As someone who has been relying on freelance gigs for the past 15 years, my obvious answer to @ericvancewalton’s Memoir Monday latest prompt would obviously be the right time to retire is as soon as you can possibly slam that office door and never look back. Yet, it all depends on what you are willing to sacrifice and, even more important, what exactly are your retirement plans?
Early retirement is somewhat of a novel idea in my country, where most people just follow the norm and work mindlessly till they reach retirement age, so I had to do some research. My first impression is that the FIRE (financial independence, retire early) movement, which apparently took off in the ‘90s is mostly a pipe dream, meant to keep people in the rat race until they’re no longer useful in the workforce. According to data, only a measly 3% of Americans manage to retire in their 40s, with, in my opinion, enough good years to enjoy life. Another 6% manage to escape between 50 and 55, with another 11% going into some sort of retirement between 55 and 59. Actually, many people in the 55-59 age bracket are forced into retirement by layoffs and illness. Another shocking study says that Gen Z youngsters consider 60 as a good age to retire “early”. 60? Really? Well, when you’re in your 20s you cannot imagine what 60 looks like, so we’ll just leave them to dream on.
All articles on early retirement point out you must be willing to sacrifice if you want to retire before 65. Some say saving 25% of your income should be your goal. With the current inflation and dim economic perspective, for most people putting aside or investing 25% of their monthly income seems not doable. But you’re welcome to try, focus on the goal, be a model worker and we’ll see what happens.
My main objection to this FIRE thing is that you risk ending up an empty shell of your former self well before you reach your desired retirement age. Years of slavery will do that to you. For starters, you’ll be afraid to trade jobs because financial insecurity is contrary to your goal. Better keep your head down, put up with an insufferable boss and a mind-numbing job than putting your retirement goal at risk. Be a good slave and you may be rewarded with a few extra years of watching the sunset on your porch! We’ll even throw in a six weeks cruise during which you can stuff yourself silly. (Unless you get seasickness and cannot hold anything down.) Seems like ample compensation for your 30-40 years of service.
I do admit I’m not competent with money, but I cannot understand denying yourself experiences when you’re young and healthy, on the promise that you’ll be free to do what you want when you’re 60. If you reach 60, that is. Years of stress and not enough sleep do lower your chances of making it there.
There’s also the question of what you want to do when you retire. When you’re busy busting your butt to save enough money for retirement, you might neglect building a happy life, you know like family, friends and interests you can enjoy in your golden years. Who are you going to enjoy those extra years with? The wife you barely spoke to most days as you were both in a hurry and focused on your job worries? The kids you provided for without taking the time to know? What about the alone time when it’s just you and your hobbies? People with very little spare time and hell-bent on saving money tend to lack hobbies. Passions take time and sometimes money to nurture. Unless you count falling asleep in front of the TV with a beer by your side as a hobby. You may discover you have all the time you ever dreamed of and nothing to fill it with. I have a friend who quit her job a couple of years ago and although she has no financial worries she is quite unhappy as she has zero interests. And I do mean zero. All her life has been about work and making money, and she lost all her dreams in the process.
As I see it, focusing on retiring early is a trap. I don't believe in those who promise you something better sometime in the distant future, whether it's in this life or the afterlife. If you’re 30 and you’re not happy with your life, you should consider changing things sooner rather than waiting to retire a few years early. Maybe you don’t care much about your job and don’t see what else you could do to earn a living. The best you can do - don’t let it suck you all in. Make the most of your free time - invest in people and passions that make you happy now because all you really have is now.
Thanks for reading
Very good advice, Rebecca. I've heard a few people participating in this prompt bring up the point that you should make an effort to be happy at whatever stage of your life you're in. That makes a whole lot of sense.
I did my best to educate myself about finance and investment starting in my early 20's. I put myself through college, paying as I went, and saved 12% of my salary for most of my career and funneled it into a 401k and Roth IRA. What I learned was even that amount of sacrifice wasn't enough. I left that job at 46 with 23 years of service and only had about $130k in my 401k (and that was much better than most people my age). When I looked at what they said my rate of return was, the math just didn't work out, then I learned about all of the hidden fees that had been siphoned off for years. These fees are all shrouded in overly complex language. Most investors just focus on that rate of return and this is how a lot of people end up with less than they planned on in retirement.
