I used to be jealous of the women I knew who could retire in their late 40s after enjoying a satisfying career. Of course, they had high-earning husbands who could support their lifestyles. I was not sure whether I could afford to retire early, but it may just be a matter of ditching my middle-class mindset. According to a recent article by The Motley Fool, Americans the concept of retirement is relatively new from a historical perspective. Recent generations depended on pensions to supplement their Social Security benefits. Many people in my Generation X have no pensions to depend on, but most of us have access to the Roth IRA and other retirement accounts. I thought about the various tenants of the middle-class mindset that I could reject in my quest to retire by age 55.
Staying in the starter home
According to the Motley Fool, the No. 1 stupid rule of the middle class is to buy as much home as one can afford. In other words, take out the biggest loan offered. My husband and I were told we qualified for a $300,000 mortgage, but we took out half as much. Because of our decision to stay in our starter home, we can pay off our mortgage in 20 years instead of 30. We spend less money on maintenance, utilities, property taxes and interest.
Being happy with the VCR
A second stupid rule of the middle class is to upgrade with every pay raise. I still have a VCR player, which plays my old exercise tapes just fine. I saved thousands of dollars by exercising at home instead of using the gym. Although we also have a DVD player and big screen television, we don’t upgrade just because of pay raises. In fact, I pretend we don’t get pay raises by automatically saving the extra money for retirement. According to The Motley Fool, upgrading is like being on the “hedonic treadmill.”
Saving beyond the 10 percent
I’ve always taught my children to save 10 percent of all money they earn. However, I meant they should save a minimum of 10 percent. According to The Motley Fool piece, saving 20 percent of a salary can lead to retirement in 30 years, while saving 65 percent of a salary means retiring in just 10 years. If I can save all of my salary and live on my husband’s salary, I can easily meet my goal of early retirement at age 55.
Giving up the daily commute
My husband and I have definitely rejected the middle-class belief that commuting is a part of modern life. We spend most of our time telecommuting from our home offices. We save hundreds of dollars each month on our wardrobe, gasoline, car maintenance and food. According to the Motley Fool article, it costs 56 cents to drive one mile. Since the average commute is 32 miles, commuting costs $4,500 each year. We could almost fully fund our Roth IRA accounts by giving up the commute.
Although I doubt I’ll retire in my 40s, I have more confidence about my prospects for retiring in my 50s. For me, the answer isn’t about getting my husband to go out and earn a higher salary. It’s about downsizing now instead of downsizing when we are old. I no longer have any reason to be jealous of anyone else because I’m getting closer to my financial goals with my new money mindset.
More from this contributor:
How I Tricked my Family into Saving
Making the Leap from My Money to Our Money
Making it in the Middle Class