One More Year Syndrome

JC Project Freedom

I have read plenty of financial blogs with “One More Year” syndrome and I am one of them. What’s this syndrome about? It refers to the tendency to postpone retirement. It is driven by the fear of losing the identity that provides, daily social interactions with colleagues, and living on a reduced income. Financial insecurity and a desire to accumulate more wealth are common causes of this syndrome. We always say to ourselves,” Just one more year, and then I’ll retire.” This mindset can lead to prolonged work stress and missed opportunities for enjoying life outside work. It’s essential to strike a balance between financial security and personal well-being when considering retirement.

We have many moving parts that involve children, houses, insurance, health, debt, and building passive income streams. We have a bucket list which we would like to accomplish. All these challenges make things very interesting and difficult to define when is the time. What makes leaving paid employment for early retirement difficult? I have a few major challenges at the moment that bring fear about future uncertainties:

  • I have lost 4 jobs between 2017 to 2019. The fear of retrenchment and losing a job every Christmas is daunting
  • We have 2 properties at the moment, I have this fear of a property downturn
  • Aging parents and parents-in-law. My brother-in-law will require a nursing home when they are not around.
  • Education cost for the children

How should we overcome “One More Year” syndrome?

1. Visual Your Retirement

Have you imagine your life after retirement? What are the pet projects that you have put away and no time to pursue? Where do you see yourself? Where will you be staying? You need a clear vision which will motivate you to move towards this goal.

2. Set a Retirement Date with a plan

You need a plan and run the pro forma numbers on how much you need to sustain the lifestyle that you are looking for. You need to run different scenarios to see how long it will take to reach the goal. Then proeed to select the date to take off on your own.

You need to understand your financial situation, evaluate your savings, investment and your pension plans. Understand your post retirement expenses.

For example, you need to achieve S$1.4 m in liquid asset, run different saving rates and investment return to forecast growth to achieve this quantum. Then you can decide the date you can take off. Knowing your financial needs will give you confidence in yoru decision.

Amazon Jeff Bezo uses the regret minimization framework. He quit Wall Street and forgo year end bonus to start Amazon. He knew that he will regret his life at age 80 years old if he did not start Amazon. What if he fail, he would not regret he participate in the rise of internet. He will regret if he never try. What’s your one thing that you will regret if you never try?

My personal target is to achieve S$120,000/annum in terms of dividend out of liquid assets in equities amount of S$3,000,000. In addition, I need to sell the 1st property and divert the money to the 2nd property to reduce the outstanding mortgage.

3. Address Emotional Concerns

Some of us will retire permanently. You need to plan activities for your retirement as suddenly you will find yourself with lots of time. Explore new hobbies, travel, volunteer work or part time jobs will help to fill time meaningfully. Understand that retirement does not define your worth. You are worth more than your job title. You need to remember that you are just a number in an organization and they can replace at any time.

4. You are older than yesterday

You are not getting younger. There is no turning back in time. My 20s flew by, 30s were exciting and I am already in my early 40s while writing this. I have chest hair turning white. When we were younger, time past slowly. Nowadays time accelerates. I think about death and the brevity of life especially when I have a friend who passed away in his early 40. I am no longer attending wedding events and baby showers but more wakes.

I have a mental note that if I live to 80, I have slightly lesser than 50% of my life span left. This spurs me to keep learning and try new things. I am entering the decumulation phase which is between 40-60 years old. This age range, you have good health and still mobile. This is the best time to build memories and gain more experience.

5. Health and Mental Well being

You should prioritize your physical health. When you have more time, you can prioritize exercise, nutrition and have regular health check-ups. You should seek professional help if you struggle with anxiety or depression.

6. Mini-Retirements and Bucket List

Let’s take mini-retirement by taking extended vacations and sabbaticals to experience life without work. This can help you adjust mentally. Create a bucket list to list activities, places you want to go and stay and experiences you want to enjoy during retirement.

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