The Maintenance Phase

The financial independence community does not speak with a single voice. It is a varied population with many nuances involved when it comes to such concepts as enough and early retirement. This is important. Discourse requires that at least two distinct opinions exist. For instance, there are those who believe the safe withdrawal rate of 4% is iron clad and once it is reached, retirement is a sure thing. There are others who are much more conservative, and would never settle till their number was somewhere closer to 2%. The vast majority of us, likely, fall somewhere in-between. Thus, instead of arguing the finer points, I have decided to take a middle ground. The maintenance phase.

We understand and are very comfortable with the accumulation phase. This is the journey to reach enough. And the deaccumulation phase or withdrawal strategy is also the topic of many a blog post.

But at 45 years old I realize that retirement could be as long as fifty years. That’s a lot of time in which almost anything can happen. I prefer to hedge my bets. I prefer to hang out in the maintenance phase.

Half Retirement

It is no secret that I didn’t fully retire. By scaling back my medical practice to an administrative role as a hospice medical director, I was able to continue to find meaning and purpose in my work life while letting go of undue stress. This has solved a number of potential problems.

Working a few days a week provides structure, social interaction, and a sense of social mission. This is of utmost importance when you are looking at potentially decades of leisure. Habit and structure are major components to mental health.

Furthermore, those irritating conversations about what you do for a living are almost completely absent. I’m a hospice doctor! Simple enough.

But most importantly, I have entered the maintenance phase of my career. I am no longer actively building new businesses or revenue streams. No longer searching for new patients to build a practice. Yet I am far from out of the game. This allows maximal enjoyment of my daily work activities with much less of the fear.

Money Anxiety

Most of us have lived with money anxiety for the majority of our careers. To believe that suddenly a certain number in the bank account will make those go away is quite optimistic.

Sometimes we are irrational. No matter how strong our financial plan is, there is always some white or black swan event that makes us worry.

I say, stop worrying. This is one of the best reasons to stave off the deaccumulation phase and remain in the maintenance phase instead. Cut down on work to a half retirement sort of situation which provides enough revenue to pay the monthly bills, but enough freedom to let go of the traditional stresses of the W2 job.

Happy Medium

I think you can really have it all. You can have the safety of financial security with the freedom of financial independence. You can stop worrying about that pesky safe withdrawal rate and stare down sequence of returns risk with unblinking determination.

Stay in the maintenance phase for awhile. This is the best version of risk mitigation. It is yet another form of asset diversification. You are holding on to the W2 asset class. Maybe you have diminished your holdings a little. But you haven’t abandoned it completely.

Final Thoughts

I am a big proponent of the maintenance phase. If compounding does its job, you will not only stop from withdrawing funds, but your wealth will even accumulate more. In the meantime you will mitigate against the biggest post retirement fears.

You also will provide much needed structure for the decades to come, and maintain social connections.

What could be better?