How Early Is Early Retirement?

About 10 years ago, when I was in my late thirties, one of my first bosses announced his retirement from the Megacorp we both worked for. Bob is a quiet, intelligent – truly thoughtful guy – who seemed better than most at understanding how to balance the stresses of work and home.

I was quite surprised to hear that he was retiring because I didn’t think he was “old enough”. In fact, I set up time for a cup of coffee with him on one of his last days in the office to hear about what he was planning to do when he left. It turns out he was turning 55 which was just old enough to qualify for an early retirement and medical coverage. He had plans to travel, indulge in his photography passion, and spend time learning about new technologies.

I’ll also never forget what advice he gave me that day. “Sparky, you are much younger than I am, but save your money so that by the time you are 50 – if you find yourself working for someone like I am now – you can walk out any day you’d like. I’ve enjoyed knowing that for the last 5 years of my career” I had a good chuckle because he was working for a woman who was known for being very difficult to work for and positively vindictive when crossed. I could tell that it gave him great satisfaction to say “see ya” with 100% confidence, and that advice became a big part of my own plan for FIRE.

At the time, I had a negligible net worth. Our mortgage was our only debt, but it was great enough that it offset almost all of our life savings. Our investments weren’t doing great either, but my career was going well, my income was going up, and we were able to start saving much more than we had ever done before. I don’t think I believed that being retired at 50 was really going to work, but I thought that even if I didn’t make it, I could probably get to 55 like Bob.

The average retirement age in the USA is 62. Based on some 2010 research from the University of MN that I found online, it looks like less than 5% of folks retire at 50, and less than 15% by 55. A huge percent of workers join the FIRE at 60, and a very small percent are left by 75.

So what should you shoot for? I think anything 55 or earlier definitely counts as “retiring early”. That is early enough to feel like you really achieved something that few people have been able to do. I know there are also people who retire in their 30s and 40s – which is amazing – but I think these folks are cut from completely different cloth than I am and are out to ace the “frugal living” lifestyle more than live the sweet life I’m looking forward to.

So, to answer my headline question about how early is retiring early? For me it’s FIRE by 50. My exact plan is to retire from Megacorp on April 1, 2016, which in addition to being April Fools Day, it also happens to be conveniently on a Friday. Since I will be just two weeks short of my 50th birthday, I can really say I retired before I turned 50. (“Oh sure, I was in my forties” I’ll say with a smile the rest of my life!)

I look forward to keeping you updated on my journey each month to see how this plan plays out. Will I succumb to “one more year” syndrome? Do you think you would? What’s the age you are looking to cash out?

5 thoughts on “How Early Is Early Retirement?

  1. I think 50 is a great goal. I would love to retire in my early 40’s but I have realized that dream is impossible without a high paying career, which I do not have. I’m 26 years old which gives me 24 more years.

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    • Saving is as much related to what you SPEND as it is to what you MAKE. In our twenties, my wife & I managed our spending closely and banked all of our raises. After a few years, this allowed us to be saving a huge % of our income. Do it!

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