Pretirement: The Perfect Compromise?


I play with electronics all day long, but I don’t believe in binary numbers. Nor black and white, for that matter. Rather, I believe the real-world is much more complex than that and filled with a million shades of gray.

Financial Independence vs. Retirement

The purpose of this blog has always been to track one’s journey to early financial independence. By intention, I’ve always made sure to refer to the final destination as financial independence and NOT retirement!

There is a big difference between the two… Retirement implies never working again (either in a particular field/career, or just PERIOD); financial independence, in contrast, just means never having to work again.

And all along my journey has been about meeting a very elementary criteria:

Passive Income > Living Expenses

Quite simply, by fulfilling that requirement, I would be financially independent.


So, you could argue that I’m already financially independent today. Even on a bad month, with a vacancy and repair items, my cash flow exceeds my monthly living expenses (less than $2,000).

Even though I’m still employed and working the 9-5, I get to bank my entire paycheck (net income) each and every month. But of course real-life is much more convoluted than the above equation… Otherwise, I would have already checked out of the office and hopped aboard a plane with a one-way ticket to a tropical island somewhere in SE Asia…

What it comes down to is risk management… In theory (and definition), if you earn $30,000/year in passive income and spend $29,999.99/year on living expenses, you are financially independent! But just as it is in my own case, I’m sure you wouldn’t feel very secure with that type of situation. And thus, you would feel the need to keep playing in the sandbox, for slightly longer, to try and lower your risks by accumulating more capital.

Which brings me to an interesting term that’s been floating around on the internet as of late… the concept of pretirement.


I didn’t coin the term, but from my understanding, pretirement is sort of a hybrid approach of both financial independence and retirement. As an example, you reach a stage in life where you aren’t yet ready to quit working completely, but you also have a sufficiently strong base of assets where you shouldn’t have to put in the full 40+ hours/week that a wage slave has to.

Pretirement is a way to compromise and bridge that gap to full financial independence. Sort of like tapering… It let’s you enjoy more free time today (and less stress), but you still put in some degree of work (e.g. part-time job) to generate income.

Logically, the whole concept of pretirement makes perfect sense to me! In my own situation, when I talk about pulling the plug on my own corporate career for good, sometime in 2015 or 2016, skeptics will point out as to why my plan won’t work and why I will be doomed to fail. In their minds, by calling it quits prematurely, I would be skating on thin ice and taking on too much risk. The advice given, then, is for me to keep grinding away at my not so pleasurable job for several more years, until a sufficient buffer is built…

And when I hear that, it’s like hearing fingernails raking across a chalkboard. Very dissonant and altogether too binary a way of thinking. It’s the all or nothing approach… which is not the way things ought to be.

The Compromise

Pretirement provides the perfect compromise. I was very hard-working and dutiful during my 20’s, which helped me amass a decent-sized nest egg today. As the assets compound and grow, my net worth/cash flow will only increase over time. In other words, the trees have already been planted… now I just need to wait patiently for the fruit to fully emerge.

But, if all the labor and hard-work was already put in… why should I have to subject myself to the same degree of torture as when I owned an empty plot of land? Why keep toiling away in the hot sun, working myself to the ground each and every day, when more trees are no longer necessary?

At this point, I just need routine maintenance. It makes more sense, then, to go with a tapering plan to wind down the work… Yes, some work is still necessary, but definitely not to the same extent as before!

And as we all know, real wealth is measured by a person’s abundance of time, not by the size of their bank account!

Yes, we all have our fears and doubts… As adults, probably even more so than necessary (but I’ll save that topic for another post). But like most things in life, there’s usually a happy medium somewhere in-between…

Let’s see… I can work 3 more years as a corporate drone, putting in 40+ hours each and every week…


I can work 1 more year as a corporate drone, and then attempt freelance writing (as an example) part-time for 10+ years as I wait for the fruit to become overwhelmingly abundant to feed my needs.

Life is all about balance! And at some point, I think we will all agree that:

Time >>>> Money


Let’s not also forget:

Health >>>>>>>>>>> Money


Money is becoming exceedingly less and less important to me with each passing day…


What do you think? What are your thoughts on pretirement?

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Income Surfer
5 years ago

I’m just a couple years behind you Fighter. I took a year off, last year infact, before our first kiddo was born. Believe me when I say…’ll love it…..and you’ll be shocked how little money you end up spending. Additionally, you mentioned freelance writing. Talk to Jason, because he certainly did better than I……but I was making $500 per month right out of the gate. Couple that with some nice passive income and you’re all set.


Frugal Buckeye
5 years ago

I think you’re spot on with this line of reasoning. Most of the people out therethat have successfully reached financial independence and are blogging about it seem to end up in a situation where they are continuing to earn money doing things they really enjoy after achieving FI.

I’ve still got a ways to go yet but I’m thinking of the days where I can work a part time job on the ski slopes to make a little money to add to my nest egg, and get free skiing.

