I get the feeling a lot of people hate what they do for a living. Otherwise, why are so many people determined to retire early? I recently read about a MarketWatch poll that asked people what they would do to retire in their 30s. I don’t consider choosing to be out of work in my 30s or 40s to be “retirement” as much as the results of being independently wealthy due to the lottery or an inheritance. For me, early retirement is defined as taking Social Security at age 62 with reduced benefits for life. In order to retire at 62, I’d have to make some lifestyle sacrifices now to accumulate enough investment income. When it comes down to it, I am willing to make a few small sacrifices in my 40s so I can retire at 62. However, I refuse to make some major sacrifices to fund an extreme retirement before I am even 50.
Moving to another country
According to the MarketWatch poll, 40 percent of those ages 50 to 64 said they would move when they retire. Thirty-four percent would consider moving to another country to be able to afford early retirement. My husband would have trouble convincing me just to move to another neighborhood. I plan to retire in place. In order to reduce my expenses in retirement and cross the retirement finish line as soon as possible, I am paying off my mortgage early. I should be mortgage free in my early 50s. Moving would set me back due to the moving and closing costs.
Cutting my expenses by 30 percent
When asked which expenses they would be willing to slash if they had to cut expenses by 30 percent, most people chose food and dining out followed by automobile, clothing/jewelry and entertainment. Thirty-eight percent said there was no need because they are already “cheapskates.” I don’t consider myself a cheapskate. I’m not willing to cut my expenses by 30 percent in order to retire early. The truth is, I have to cut my expenses at times by 30 percent or more simply to cover increased expenses such as medical, college and car bills.
Saving a fourth of my income
Evidently, a lot of people are willing to save more than 25 percent of their annual income so they can retire early. Thirty-two percent said they would save more than 25 percent, while 15 percent said they would save 20 to 25 percent. I fall more in to the category shared with 10 percent who said they would be willing to save 5 to 10 percent of their annual income. When I was in my 20s and 30s, I saved a higher percentage for retirement because I didn’t have kids in college or a mortgage to pay. If I saved a quarter of my income for retirement at this stage in my life, I’d be back to eating Ramen noodles and hitch-hiking to work.
When it comes down to it, retiring before age 50 is really as much of a financial fantasy as winning a million-dollar jackpot. Even people who do inherit large sums of money or win the lottery run out of money long before they expected. Retiring too early is a recipe for disaster for those who don’t want to outlive their retirement income. I’d rather learn to be content with my career now so I am in no hurry to retire.
More from this contributor:
I Paid a Price for Failing to budget
I’m Glad my Husband Gave me a Debt Ultimatum
Paying Daily for my Debt