
We Want to Retire a Little Early
Even if it is only a week, we want to have enough to be able to make a statement. “Government, we can survive for the next week without needing any support from you. We are choosing to retire at 69 and 51 weeks”. That is what FI is all about – the freedom to make choices.
At this point, we aren’t seriously on the path to FIRE. Quite frankly, our minimum Savings Rate is only slightly above the Australian average, which was 12% in March 2016. The difference is that we have a long-term goal for our investments. Hopefully as they begin to grow, we will become more inspired. I will be honest and declare right now: you will never see a savings rate of 70% on Enough Time To… and we are OK with that.
Will you be able to retire early?