How to Survive Your First Year of Early Retirement

We love our life in retirement. We gave up our corporate jobs in 2019 and haven’t looked back. We don’t go to work, we don’t have a boss. Our time is our own and we get to spend it however we want. 

You’d think that a life of doing whatever you want would be pretty easy. But it turns out that a lot can go wrong during that first year of early retirement. Of course, it wasn’t all mistakes. We actually got quite a few things right. We ultimately ended our first year with some amazing, once-in-a-lifetime travel experiences and an even higher net worth. But let’s start with our missteps…

No decompression time

We took absolutely no time whatsoever between finishing our jobs and starting our adventure. Ideally we would have taken some time to tie up loose ends, say our goodbyes and mentally prepare for our new life. Instead we worked until the day that we started traveling full time. So here’s what our last day of work looked like…

We started the day by shooting our very first Youtube video. Then Gillian headed off to the office to complete a full day of work. Meanwhile I was trying to work on packing but could only get so far. We still hadn’t agreed on which items were actually going to come with us in our two backpacks and two suitcases. 

Then Gillian finally finished up work for the day and we spent the entire evening packing and repacking and trying to get our suitcases closed. There might have been a few tears. Then we headed off to the airport for our late night flight from our home in Singapore to Poland. It was our first flight with our dogs, it was 12 hours long and obviously no one slept. We took a two hour train to Krakow, finally reached our Airbnb and basically slept for two weeks because we were so exhausted. 

We’ve never had a crazier day in our lives. After that our first couple months of early retirement were a total blur. We were still in shock from leaving the office. When it comes time for your retirement, maybe give yourself a break between quitting work and starting a brand new adventure.

Overplanning

The next thing we got wrong was overplanning. When we first started thinking about our early retirement, we thought we knew everything we wanted. So we started  planning all the details and we mean every single detail. Our first year was all about slow travel in Europe. We had a Google map with our entire route plotted out including trains, ferries, you name it. We even went as far as booking the first six months of Airbnbs. 

After we retired, we found that our ideas and interests evolved as we went along. We realized we wanted some different kinds of experiences than what we had planned. And it took a lot of work to adjust those six months of bookings. 

The lesson here is to leave more room for flexibility in your first year of early retirement. Don’t lock yourself into a huge elaborate plan that can’t be changed. For example, maybe don’t plan to uproot your entire life and move to Spain if you’ve never even been there before. Maybe start with a trip first.

Emergency fund 

Our next mistake in that first year was really underbudgeting our emergency fund. Despite all the planning we did, we never took the time to think through what an emergency might look like in our new lives. We just earmarked a small token amount and left it at that. 

Of course we never could have predicted all the emergencies that came up in 2020. Some of them were personal emergencies and some of them were huge global emergencies. Regardless, we were totally unprepared for all the extra spending that was required. Here’s a quick list of just some of the emergencies that completely depleted our fund and then some…

First, I took a last minute flight from Turkey to Canada provide support to a family member. A few months later, we had to fly out of Europe altogether due to the first wave of COVID. Then we ended up paying sky-high Airbnb rates for the four months that we stayed in Toronto.

We were able to cover the difference by using our personal allowances. But this meant that we had to give up spending on other things, like clothes or technology.

Community 

Our final big mistake in that first year was kicking off our new life without any community. Of course we had our friends and family in Canada and Singapore. But we were starting a new life. We had retired early. We were nomads. We didn’t know anyone else who shared the same lifestyle and interests.

It took many, many months in our first year to finally build a network of like-minded people. So the first stretch of early retirement was pretty quiet. If you are retiring early, don’t be like us and wait until after you’ve retired to make new friends. You might want to get started ahead of time.

Living below our means

Fortunately, there’s a lot we got right in that year. First up, we made the decision to live more frugally than what we could afford. We were leaving our great jobs and our great salaries behind and heading off into the unknown. We wanted to be really, really sure our financial plan would work. Not just for the first year, but for all the years ahead of us.

A lot of people planning for early retirement choose to live on 4% of their net worth each year. We decided to live on less than 3% so that we could feel really confident our money would last. And despite all the emergencies that we talked about earlier, we finished that first year right on budget. 

Early retirement isn’t just about money. It’s also about how you spend your time. And in our first year, another thing we got right was having a big creative project to work on. 

Creative project

Of course, a lot of our time was taken up being travelers. But you can’t really be a tourist every day of the week. We needed something more to occupy our minds and challenge us. And that’s where our YouTube channel and blog come in. These are great projects that helped us make the transition from full-time work to full-time retirement. They provide a creative challenge and force us to always be learning something new. 

And to be honest, there were many rainy afternoons when we were in Istanbul or Dubrovnik or Florence when we were very happy to have a project to work on. Now we’re certainly not saying that everyone who retires early needs to have a blog or a Youtube channel. But it is important to have a hobby or project or a plan for how you spend your time in that first year. 

Speaking of having a plan for your time, another thing we got right was having some structure and routine to our lives.

Routine

We actually didn’t start our early retirement on the same page on this one. I wanted to get each day started early, just like i had been doing for the past 20 years of work. Meanwhile Gillian wanted a more relaxed schedule. In fact she kept trying to institute a “no alarm clock” policy for the mornings. 

Of course, it’s fair to take time to just totally relax and unwind for as long as you want, whether it’s a few weeks or a few months. When you start to feel like you’re getting lazy, that’s when you’ll be ready to bring some structure back in your life. We were eventually ready for more routine so we came up with a weekly plan where we would have a couple days each week to be tourists and a few days to work on our projects. And a couple days for chores and me-time as well. 

Having a routine means that we don’t let all the hours of the day just slip by. Instead we’re making the most of the freedom that we worked so hard to create. 

Gratitude

And our number one tip for surviving that first year of early retirement: gratitude. Of course for the first few months we were just happy to be retired and not have to work anymore. But as time went by, freedom became the new normal. It was easy to forget just how fortunate we were. 

We eventually decided to take time every single day to be grateful. We found this to be especially helpful after facing down everything that happened in 2020. If we’d taken a negative mindset, it would have felt like our whole first year of early retirement was totally derailed by COVID. But in fact we felt so grateful to still be living our dream of travel in spite of all the obstacles.