What started as a 3-month mini-retirement trial got extended into a 16-month semi-retirement trial. This post will cover what we got up to in our time off along with some interesting realisations.
The time off has given us some insight into what it would be like to retire early. We enjoyed the time so much that we have now structured our investments in a way that we hope will allow us to do this regularly, at least while our son is still small.
While this time off was initially meant for me to focus on my health, there were a lot of other things we got to learn and experience that we wouldn’t have if we were working.
Finances
As this is a financial independence blog, I’ll start with the financial realisations.
Non-employment income
One of the most interesting realisations I had during our extended time off was that while I had focused heavily on where we spent our money, I hadn’t looked at non-employment-related income. When we stopped working, we still had money coming in.
When I looked back at the last almost 4 years, it ended up that we had an average of 7,500€/year of non-employment-related income coming in. 38% came from tax refunds (explained below), 31% of that came from blog-related income, 23% came from the child benefit and 2% from credit card cashback rewards. If I added in after-tax dividend income (before we invested all of our assets), it brought the total to 8,600€/year.
While this income is not fixed, permanent or reliable, it has been consistent over the last 4 years, which is long enough for me to feel comfortable factoring in that I do not need as much as I thought I did to reach financial independence.
Our original FIRE calculations did not take into account any money we may make once we stop traditional employment, nor did it take into account social security or any possible inheritances. All calculations erred on the side of caution and scarcity.
Now that we’ve been off for over a year, my mindset has drastically shifted. It’s given me a new perspective, one of abundance. To use the money we have now to live the best life we can (optimised and within reason of course). I’m even considering gifting money where before, I would have hoarded it. The more positivity and abundance I feel, the more seems to be drawn to me.
Tax refunds
Another realisation, which should be obvious but hadn’t occurred to me, is that working less means much less income tax and results in big refunds from any of the year that you did work. As Mr. MH was also off, we could also claim the Home Carer tax credit against my income, which only gets applied at the end of the year and results in a bigger refund.
From the 2020 tax year, we got a refund of almost 700€, for 2021 we got a refund of 2,700€ and for 2022 we got a refund of 8,200€.
The less I worked, the bigger the refund.
If semi-retirement is something you could be nearing, don’t look at how many months you’d need to work to cover your annual expenses at your current tax rate. Figure out instead how many months you’d need to work at say a 10% net tax rate instead and look at any other regular non-employment income that might be coming in and see what a difference it makes.
Costs to work
Having time on your hands allows you to unintentionally save money.
When both parents are working, you might spend more money on take-away dinners, lunches at work, use more petrol or public transport, have a gym membership to get your recommended level of exercise and travel at peak periods due to school breaks.
Since both of us have been off, we have cooked more, eaten almost all our lunches at home, used far less petrol, gotten exercise from just living our lives and get to travel more cheaply as we travel at off-peak times and can stay for longer which costs less.
On the exercise front, neither of us are very active, however this summer I managed to close the exercise ring on my watch (30 minutes a day) for 21 days in a row without trying. With all the swimming and walking and paddle boarding, I got my recommended daily exercise without effort. If I had been working, I’d have been sitting at a desk and would have had very little energy at the end of the day to fit in any exercise.
Unfortunately, I haven’t kept up that level of effortlessness but did want to highlight that for those thinking retirement would cost more than if you were working because you would not have work subsidies or would have more time and want to travel, that is not necessarily true.
Being off work also allows you to take advantage of getting to do things when they are less busy and less costly. Early bird menu’s, mid-week spa rates, getting a playground or nature walk all to ourselves and so on.
Renting instead of owning
Renting instead of owning a home has been a change that has resulted in less stress and less expense.
Less Stress
No stressing about mortgage rate increases or housing market crashes and no stressing about maintenance when things break.
Fewer Expenses
Less money spent on renovations. Less money spent on home ownership costs (purchase and sale costs, maintenance, property taxes, refuse, insurance etc).
