One of the interesting things I’ve learned as a blogger is how many people suffer from The One More Year Syndrome.
Ironically, I suffer from it myself.I suffer from The One More Year Syndrome, as do many others. Why do we work when we're FI?? Click To Tweet
The question plagues me: “Why do so many folks decide to continue working, even after they’ve achieved Financial Independence?”
Today, I’ll tell you about my logic for working “One More Year”, but I’ll go a step further. I’ve reached out to fellow bloggers on the Rockstar Finance Forum and the FinCon Facebook group and will be sharing thoughts from some of the best personal finance minds on the issue. Most of them have also suffered from the Syndrome, and have worthwhile thoughts as we consider this topic.
My Concerns: The One More Year Syndrome
While I’ve technically achieved Financial Independence in the past few months (woot woot!), I’ve decided to work One More Year. My main reasons (“The Root Causes Of My OMY Syndrome”) are summarized below:
- Health Care Cost Inflation: Given that my wife and I will need to buy private health care insurance for ~10 years, I’m very concerned about the escalating costs of health care, and the exit of many insurance companies from the market. It’s too soon to know where all of this will end up, and the assumption I’ve used in our retirement cash flow model ($20,000/year) may be insufficient to cover the actual costs we incur. The same concern holds true for inflation in general, as we’ve become a bit “conditioned” to a low inflation environment which may not continue throughout our retirement.
- Market Returns: The stock market is currently “highly valued”, with the current CAPE Ratio at 29.5, well above it’s mean of 16.5. Historically, periods of high CAPE ratios are followed by periods of lower than average market returns. While we’re planning a Withdrawal Rate of 3.5%, I’d rather work One More Year and reduce the anxiety of a potentially extended period of below average market returns.
- “You’ll Never Make The $ You’re Making Now”: I have an Uncle who retired in his mid-50’s. A few years ago, we were chatting at a family wedding, and I mentioned I was considering an early retirement. His one piece of advice to me was to make sure I was ready, financially and otherwise, before I pulled the plug. “You’ll never make the money you’re making now”, he said, “so make sure you’re 100% comfortable with your financial situation before you retire”. Words of wisdom, from one who has gone before. I decided to listen, and it’s triggered my own affliction with the One More Year Syndrome.
- “OMY Was The Best Decision I Ever Made”: I’ve got a friend, Kirk, who has guest posted on this site (see A Road Less Traveled and Retirement: The First 90 Days). He also suffered from OMY Syndrome in his final working year, and he and I had several discussions about it at the time. Now that he’s retired, he looks back at the decision to work One More Year as one of the best decisions he’s ever made. While it seems like a long time when you’re in the middle of it, it passes like the wind, and you enjoy the benefits for the rest of your life. He has no regrets, and his optimism about OMY has influenced the decision I’m facing today. BTW, Kirk is now hiking the Pacific Crest Trail, and I wish him a successful journey to Canada!
The One More Year Syndrome – What Others Have To Say
I am not unique in my affliction. In preparation for this post, I reached out to others who are knowledgeable about personal finance and retirement planning issues. I was surprised by the number of folks who have written about the OMY topic, or who are suffering from it themselves. Below is a summary of what some of the experts (most of whom are also my friends) have to say on The One More Year Syndrome, along with some links if you’d like to dig more deeply on the subject.
Fascinating stuff, this.
Vicki @ Make Smarter Decisions
Vicki’s post Finding The Cure For One More Year Syndrome outlines her approach to the OMY Syndrome. She decided to “retire”, but planned to continue with online teaching for 3 years to boost the service credit she needed to optimize her retirement pension. A few months into her “retirement”, she was offered an “interim” administrative position. You guessed it, two months turned into a year. She’s been struggling with the OMY Syndrome ever since and wrote this article to declare her intention to break the affliction and proceed with retirement. She’s retiring on June 30th (congrats, Vicki, a major accomplishment at Age 50!!), though she’ll continue to do some part-time online teaching to earn those credits toward her pension.
