Updated on 02.19.09

Review: Work Less, Live More – The Way to Semi-Retirement

Trent Hamm

Every other Sunday, The Simple Dollar reviews a personal finance book.

work less, live moreEven before I began my financial turnaround, I dreamed of being able to settle into some form of “semi-retirement” around age fifty or so (when the children are out on their own). I dreamed of spending mornings working on my writing, spending my afternoons volunteering, and spending a lot of long, wonderful days with my wife as we grow into our golden years together, chasing grandchildren and enjoying each other.

Obviously, before I began my turnaround, this really was a pipe dream. If I had continued down my road of rampant spending, I would have been working until I fell over. Now, with a few years of good financial management under my belt, the dream is starting to become a little more realistic – but I know I’ve still got a lot of years of work ahead of me to make it happen.

Work Less, Live More by Bob Clyatt is basically a “how-to” guide for building such a state of semi-retirement later in life. I tend to think that this book speaks to a lot of people. I think many people dream of an active retirement of some sort where their time is filled with regular activity, and for many, that will include a part time career of some sort.

But how do you get from here to there? That’s what Work Less, Live More is all about. Let’s dig in.

Figure Out Why You Want To Do This
Clyatt opens the book by arguing that there needs to actually be a compelling reason to choose a path to retirement or semi-retirement. If you’re actually content with your job, why quit? It fills your time with something that fulfills you and earns you money, after all. If you’re going to consider a path to semi-retirement, it should be pushed not only by a discontent with where you’re at right now, but also a desire to accomplish something different with your time. Clyatt offers a lot of exercises here to help you walk through this, because in truth, there’s a lot of introspection and self-discovery here.

Live Below Your Means
Once you’ve figured out what you want, the first big step on the journey is to, well, spend less than you earn. That means both striving to earn more as well as focusing on frugality in your life, with the goal of maximizing the difference between your income and your spending. Clyatt focuses mostly on the “spend less” part of the equation, discussing things like creating a spending plan and seeking out chunks of regular spending that you can cut out.

Put Your Investing on Autopilot
Most people put far too much stress into investing. Clyatt proposes that it’s actually quite easy for most people if you just follow a few basic principles: invest in a lot of different things, avoid fees, and don’t micromanage it. His suggestion is to stick with index funds in your retirement accounts, either by using a “target retirement” fund or by buying small amounts of a very diverse selection of index funds. Then, once you’ve set up this investing plan, just let it sit and don’t worry about it – it’ll go mostly up and sometimes down no matter how much you stress or don’t stress about it.

Take 4% Forever
How much do you need to save for retirement? Clyatt says that you need to have enough so that you can just withdraw 4% of the starting balance each year and be just fine. So, let’s say you’ve decided you need $40,000 a year from your account – you’ll need one million dollars to be ready. Obviously, you should only withdraw as much as you need – the 4% is just a maximum. If you’re calculating into the future, you should keep inflation in mind – you might be able to get by on $40,000 a year now, but $40,000 today will be worth quite a bit more than $40,000 will be in ten years.

Stop Worrying About Taxes
Many people who move into semi-retirement situations often get very worried about the tax bill at the end of the year. Clyatt’s solution? Don’t worry about it – just save plenty and you’ll be fine. He offers a few basic tips for minimizing your tax impact in semi-retirement. For instance, if you’re strongly thinking about semi-retirement, you should definitely be utilizing a Roth IRA for at least some of your retirement savings so that you’re not required to pay taxes on that money in your later years, when you’ll still be earning some income.

Do Anything You Want, But Do Something
Many people, once they’ve ushered their children out into adulthood and find their careers winding down, discover that suddenly they have many more hours than they know what to do with. Clyatt argues that the key to a successful semi-retirement is to fill those hours with some sort of activity to keep your mind and body engaged. Retirement does not mean idleness.

Don’t Blow It
Guilt. Boredom. Panic. Financial worries. Bruised ego. These are all psychological traps that people can fall into upon retiring – and they’re all real and worth consideration. Clyatt offers great, specific advice for these concerns and many others, but most of them revolve around the fact that you’ve worked your entire life to earn the freedom to choose what you want to do, so get out there and do whatever it is you want to do.

Make Your Life Matter
Keep a healthy body and a healthy mind. Build healthy relationships. Be involved in activities that are meaningful to you. Don’t worry about the past – instead, look forward to the things that are happening now and will be happening soon. In other words, you have all the time in the world to build the best quality life you can, so take advantage of it.

Is Work Less, Live More Worth Reading?
In many ways, I expected Work Less, Live More to be a book heavy on the personal finance specifics, dealing with questions about how to invest for semi-retirement, how to transition to a part time career, how exactly to manage your money during those years, and so on.

While that material is covered, Work Less, Live More takes a much broader view of what it would mean to be semi-retired – and Clyatt actually seems to focus on other issues, such as thinking ahead about what you want out of your life, maintaining psychological health during the transition, and living a full life in retirement.

