What Does “Early Retirement” Mean Anyway?
I love the topic of “Early Retirement”, because that alone is the subject of so many books. But as a reader of this blog, you get full discussion of that topic for free.
For previous generations, perhaps our parents or grandparents living stereotypical middle-class lives, retirement used to mean reaching age 65, pre-purchasing an RV, or a golf membership, or a one-story house with no stairs, and a wheelchair. The lucky ones would retain enough health to get out and buy their own groceries, the less fortunate would be in an assisted living facility by the time they hit 70.
And can you blame them? If you work 9-5, five days per week, fifty weeks per year, for 45 years, it’s pretty easy to get into a funk and lose your physical fitness, your immune system, and your desire for any sort of change.
But No, junior Mustaches, you and I reject that old kind of retirement and put forth our own definition: Retirement is earning the privilege of being free to enjoy the balanced lifestyle of our dreams, without “working for a living” getting in the way too much. You don’t have to quit working altogether, you just have to feel secure enough to be choosy about your work, and your schedule.
My wife and I have have been “retired” for over five years now, and this is what it means to us: We quit our jobs as software engineers just about the time our first baby was due. But we didn’t quit working altogether. I started a little company to build custom houses (since building things was always my most cherished hobby), while she started some very flexible part-time work with another company. Overall, we took about a 100% pay cut (since my construction company ended up losing money while she continued to earn some), but smarter people could accomplish this drastic career switch even more easily.
The idea is that if you are earning quite a bit, but you trim your lifestyle down so you are only living on about 25% of that amount, then you are ready to retire when:
- You’ve finished building your golden nest egg so you can give up the “75%” part of your salary you were saving.
- Your savings (combined with some optional part-time work) will continue generate that other 25% for you reliably, forever.
So what do you do with all the free time? That’s up to you, of course. But here’s what we have found ourselves doing for the past five years:
- Raising our little boy: sure, it is possible to raise kids with two careers, if you outsource most of the work to daycare or some sort of nanny. But we like to do it ourselves. A family breakfast together seven days a week, afternoons spent playing in the creek while the rest of the world works, time to read and learn together at all hours.. stuff like that.
- Becoming bicycle heads: without fixed schedules to meet, and being around at home a lot, it’s easy to saunter around town by bicycle. We have 3 different types of bikes each, and use them to coast down to the restaurants, bounce up the rocky mountain trails, and slice through the country roads and curvy canyons available near our house in Colorado.
- Taking impromptu trips: with no employers to ask for permission, we like to take two-month summer trips back to our homeland of Canada to let the two amazing sets of grandparents hang out with their grandson, and do lots of midweek camping or other outdoorsy trips. This is a big advantage in Colorado since the mountain highways are jammed up to the point of being unusable every weekend due to the ski resorts.
- Trying new things: although we feel pretty busy, it is a healthy business that still allows us to read books at night, try new exercise classes during the day, and meet friends for Indian Buffet lunches downtown. Back in the full-time career days, it was an over-the-top feeling of busy where it would take three weeks before you would get time to change a light bulb or to empty the dishwasher.
It’s kind of obvious that there are lots of benefits to early retirement. That’s why most of you are reading this blog. But we’re not just dreaming here, and we’re not making wimpy attempts at ‘early’ like age 50 or 55. What I advocate is putting the pedal to the metal and getting there in 7-10 years.
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