If you want to retire early but don’t have enough financial resources, you can still turn your retirement fantasies into reality by learning from people who “retired” early. They didn’t have sufficient financial resources to support themselves for a handful of decades without any income from working, but nevertheless they made more conscious choices about working and spending so they enjoy life and feel retired.
How I “Retired” In My Early 50s
I was one of those middle-aged workers who was tired of the job stress, waking up to the alarm every day with a long commute ahead of me, and doing the same old thing at work for a few decades. In my late 40s, I dreamed of retiring at age 50, but once I ran the numbers, I realized full retirement wouldn’t be possible at that age. Instead, to get out of the rat race of full-time work, I started working part time at age 51, then retired completely from my professional career as a consulting actuary at age 53.
At that time, I didn’t have enough financial resources to support myself for four more decades with no income. So, I embarked on an encore career to help people with their retirement planning, earning just enough to cover our ongoing living expenses. That allowed me to let my Social Security benefits grow until age 70, when my benefits maxed out. My wife, who retired full time at age 60, and I have also let our 401(k) and IRA investments continue to grow; we’re now both age 70 and plan to start tapping those accounts in the next few years.
Since my mid-50s, I’ve felt retired. I haven’t had to put in a 40-hour week working for “the man” and can spend time pursuing my encore career. My wife and I have had more time to travel, enjoy daily treats like having coffee at the beach, and have avoided weekend crowds by shopping and eating out during the week. I’ve really enjoyed having more control over my schedule.
Another important goal was that I wanted to wait to retire from my full-time professional job until my youngest child was almost through her college years; by that point, I’d have the remaining college expenses in the bank, so I wouldn’t have to earn as much money. She’s been out of school for 15 years now, and my plan worked out just fine.
Adapting From The FIRE Movement
One couple I helped was in their early 40s with three young kids. They had become interested in the FIRE movement (financial independence, retire early), but when they ran the numbers, they realized there was no way they could completely retire any time soon. Learning about FIRE, however, helped them make more conscious decisions about their work and their spending.
To help them reach their goals, they chose jobs that pay far below their earning potential, but they have relatively low stress and more free time compared to jobs that would earn them more money. They only spend money when necessary, owning only one old car. They live in a town-home community that’s less expensive than a single-family community. One significant advantage is that their current community is full of other families, so their children can walk out the door and play with their friends.
To save money, they buy used clothing, toys, and books, or visit the local library to get free books to read. They’re saving to send their kids to public colleges that cost far less than private schools, and they’ve developed a plan that will help them retire in their mid to late 50s.
The positive outcomes are, they have more time to be available for their kids and enjoy life. And they have a reasonable plan that will help them eventually realize their retirement dreams sooner than most workers.
Living The Wanderer’s Life
Another couple I know were in their late 30s with high-stress professional careers and lived in a city with a high cost of living. As a result of the pandemic, they both switched to permanent remote work. After several months of working remotely, they realized they didn’t need to be tied to the high-cost area where they lived.
Instead, they chose to live a life that many workers can only fantasize about—they now live on a boat and continue to work remotely from the boat as contractors. All they need is a stable internet connection and a location that allows them to be able to get to an airport without too much trouble when necessary. To supplement their earnings, they rented out the townhome they own and had been living in. They sold another rental townhome they owned and used the proceeds to buy their boat outright. They sold or gave away most of their stuff, so there’s not much that ties them down.
They now have no mortgage payment and have significantly reduced their living expenses to match their income. They answer to nobody but themselves, they’re having great adventures, all while maintaining the discipline to continue working. They don’t have kids, which is necessary for their lifestyle.
While you may not want to live on a boat, it could be possible to have a similar lifestyle in a motorhome or by living in a low-cost dwelling such as a “tiny home.”
In each of these examples, the people chose not to adopt a traditional retirement, one that comes with no income from working for the rest of their lives. Instead, they accepted reduced income for a lower-cost lifestyle that gives them the advantages of retirement. These lifestyle changes enabled them all to enjoy life more and feel “retired.”
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