Investing, money

Retirement: Is It Contagious?

Today one of my friends and coworkers is retired after 20 years in the tech industry.  Not such an unusual thing, except that he’s only 44 years old.  He’s doing so about one year after another friend and co-worker, also way, way under 50 retired as well.

At his going away party it was interesting to see and hear the folks wishing him well.  For some there came a verbal statement of envy; for others there was a look of, perhaps, longing for a similar fortune.

For myself… I feel a bit of longing for such a possibility.  I’m 33 years old. I have enough assets to live relatively comfortably for 7-10 years without working.  But what good would that do?  I guess I could take a year or two off, learn a third language (probably Spanish) and tour the globe.  Then I could go back to school and finish my graduate work in finance with a Financial Engineering and Risk Management Master’s.  Depending on where I went to school tuition could set me back about $12,000-60,000 (state vs. private).  At which point I’d probably go back to work, either back to work as an Engineer or entering a new job in Finance. Either way any retirement at this point would be temporary.  I have not yet achieved escape velocity from planet Work.  I can achieve low-Work orbit, but any such launch would decay after 10 years or so.

Looking forward I see my median work escape window (or WEW) as likely to wax and wane depending on time at work and my investment performance.  My current WEW, which I guesstimate at 7-10 years, currently has a median expected value of 8.5. In a high-return year my median WEW can grow about 3 years.  In a strongly negative-return year my WEW stays about constant or can even retract (say by 0.5).  On average my WEW has grown about 0.77 years per working year over the last 11 years.  11 years ago, when I started my engineering career, my WEW was about 0 (perhaps closer to -0.2).

So for now my financial immune system is fending off the (early) retirement bug.  For others, in their forties and fifties, [and with bigger WEWs] early retirement may indeed be contagious.  As with many other future looking statements, only time will tell.

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