We owned our home in Ireland for 5.5 years. If we average out these costs over the 5.5 years, we spent the following to own it:
- 7,200€/year on renovations, purchase and sale costs
- 3,800€/year on mortgage interest
- 1,200€/year on maintenance
- 1,100€/year on home insurance, property tax, mortgage insurance and refuse
- 13,300€/year total
We sold it for more than we bought it for and estimate it earned us an average of 6.63%/year (tax-free) on the money we had invested into it.
Now I know the argument for home ownership is not purely financial. For us, we bought because we wanted security to not be kicked out, to put our own stamp on things and to control rising rents. We loved our home and it served us well.
That said, we now pay the equivalent of 8,100€/year in rent (2 bedroom 1 bath in a very remote area in Canada) and have our money invested. So far this year our investments have earned us 14.53% (before tax), but since we haven’t worked much this year, we will pay very little if any taxes on any withdrawals.
And before people say that level of rent is impossible in Ireland, looking on Daft today (Dec 2023), there are a number of 2-bedroom properties available around the country for between 850€ and 1,000€/month – if you’re willing to downsize and have the option of working remotely. Not that I recommend isolating yourself, but if any of these are closer to a community you already have and can reconnect to, it could be food for thought if it could allow you to semi-retire much sooner than you’d originally thought.
Travel
During our 16 months off, we travelled to Canada (2.5 months), Portugal (1 week), Canada (Moved), France (3 weeks) and Mr. MH travelled to Birmingham for a Football match. If we’d been working, we would not have been able to travel to half of those places or for half as long.
Most of these trips also included friends and family. Time in Canada was spent catching up with friends and family. Our trip to France was for the Rugby World Cup and we had at least 8 of our closest friends and family stay with us at different points during our stay there. Mr. MH also went to a football match in Birmingham with a childhood friend.
We got to mix in my passion for travel and Mr. MH’s passion for sports AND got to share it with some of our favourite people.
Family time
We also made up for lost time from the pandemic and crammed in so many family catch-ups.
Between christenings, confirmations, communions, birthdays, sporting events and other family gatherings, Mr. MH’s family got together once or twice almost every month. Given how large Mr. MH’s family is, that is no small feat. I think with nieces and nephews included, there are about 25 of us that come from all over the country.
We were to Mayo 4 times, Tipperary at least 3 times, Dublin twice, Galway and Leitrim once each and Mr. MH got to 5 Rugby matches in Cork, Limerick, Galway and Dublin.
Again, something we would not have been able to manage if we’d both been working.
Our calendar looked something like this:
Pink is international travel, Blue is national travel, Green is sporting events and Black are milestones.
| Jun 22 Hosted Home Exchange guest | Jul 22 Canada | Aug 22 Canada |
| Sep 22 W/E in Mayo | Oct 22 | Nov 22 Rugby in Cork (Mr. MH) Rugby in Limerick (Mr. MH) |
| Dec 22 Week in Mayo | Jan 23 W/E in Mayo Rugby in Galway x 2 (Mr. MH) | Feb 23 W/E in Galway Week in Portugal Rugby in Dublin (Mr. MH) |
| Mar 23 W/E in Tipp W/E in Birmingham (Mr. MH) House sold Autism diagnosis Concert in Dublin (Mrs. MH) | Apr 23 W/E in Leitrim W/E in Dublin | May 23 W/E in Tipp |
| Jun 23 W/E in Mayo/Sligo W/E in Dublin/Bray W/E in Tipp Move to Canada | Jul 23 Canada | Aug 23 Moved into rental |
| Sep 23 2 weeks in France W/E in Ireland (Mrs. MH) | Oct 23 1 week in France (Mr. MH) |
Friend time
In addition to the additional time we got with family, we also had more time with friends.
At this time in our lives, our friends are so very busy with work, kids and all the activities that come with juggling the two. As time with friends is a priority for us, and because we had more flexibility, we would arrange to go to our friend’s houses when best suited them. If we’d been working we wouldn’t have seen our friends half as often as our schedules just wouldn’t have lined up. We would even text friends mid-week and see if they wanted to come by for dinner or even bring a slow cooker out to their house for us all to eat together. Using our time to save them time and get some extra time together.