It was a smoke and mirrors type situation that did nothing but provide a false sense of security. I often think about all the things I sacrificed to save large chunk of my salary and would be lying if I said I didn't have some regret about it. The realization I came to was our traditional financial system makes it tough (nearly impossible) for most people to achieve financial independence at any age. Even if we're a responsible citizen, stay out of debt, and save more than recommended it doesn't guarantee you'll meet your goals. I would have been lucky to grow that 401k investment 4x before I retired at 60 or 62 ($520k). The traditional system is designed to keep working people distracted with trying to survive and lulling them into believing a false narrative. I'm so glad I escaped and I see a lot of others doing it now too.
Thanks for explaining things. I didn't touch upon this 401k business as I only know it's something to do with pension, nothing more. Here we have something called "private pension funds" alongside state funds. I wouldn't give these guys one cent... :)
Thanks for participating! I wish I would have invested outside of the 401k. We had a pension at my company too and you didn't have to invest any of your own money in it. So far they haven't eliminated it yet (like most US companies have). If it's still in existence I can start collecting when I'm 55.
I had a meme all ready to reply to this to the effect of 'Do what you love and you'll never work a day in your life', but it seems to have been removed from my computer (or misnamed so I can't find it).
I have had a lot of careers, and retired more than once. Retirement is slippery, because concentrations of assets requisite are tasty prizes larcenous villains hunt down like lions do tasty impala.
In fact, your point that working a career you hate makes a mockery of retirement is a fundamental truth. It is far better to work at something you love until you die. You even point out a friend that is miserably retired due to lack of finding anything worthy of enjoying, which is what we should all be doing always.
This is why I hope to die with a hammer in my hand, before I can't do what I love anymore.
Thanks!
Great way of putting it! Modern society promotes the idea of living at any cost. Or just evading death. I guess many of the young people obsessed with diets and going to the gym have only this in mind without ever asking themselves what they will do in their old age... I don't know...watch Tik Tok videos till the end of times!?!
This part of the retirement has never been said enough. Yes, we will have the free time, but what to do with it becomes a problem. Typically, I envy those who found Hive right after or in the middle of their retirement because, in my opinion, they found something to retire to.
What about the rest of the world who only knew work, and nothing more? They will become bored, restless, and lacking purpose. Before you know it, their mental health is at risk
Definitely, we have at least one stable interest - seeing what's new on Hive :)
You are very right in pointing out the risk to one's mental health once life loses meaning... at least the meaning one found in doing a certain job and making money. Mental health decline goes hand in hand with physical health decline. But then seeing a doctor every other week becomes an activity to fill an empty life. Also, once you get whatever condition you also have an excuse. Life would be so much better, I could do so many things if only I didn't have diabetes or heart problems or whatever..
Well said! That really is all you have...now! A friend of mine was killed in a hit-and-run last week. Gone. Just like that. I'm not someone who has ever worried about the future; somehow, it has always taken care of itself.
Sorry about your friend... I guess this is one of the life lessons everyone has to face at some point, but few actually get it. The friend I was mentioning keeps sharing meaningful quotes about cherishing every moment, yet if ask her how is it going she'll say she's bored and "killing time" on Facebook... Of course, I've stopped asking such questions a while ago :))
Back in my day, schooling almost brain-washed us into thinking the most important thing after school was either going to university, to eventually find a good job in a secure company, work for x-number of years, till we reach retirement age, and that was it.
I had to chuckle at the cruise 'reward'; I know a good number of people who feel a cruise is a must before you die, as if that's all there is to living life! I love how you put it:
We had a pension or a provident fund; I had to go with the pension which is a fixed sum with increments, because that's what the company offered at the time.
I've seen so many people become old before their time because they're unhappy in their jobs, likely feel trapped and cannot see their way out, or rather, leave it too late to change!
You are so right when you say that they then need to find a hobby and make the most of the here and now, as that really is all we have.
Wonderful response to #memoirmonday @ladyrebecca!