Conventional retirement planning “experts” claim that a young person must plan to work at least through their fifties before they will have enough wealth built up to retire. Recently, I was dismayed to hear that a national financial guru has come out and said that because of the economy, the new American dream will entail working your butt off until you are seventy.
I hope no one has committed suicide on that statement, because it is a TOTAL AND COMPLETE LIE.
Well, not a total lie. The guru is probably assuming that most people will count on being employed by someone else, and therefore be at high risk for spending part of their working years as unemployed. She is also probably assuming that most people will continue to overspend and accrue debt, forcing themselves into a later retirement age.
Listen, if you want to work for someone else at a job you hate until you are seventy years old, then make sure that is Priority Number One in your retirement planning formula. But don’t push it on the rest of us!
The truth is, if you buckle down and make some sacrifices starting at age twenty-five, there is no reason you cannot be retired by age forty. If you are already past that age, your retirement planning can include a goal to be out of the rat race within fifteen years – ten, if you get creative enough.
How do I know? Personal experience, thank you very much.
What exactly is “retirement”?
I need to get one thing clear before moving on. Retirement means different things to different people. The conventional meaning has come to imply that a person is a senior citizen having worked for forty years or more and is now playing golf every day or otherwise taking it easy – or simply waiting to die.
When I talk about retirement, I’m referring to the time of life when you have saved up a large enough nest egg to be able to live out your days without working another day if you don’t want to.
But I am not pro-laziness. I believe that when you retire, whatever your age you are considering in your retirement planning, you should use your new-found free time to pursue your passions and interests. I believe you should volunteer, travel as much as you want, and become an expert in your favorite hobby.
But “retirement” should not connote a specific age and stereotyped activities.
How can you retire early?
In order to retire early, you can do one of two things:
- Grow your income and invest as much of it into mutual funds as you can.
- Leave the rat race whenever you want and develop a stream of passive income so most of your time can be spent doing what you really want to do.
Retirement planning doesn’t have to mean working until you’re too old to enjoy life. Get creative, and get on with the life you want to live.