5 years ago

Fi Fighter, Thank you for this post and vis a vis the clarification for the readers of this site. Your logic is only as sound as the assumptions you make to support it (both good and bad). I would like to challenge and expound on some of them in healthy discourse: The idea that people can exit and enter the work force on whims. Again, my logic maybe faulty because I do not know your professional background and perhaps you are so highly degreed that you can walk into any office and command a job in which case you are… Read more »

Rat Race Quitter
5 years ago
Reply to  FI Fighter

Not to be “that guy”, but be careful of any one who expresses a romantic interest in you AND is a reader of this blog. She might just be looking for a free ride for a few weeks.

Or I could be totally wrong. Just sayin, you never know.

5 years ago

“real wealth is measured by a person’s abundance of time, not by the size of their bank account!” Man so true…so true! I feel very time poor right now and hoping to follow your journey. It is a little tougher with a little one but Income Surfer says he’s only a few years away. It’s also tougher being in a high cost area but that’s my choice. Just read one of your older articles about out-of-state investing and that the returns aren’t really there anymore. Darn it…just when I was really looking into it. We’ll see…

5 years ago

Your right FI fighter. I may have to accept that for you $3,000/month is plenty to get by on. For me I know I need a little more meat on the bone. You started your journey after the ’08 crisis and got in close to the bottom (perhaps by accident) and have enjoyed the ride up. I think this type of fast rise to the top has led you to feel invincible. You haven’t had assets lost during the down turn (stocks,real estate, tenants get laid off unable to pay rent). What ever you decide just make sure you have… Read more »

Mrs. Bug
5 years ago

I absolutely love this post. Pretirement sounds like a happy balance. Mr. Bug and I have planned something similar in a few years. Our goal is to leave traditional work and move to contract work about 6 months out of each year. You are much further ahead than us, we are just starting our journey. I can’t wait to hear about your journey into financial independence and pretirement!

5 years ago

I really love the pretirement strategy you’ve outlined, moving into a different (and more enjoyable) role while still earning income. I’ll probably roll with this strategy to jump into a field I’d enjoy more but doesn’t pay as well.

Of course, my ultimate choice would be to perpetually learn at university, but I don’t see that happening.

No Nonsense Landlord
5 years ago

Being FI is the name of the game. And being able to chose your destiny is part of FI. While $2K might be enough to live on, it leaves you few choices. When you think about it, no one in the USA has to work, ever. Everyone is FI at age 18, there are plenty of social programs that you can take advantage of and never work a day in your life. The problem is, it is hard to exchange your Section 8 voucher to a month long vacation in Japan. Or hard to use your EBT card to buy… Read more »


[…] have also linked to a post by FI Fighter, who introduces the concept of “pretirement”, where you reduce your working hours but […]

Dividend Mantra
5 years ago

FI Fighter, ” Otherwise, I would have already checked out of the office and hopped aboard a plane with a one-way ticket to a tropical island somewhere in SE Asia…” It seems to me that you can already easily do that, if you really want to. But maybe you just don’t want to. And that’s okay. I think you’re letting the math get away from you, or take control of you. There are a ton of people, from what I can see, living a fantastic quality of life in SE Asia on much less income than you make passively RIGHT… Read more »

5 years ago

Hi fifighter
I was wondering if you own your own home or rent a place?
Thanks for the awesome post.

5 years ago

Your posts are allways very nice to read.
I believe you are now wondering if you have enough passive income, but maybe you should invets in DG stocks to balance your months in which the vacancies and maintenance occour.

Anyway, it seems you have a good salary so you have plenty of choices right now.

Just keep writing, I love to read your website.

A Frugal Family's Journey

Great article FI Fighter…pre-retirement seems like a great compromise to me. In fact, although I am at least 7 years behind you, I’ve already begun toying with the idea of pre-retirement as a compromise. Right now, the plan is to retire in 13 years but if I went the pre-retirement route, I may be about to retire in say 8-9 years and work part-time for the remain 4-5 years. At that point, my pension will kick in and its off to some tropical island for me (hopefully my wife wants to come along). 🙂

5 years ago

I think this is a great post. I am a long way from pretirement because I have to finish paying off this mortgage first and then move forward. I am not sure about your educational background but a great way to make some extra income is teaching. In most places if you have a bachelor’s degree you can become a substitute teacher. You can make upwards of $100 a day for that stuff and you don’t need the teaching degree. If you have a master’s degree you could look into possibly adjuncting at your local college or university. I know… Read more »

Rat Race Quitter
5 years ago

This was a good article. Health and time are infinitely more valuable than seeing those zeroes in my checking account.

My brother owns rental real estate which he manages directly. To which I’d say “no thank you”! I’d so much rather pay a management company and shave off 10% of my rent and keep 100% of my time!

5 years ago

[…] Ultimately, early FI is about more than just wealth, or passive income. Without good health, there won’t be anything worthwhile to look forward to. If my decisions this year delay completion of the journey for another year, or two, or three… so be it. Worst case, I enter pretirement. […]