Why You Should Consider a Leap Frog Retirement Strategy

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by Ryan

Your standard personal finance equation goes something like this. Work for 30-40 years, of your income through 401k’s, IRA’s and even a little extra by paying down your house through a mortgage. This means you’ll be part of the working world the majority of your life.

The is the life of a financial tortoise, and there’s nothing wrong with with being a tortoise, but I think frogs might just be a bit more creative with their retirement strategies.

Frog Stylin

Frogs leap from one spot to another and change direction often. They’re movers and shakers and aren’t afraid to shift themselves. What if we took the style of a frog and coupled it with your retirement strategy?

Leap Frog Retirement Strategy

What if your strategy looked like 5 year on 5 years off, 5 years on, 5 years off. This would allow you to tackle new projects with zest and determination, while knowing that their is an end in sight. If you’re not aware, people generally finish projects in the time that they give the project. Think about this:

If you time scale for your career or your retirement savings plan is 30 years, it’ll take you that long to get there.

Don’t believe me? Think about when you were in high school or college and the teacher assigned you a project. If you’re like 99% of the class you probably waited until the last week to finish it. People play life a lot like they play their project. They do what they have to, but don’t get ahead on the project. They know the due date (think average death age for this example), yet they still don’t plan for it.

How to Leap Like a Frog

If you tackle 5 years with determination to allow for 5 years of freedom you’ll probably accomplish a lot more than your counterparts slowly trudging along in the 40 year path. You’ll also have a lot more zest and ambition for your career as you’re constantly giving yourself new challenges.

This Probably Won’t Work For Everyone

If you are close to retirement age and still lack proper savings, you’re probably not going to be able to attempt this strategy. It’s best for younger people considering that they’re moving around a lot anyways.

For young professionals, it’s not uncommon to change jobs six or seven times before their early thirties.

The strategy of bouncing around, or leaping, is becoming more prevalent with the US being knowledge and service based. Freelancing, e-careers, and mobile jobs are not all that uncommon anymore and give you flexibility to change direction often. As long as you have your mental health, you can leap frog.

So next time you think of retirement, don’t think of it as something that comes after 40 years. Rather think that mini retirements and gaps of employment can be something that recharge your motivation, allow you to see the world when you’re still in your prime, and make you work even harder when you re-enter the workforce.

Frogs might be cute, but they’re also pretty darn productive and interesting.

What do you think? Should you play leap frog with your retirement, or is it best to simply work 40 years then retire in full?

Image from briangratwicke

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{ 10 comments… read them below or add one }

Financial Samurai November 28, 2010 at 7:39 am

Ryan, share with us how this leap frog strategy of retirement is working for you please.

“allow you to see the world when you’re still in your prime, and make you work even harder when you re-enter the workforce. ”

It will be great to see you re-enter the workforce and work harder after your time in Hawaii seeing the world. Your new employer will be proud.

I have a feeling for the Yakezie Scholarship that a wave of applicants will happen on Mon, Dec 6th like you say.

Please respond Ryan, as I don’t think you’ve responded to any of my comments or e-mails recently and that’s bumming me out.

Thx
.-= Financial Samurai´s last blog ..Finish The Year Strong =-.

Get Happy Life November 28, 2010 at 9:29 am

Sam has a point, Ryan. I was to ask you the same question.

Anyways, I agree with you that we should all project our retirement earlier than 30 years and chances are that it will happen sooner.

It also happened to me that I was waiting for the last week to finish the project, but I am not sure if that can be a complete analogy for retirement.
.-= Get Happy Life´s last blog ..Get Happy by Helping- Unemployed relatives =-.

Ryan November 28, 2010 at 9:51 am

Hey Sam,

Basically I’m planning goals based on 5 year chunks in terms of professional and finance. Whether or not I decide to take off 5 years after a 5 year chunk is something I haven’t decided… I suppose I could if I was like Jacob at ERE . It’s essentially the same concept of your money or your life, but taking the freedom to jump between careers to gain new experiences.

