When you think about retirement, what do you think? What does your retirement look like? When do you want to retire? All of these questions are going to have different answers, depending on who you ask. To me, that’s one of the beauties of people. We’re all different and there’s no right answer with a lot of things. But today I really want to focus on the third question.
When I did financial planning, the #2 response I got when I would ask prospective clients when they wanted to retire was age 65. The #1 response was “tomorrow”, which they always thought was super clever, as if I had never heard that before. HiLARious, people. Anyway, I wish I would have thought of this back then, but who told you that you had to work until you were 65? Who told you that you had to spend the majority of your life spending time away from the people you care about the most, helping people you don’t like make more money, and needing their permission to spend more time doing the things you love with the people you love. I’ll tell you who. It’s the companies who want to squeeze every ounce of sweat out of your body until you’re no longer of use to them. I’m sure they’d keep you longer, but they probably got tired of people flushing their adult diapers down the toilets at work and clogging the plumbing, so they said to themselves, “okay, it’s time for someone else to take care of grandpa.” They’re the ones who established the idea, and we’ve structured our whole lives around it.
Most of the calculations done for retirement planning are done with that timeframe in mind, too. You can’t pull money out of IRAs until age 59½, unless you want to pay a penalty. You can start taking social security at age 62, but there’s a reduction in your benefits unless you wait until age 67. So people are just stuck in that mind frame that they feel they have make their plans accordingly. Is that how you make your plans? You don’t have to, you know.
How to retire early: some examples
Tim Ferriss. This guy is the rock star of what he likes to call “mini retirements”. He wrote about it a lot in his book, The 4-Hour Workweek. He tried the whole employee thing and it just never really stuck. So he put $5,000 on a credit card to start something he was passionate about: a mind and body supplement targeting student athletes. For a long time, he did everything and it nearly drove him to a mental breakdown. So he set things up so that his employees could run most of the business without him and he went to Europe for a few months. He loved it so much that he’ll now work a few months then take a mini-retirement for a few months. He’s learned different languages, won a kickboxing tournament in China, done ballroom dancing on a world stage, and a lot more.
For Tim, it’s just a matter of learning how to manage your time. The Pareto principle is something he stresses in his book and he favors eliminating all the useless crap out of your life so you can focus on what brings you more value and what allows you to take control of your life rather than letting the things in your life control you. Pretty slick. If you haven’t read his book, I would highly recommend it.
Mr. Money Mustache. This guy is the king of minimalistic living. He retired from the workforce at age 30 and spends most of his time doing what he loves: blogging about the minimalist life. Some of the cool things he does are spending his summers in Canada, paying for the trip by renting out his house in the states; riding his bike everywhere; sporting a $10/mo. iPhone contract; and helping others to realize just how ridiculously simple it is to retire early. It’s kind of nice to read his articles and realize just how stupid it is that we put so much value on things that drain our resources and keep us doing the things we don’t want to. It’s made me recognize those ridiculous things I hold onto that are really just luxuries and are unnecessary. I wrote another post inspired by MMM here.
With all this being said, there are people who love doing what they do and they’re fine doing it until the day they die. If you’re in that position, we’re all jealous of you. But who knows what you’re going to want 10 or 15 years from now. For me, the whole idea behind the early retirement concept is to give myself options; to allow myself to make the decision to do my own thing in case I get burnt out, or my passion changes, or my expectations change, which judging by how many changes I’ve made in just the last few years on what I want out of life, it’s definitely going to happen. And who knows what political changes are going to affect our ability to save in the future?
Really what I want to do is inspire you to think a little bit more about how you’re planning your retirement. It doesn’t have to wait until you’re old and feeble. Saving 10-15% toward retirement may get you there by that time, but why not save more? Obviously, not everyone can at this particular point in their life, but what do you need to do to get there? It’s time to take charge of your life and decide to live it according to your own rules, not the ones society has set for you. Everyone has skills that can help them get there; you just need to have the goals in the first place. Then you need to align your behaviors with those goals.
It’s possible, peeps. You just need to expand your horizons a bit to see it. Learn how to retire early and you’ll open up new possibilities you had never imagined.