When I first started writing this blog Mr Livslevandes and I were diligently saving money and paying off debt in order to make it possible for him to retire at the age of 61, on January 1st 2019. He’s been talking about it for years, and it’s been a part of our long-range planning since… forever, or at least it feels that way.
So this year we’ve been getting into the details and actual preparation for the big step. The Swedish system for pensions is not as simple as it once was (work, decide on the date, notify your employer and the ministery for pensions and off you go). Nowadays there are options, a lot of options. You can withdraw some funds on a certain year, and others at another time. Some payments you can halt again if you decide to go back to work or maybe just save the money a bit longer, others you can’t stop once you’ve started. Some of the funds are stock-related and may go up – or down – if you leave them, some are not.
Mr L is not a numbers man. Luckily for him, he’s married to a woman (me) who has a really good relationship with her inner nerd, and excel-sheets. So I’ve been trying out all kinds of different scenarios and compiling them into diagrams so that he can get a picture of the choices he has.
But the problem with the future is that it’s really not foreseeable, is it? This – economical planning for the rest of his life – it’s all just guesswork. And every guess affects the rest. Just the basic one: how long is a lifetime? Should he go for maximum amount in the first 15 years, and just a minimum after that? But he’s only 61 years old and in good health, and they say that 70 is the new 50 – maybe he wants to travel and do expensive stuff at 85 as well? Since we live in Sweden, at least we don’t need to plan for medical costs, since that’s basically covered by tax-funded means. Or at least it is today. Who knows what the world will look like in 25 years from now… But some assumptions have to be made, and a change in the way Sweden handles the whole society will not happen overnight. (Or if it does, that will probably mean that the monetary system will break down altogether, and then this doesn’t matter anyway.)
So, basic assumption 1: life will be somewhat like it is, with gradual changes only. Assumption 2: he’ll be healthy and vigorous until 80, and then he’ll be less adventurous. With these assumptions I managed to find a way to (hopefully) maximize the income from the funds for the first 20 years. Looks good on paper, at least… And so we have a plan.
Or rather had… because when we really got down to it, it became real in a way the vague idea hasn’t been. And in October, when Mr. L celebrated his 61st birthday, he decided that he didn’t want to retire full time after all. He settled on working part-time instead. His employer was pleased to have him stay on, so it all worked out. From January 1st he will be working 2 days a week. Since I work only 3 days, and his working days will be on two of those, that means we will have a lot of free time together anyway.
Although all of my calculations now are outdated already, I think that it was a wise choice. I think transitioning from full time job to no job at all is a big step to make. Economically him working half time brings in about the same amount of money that we had planned to withdraw from the pension funds, so it doesn’t effect our everyday life planning. The only difference is that the retirement money can stay in the funds longer, which (barring economical catastrophies) is usually a good thing.
So 2019 will be the first step towards a new way of living for us. I’m really looking forward to it!
Things I am grateful about: that the Swedish pension-system works (even though it’s complicated). That Mr L is healthy enough to choose to keep working. That we will have more free time together soon. And that our frugal way of living gives us choices.