Ty @ Get Rich Quickish
Ty wrote the post There Are Worse Things In Life Than Working last September, a philosophical and touching post about a time on the back porch with his Dad, who continues to work in spite of being past “normal” retirement age. And, about his Father-In-Law, who was diagnosed with pancreatic cancer just 6 weeks after he retired. Seeing the fate of his Father-In-Law, Ty was pressing his Dad on why he was suffering from OMY Syndrome, and why he didn’t just retire. “There are worse things in life than working”, said his Dad. Ty continues to explain the psychological barriers to retirement, and why for some folks (like his Dad) the OMY Syndrome isn’t necessarily a bad thing. Find something to Retire To before you retire, even if it means working One More Year.
Doc @ Physician On Fire
My friend, “Doc” over at Physician On Fire speaks positively about the OMY Syndrome in The Power Of One More Year. He points out the tremendous financial benefit to high wage earners of working OMY (e.g., ~$5 – 10k boost in annual retirement income!!). Rather than view OMY as a syndrome, he encourages folks to consider it a blessing. Embrace the gift! BTW, congrats, Doc, on your upcoming “part time Doctor” strategy, sounds like a winner to me.
Sam @ Financial Samurai
Sam’s an awesome writer, with a hugely successful blog. He wrote Overcoming The OMY Syndrome To Do Something New about his experience “gutting it out for one more year to bank another six-figure bonus.” He realized he was sacrificing “Time” (which he craved) for “Money” (which he didn’t need), and pulled the rip chord in 2012. He shares his thoughts on how he cured his OMY Syndrome. It’s a great piece, as is typical from a writer of Sam’s caliber. (BTW, he also has some good thoughts on negotiating a severance package, a topic on which he’s written a 100-page book. Great stuff, this!)
Paul – A Reader On The Retirement Manifesto
This comment touched me, and Paul was gracious enough to let me share it with you as part of today’s post. It speaks to the reality of one struggling with OMY Syndrome. What I really appreciate about this comment is that it comes from the heart of a reader. I cherish the comments you all leave on my site and felt this reader deserved recognition for his particularly poignant comment. You can see his original comment on the post How To Know When You’re Financially Independent:
There are others who have written about the topic, and even some podcasts on the topic. I’ve had to whittle this down due to size, but I’d encourage you to listen to an excellent podcast on the topic from my friend Benjamin Brandt’s Retirement Starts Today: 5 Reasons to work OMY. There’s also a good post on New Retirement titled Worried About Retirement? Change Your Perspective. The prestigious White Coat Investor also weighs in an excellent Guest Post from Doc @ Physician On Fire titled Beyond Enough.
My Final Thoughts
I’ve done a lot of thinking and reading on OMY Syndrome as research for this post. Of all the things I’ve read, I’d decided to “internalize” the philosophy espoused by Doc @Physician On Fire. I view OMY as a privilege. An honor to experience. A bonus in life. We’re blessed to have the opportunity to retire at “younger than normal” ages, even if we proceed with One More Year of working.
In my case, OMY means Retirement at Age 55 instead of Age 54. Pinch me! Really? What a blessing in life to have the “problem” of decided to retire at Age 54 or Age 55. Are you kidding me??!! 99.9% of the world would trade places in a minute. If you’re suffering from OMY, read Lesson #5 from this article, and look at the Forest, not the Trees.
Be intentional in your thinking, and take the time to be thankful. Look at your “glass half full”, not “half empty”.
Your life, and your retirement, will be better for it.
That’s what I’ve decided to do.
What about you?
P.S. – Cold Water Swim Update: Happening Now!
At precisely the time this post gets published (yes, I pre-scheduled it), I will be entering the waters of Lake Michigan for my Lake Michigan Cold Water Swimming Challenge with The Dolphin (aka The Dolphin Revenge #3). The Dolphin and I have “playfully competed” in Zurich and in London. Today, as you read these words, I hope to be swimming in Lake Michigan’s balmy 60F/15C water, just off Ohio Street Beach in downtown Chicago. I’m sure I’ll have a future post on the subject but thought you’d enjoy the flyer I made for the “Competition”. Great stuff, this.
Live Life, and Make It Great!
Fritz @ TheRetirementManifesto