I see this happen a lot with acquaintances in that they don’t have set goals so they don’t start saving for retirement, they don’t save much to allow for financial independence, and they don’t have set career goals so they take whatever job they get. Being a “frog” if you will requires you to focus on the current goal and achieve it in a relatively short period of time. Do you not like the strategy?

In regards to the Yakezie scholarship, have you had many applicants thus far?

I actually responded to your comments (which you can now see under your previous comments), but since I updated the wordpress thesis theme recently, I had to reactivate an ajax plugin so they weren’t showing up. sorry bout that.
.-= Ryan´s last blog ..Why You Should Consider a Leap Frog Retirement Strategy =-.

Get Happy Life November 28, 2010 at 1:08 pm

Seems nice but this sentence really confuses to me: “What if your strategy looked like 5 year on 5 years off, 5 years on, 5 years off.”

Having goal-chunks is a good idea, but getting out of the career path you might find it difficult to get back on track where you were, compared to someone who did not take X years off.
.-= Get Happy Life´s last blog ..Saving Young or Travelling the World =-.

Little House November 28, 2010 at 1:12 pm

It’s great that you’re back! (I’m out of the loop, obviously 😉 ).

I like the the leap frog idea, however what happens if you loose your momentum during the 5 years you’re off? And how old is too old to begin this kind of leap frogging?
.-= Little House´s last blog ..Yakezie Carnival Round-Up =-.

Financial Samurai November 28, 2010 at 7:04 pm

Hi Ryan,

Thanks for responding! We’ve got too applicants so far, and I expect hopefully around 10 total by December 6th midnight as they edit and make sure they deliver the best essay possible. But, perhaps we’ll have less. Either way, I’m fine with it, because we can only provide a main scholarship to one or two, and we want to reward the ones who want it the most.

I’m not sure about the frog strategy b/c I’m one who has worked for 12 consecutive years in the same industry, and 10 consecutive years at the same firm. I could have leaped around to a couple other firms int he past 10 years, but decided not to in the end. Perhaps I’m lucky I’ve found what I like to do early and am not bored yet.

I would definitely jump around in your 20s if you haven’t found something you liked at least 70% of the time!
.-= Financial Samurai´s last blog ..Finish The Year Strong =-.

Financial Samurai November 28, 2010 at 7:05 pm

Confuses me too, and unrealistic. Short circuiting a career you like isn’t a good strategy.
.-= Financial Samurai´s last blog ..Finish The Year Strong =-.

Rael November 29, 2010 at 4:10 pm

Very interesting article Ryan. I have thought about the same thing you are talking about here. We can do anything we set our mind to. It’s amazing how teachers and professors give us 2 weeks for a project (and sometimes it should take that long) however, we can finish it in a couple of days. Sometimes the night before. Anyways, I think you have given determination to complete my goals and work hard. I’m not exactly sure that a 5 years on and 5 years off strategy would work too well for a carrer. Anyways, great article thanks for sharing. :)
.-= Rael´s last blog ..Do Whales have a Self-Destruct Mechanism =-.

Steve December 8, 2010 at 7:42 pm

I have worked in various parts in the country for various employers and it was very exciting. I have worked in accounting as a financial analyst and materials management. I have lived in areas like Mobile, AL , St. Louis, Kansas City and now in Florida. Each area was very cool and my kids complained some when we first were moving around every 5 years but I kept getting promoted by moving and got to learn different jobs and industries. Now I don’t know about the taking off for a few years, I have thought about it but have always liked being busy in and outside of work. My goal is to retire at 55. Thanks for the article and glad to see you back on the blog.

thriftygal December 9, 2010 at 4:59 am

I dunno Ryan, i think a 5 years on, 5 years off retirement stratergy would give me ulcers. However, I can totally see a 5 years on, 1 year off,… or 3 years on, 6 months off stratergy for me personally. I guess it ultimately depends on how old you are and how much of a risk taker you are. But you’re right, it totally makes sense to enjoy your life while you’re still young, instead of waiting until retirement to do meaningful things, like travelling the world.

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