For some, this won’t be the book they need. It’s not going to provide the tools you need to exactly calculate the optimal financial plan for moving into a state of semi-retirement. Instead, Work Less, Live More does a fantastic job at something else: getting your mind in the right place to create a great, successful semi-retirement. From where I stand, Work Less, Live More can be incredibly helpful for people who are thinking about the possibilities and challenges of being semi-retired in the future, but if you need strong help with the exact financial planning, you may want to seek additional help beyond this book. Nevertheless, I found it an excellent and thought-provoking read.

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  1. Retiring early is one of my main financial goals but I don’t think I’ll have a traditional retirement. The semi-retirement concept sounds interesting. The mini-retirements concept from “The 4-Hour Work Week” is more likely what I will do.

  2. Andy @ Retire at 40 says:

    Wow, sounds exactly like the kind of book I need. I too have already realised that retirement or semi-retirement is as much about life and living as it is about finances. It’s about getting what you want out of life.

  3. J.D. says:

    Work Less, Live More is one of my favorite personal finance books. It’s like the bible of early retirement. To me, it ranks right up there with Your Money or Your Life and The Millionaire Next Door as one of the essential books about money. I’ve read WLLM several times over the past year, and am in the middle of it again. (I intend to review it at GRS soon.)

    Just want to add a strong “buy” from my corner of the web. (I usually recommend that people borrow books from the library. Not this one. This one is worth owning.)

  4. Curt says:

    Interesting book. I think most Americans will never be able to completely retire, because we will not be able to afford too.

    The new goal will be to reach semi-retirement and this book is a step in that direction.

  5. Joey says:

    I’ve come to the conclusion that, up to a certain point, time >> money. I try to remember this whenever I’m tempted to look for another part-time job.

  6. MeekWoman says:

    Based on the book review, it sounds like the author is stressing that saving for retirement is more of a means to an end. I think this is an important point to make because many people view retirement as an the end-all to life, and they will find themselves disappointed, bored, and unfulfilled.

  7. Neal Frankle says:

    I agree that American’s will redefine retirement to include some work.

    I am a big fan of not waiting too long to enjoy life. The way I figure it, when my kids are gone, I’ll have more time to make money. Right now, I want to enjoy them as much as possible.

  8. CPA Kevin says:

    I’ve been meaning to read this book ever since seeing it on Early Retirement Extreme. Now that two other respected PF bloggers have chimed in on how good it is, I’ll push it to the top of my to-read list.

  9. I’ll be reading this one. Thanks for the review.

  10. tinybit says:

    I’ve read both WLLM and Your Money or Your Life. I think they are great companions and cover different areas of the time/money balance. I highly recommend both books to friends. Most of us will continue to do some work after we ‘retire’ just to stay active. Sitting in my kitchen all day like my parents do would drive me insane in under 2 years. I plan to do some work, even if it’s volunteering, after I retire.

  11. Nancy says:

    I checked this book out at the library and was disappointed. It seemed to give examples of people retiring early who were making close to 6 figure salaries, or folks who have a pension (neither of which pertain to me), and I have to admit thinking, “If I made a six-figure salary or had a pension, I wouldn’t need a book to tell me how to retire early.”

  12. @Nancy (#11) – You don’t need to make close to 6 figures to make it into early retirement. Especially not early semi-retirement. I think it speaks more to the fact that semi-retiring or early-retiring people are driven and know what they want in life. This is correlated with making large sums of money or being successful on other levels, but the money is not the main cause.

    Also, if I may make a plug for my site for anyone who is not interested in spending many years working for their freedom. Early retirement for the most part simply requires people to drop some key assumptions about their life. Investment planning, etc. is very similar to work-all-your-life planning. Only the ratios change. This is why early retirement books tend to be so heavy on the psychological stuff. There are simply a great many barriers to be overcome. The idea of having to work for a living probably being the greatest one. Most consumers can not imagine not having to do so.

  13. Another great book is “How to survive without a salary” by Charles Long, which advocates working in short bursts to fund longer periods of leisure time. I also recommend Living Cheaply With Style by Ernest Callenbach or the original, Living Poor With Style, which is not toned down for the 21st century.

  14. Sherry says:

    This looks like a very interesting book and I will definitely buy it.
    Even though I am currently semi-retired, I yearn for the days when I can be truly retired, to fill my days in ways I want to fill them. My delimma is paying the outrageous monthly amount of $564 for my health insurance. I’m 61, so I would have these ever-increasing insurance premiums until I’m 65, and then no telling how much my supplemental insurance will be. And it’s actually not about having the money to pay the premiums; it’s justifying paying that large sum when I would love to have the freedom of retirement, versus working three days and having the benefits through work.
    How do others deal with this situation? Some feedback would be greatly appreciated.

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