We also had the flexibility to meet up with friends when they were off during the week. We could go meet up for coffee or lunch in town or meet friends who were on maternity leave for walks or playground visits. I got to go to the spa mid-week a few times with friends who were off from work.
During the summer, a friend was on sabbatical and we met up to spend a day on the lake, floating around and laying in the sun. It was the first time in my adulthood that I can remember just laying on the ground and watching the clouds rolling by – queue Otis Redding.
Couple time
When we were still in Ireland, our son was in playschool for 3 hours a day. As we were both off, we would use this time to go on brisk walks together in nature. It was a great way to get exercise, fresh air and quality, child-free time together. Once we were in Canada and our son was in school all day, we used the time to watch movies and play video games together.
Me time
As I’ve been focusing on getting healthy, my sleep routine has shifted in that I go to bed around the same time as our son. If I were working, this would leave very little time to do anything for myself. As I’ve been off, I had time to decompress, listen to podcasts and read books that energise me and do active rest activities that I enjoy like diamond painting and jigsaw puzzles while listening to music. It’s been nice to feel like an individual again and be able to get some time to focus on things uninterrupted.
Mr. MH also followed his interests and did his own thing. He listened to copious amounts of sporting podcasts and recently started a full-time 10-week French course which he’s really enjoying.
Parenting
In terms of parenting, I’ve realised that no matter how much time you have, you still want to just do your own thing. I thought that if I was off work I would have so much more time to spend with my son and I could stop feeling guilty looking at Instagram pages with educational activities parents were setting up for their kids. I had all these ideas of activities we could do together, fun crafts, outdoor activities, cooking and baking together and so on. Once both me and Mr. MH were off, it didn’t really change how much time I did active things with our son. While Mr. MH was good to bring our son to the playground and get him outside, I might sit on the floor to play with him for 5 minutes to get him going on something but then I’d get up and go back to doing housework, laundry, cooking or even something leisurely I was interested in. I say this because I thought it was important to stop feeling so guilty, especially if you are working and have little quality time with your kids. To say that, even if you were off full time, you probably wouldn’t have much more time as it gets filled up with other things.
The other thing I’ve really appreciated is that with both parents being off, we had so much more flexibility and less stress. Having both allowed us to be more present and patient with our son. If play school or school was closed at a moment’s notice, no problem. If our son was sick, we didn’t have to worry about who was going to take work off. If our son was having a tough week, we just kept him home. If we have a family event on a bank holiday weekend, no rush, we can leave whenever suits, or even the day before and make it a longer weekend. If we have travel coming up, packing and organising isn’t stressful as we don’t have to juggle work schedules before we go. Having less stress allows us to create a calm and consistent home environment which is so important for a child.
Time and Boredom
The last thing I’ll comment on is that no matter how much time you have, it will get filled up.
When I first went down to a 4 day work week, I thought I would have so much more time for all of the things I mentioned above, but I didn’t – it helped but wasn’t near enough for what I hoped. When I was planning to take extended time off, I thought it would be easy to find time to exercise. It wasn’t.
If you want to spend time on things that are important to you, you need to make those a priority. You need to safeguard your time as it really is your most precious resource. If you don’t guard it, others will take it up.
In terms of boredom, I can honestly say, it’s only started to creep in recently as I’m alone during the day, with little MH in school and Mr. MH in his full-time French course. You may have noticed an uptick in blog posts – this is how I’ve been filling my time! It wouldn’t take long though for me to get into a new routine and find new things to fill my time. It would just be a period of adjustment.
That said, I am actually looking forward to getting back to work and catching up with my colleagues. The last time I worked, it was for a 6-week contract and it was a trial run for myself to see if I was ready to get back to work. I actually found myself energised by the work, to use a different part of my brain and have problems to solve on a daily basis. To feel like I was contributing to something. I do think that semi-retirement is a happy medium. To dip in and out of work life as wanted/needed. Will keep you posted on how it goes.