As an early retiree since 2012, let me share with you the secret to early retirement. I originally wrote this post in 2010 when I was desperately seeking to leave my arduous finance job. I had been working in banking for 11 years and was completely burned out.
Now that I have more than a decade of early retirement wisdom, let me share some interesting thoughts about retiring at age 34. Instead of going the more honorable and grueling route, I should have been more strategic.
The Epiphany To Early Retirement
Sometimes I feel like a genius. Sometimes I feel like a financial dumb ass. Today is not one of those days of stupidity.
It hit me during bath time the other evening that the secret to early retirement isn't spending less than you earn, saving at least 30%+ of your after tax income, buying only what you need and living a frugal lifestyle. Nope. That's just status quo where one should be living that lifestyle anyway.
What I discovered is so much deeper and so much more powerful than anything ANY of us personal finance “gurus” have discussed.
The secret to early retirement and leisurely living is so amazing that I don't know if I should even share with you guys. After all, I could probably write a book, do a video, and make tons of money in the process.
Alas, I'm a nice guy, and am down with helping my fellow brothers and sisters get ahead so I'll share with you the secret. There aren't any gimmicks, just the straight up truth.
Before reading more, see if you can guess what exactly it is I'm talking about. Think long and hard. Now that you have, know that you could have just clicked “read more” anyway because you'll never figure it out!
The Secret To Early Retirement
The secret to early retirement is having a working spouse! It's as plain as day! Anybody who tells you they retired at an early age has that strong working man or woman by their side. Don't believe me? Read around and inquire.
It's so funny that I never thought about this light bulb moment before. I've been so busy working to accumulate my nut that I lost site of the fact that all I need is a spouse to continue working, put me on her health insurance plan, provide shared income and voila!
I can retire by 40 without even trying! What's also equally important is that your working spouse gives you the confidence to retire early since she or he is your safety net. Don't let life pass you by with regret.
The problem with this type of thinking for a man is that more times than not, your spouse is going to think you are a lazy dirt bag for not earning a steady paycheck every month. Women will be able to sense if a guy has no ambition, which would probably mean she won't be with you in the first place!
Convincing Your Spouse To Keep Working
Guys have it tough. Remember the post, “How To Get Your Super Motivated Boyfriend To Marry You“? Well, the whole concept of that article was to inform the ladies that you can't rush a man until he achieves his financial and career goals. Guys are highly pressured by society to do something and be somebody. When a guy doesn't live up to his potential, life can get tough!
I'm not saying that society doesn't put pressures on a woman to create something amazing as well. I'm just saying how many guys can find women who are happy to just have them stay at home all day while she works? Not many!
The best case, and frankly the only case scenario I think about is that when one retires early, so will the other to go explore the world together. There is simply no other way around it.
After a tremendous amount of research, I've come up with a way to convince your spouse to work longer so you can retire early. I've talked to dozens of men who have been able to do just that.
A Better Retirement Lifestyle
Although the secret to early retirement is to have a working spouse, being the only won retired can get lonely.
I retired in 2012 and my wife worked for almost three years before she retired as well. Our deal was that I would go first to make sure this early retirement thing would turn out OK. She was also three years younger than me.
Why I was retired, I often go to bored! While she went off to work, I was stuck at home twiddling my thumbs often. Thankfully, I had Financial Samurai and tennis to keep me busy.
When my wife finally retired in 2015 with a great severance package, retirement life got much better. I finally had a companion to spend all day with.
Life is so much better being with someone you love. Life is even better being with someone you love who works and lets you do nothing all day long!
So for all you single folks out there who wish to retire early, think long and hard before settling down with someone. Ask yourself whether he or she will be unperturbed by your desire to kick back and live the good life while they work. If the answer is better than 50%, lock it down and don't look back!
Related: Can You Really Retire Even If You Have The Financial Means?
Early Retirement Post-Mortem
Here are some more secrets to early retirement that will make your life better:
- If you are going to retire early you might as well try and negotiate a severance package. I negotiated one that paid for six years of normal living expenses. It was the best thing ever! As a result, I wrote a book to teach you how as well. It's called, How To Engineer Your Layoff.
- Retire to something, not from something. I retired and focused my attention traveling, playing tennis, and writing. Financial Samurai is my passion that keeps me mentally active. After more than 11 years of publishing three times a week, Financial Samurai also provides a healthy supplemental retirement income. If you've been wanting to start your own site, here's my step-by-step guide on how.
- Being able to raise your kids full-time, especially during a global pandemic, is priceless. You will never regret all the time you spent with your children when they were little. But you might regret spending all that time at work trying to make more money and climb the corporate ladder.
- Early retirement isn't a panacea. There are also some downsides to early retirement nobody talks about. Early retirement won't make you instantly or permanently happier. But you will worry less about money if you've developed enough passive income streams to cover your living expenses.
There is not a day that goes by where I'm not thankful to do as I please. The sacrifices in my 20s and 30s were worth it. I think the sacrifices you make today will be worth it as well.
Recommendation To Retire Earlier
Sign up with Personal Capital if you want to retire earlier. Is is a free online tool which aggregates all your financial accounts on their Dashboard. This way, you can see where you can optimize.
Before Personal Capital, I had to log into eight different systems to track 28 different accounts. Now, I can just log into Personal Capital to see how my finances are doing. Simple!
One of their best tools is the 401K Fee Analyzer. It has helped me save over $1,700 in annual portfolio fees I had no idea I was paying. Their Investment Checkup tool is also great. It graphically shows whether your investment portfolios are property allocated based on your risk profile.
Finally, utilize their Retirement Planning Calculator. It uses real data to come up with various financial scenarios based on Monte Carlo simulations. You can input multiple expenses to come up with as realistic an assessment of your finances as possible.
Ha! My husband did just that for a long while! Also, there was his kid to raise at the same time! Thankfully now he is employed, his kid is grown-up and out, but I’m still the breadwinner of the house. Not much hope for me to retire earlier than 61…
If you can give me some pointers on how to find this so called boyfriend, I will give you a finder’s fee! How does that sound? In the meantime, I’ll live frugally and stock away 30% of my money each and every month, ha ha.
Hahaha, nice! Tiffany employees have huge discounts! She can sped her entire salary on bling!
Men of the world, unite for equality!
Thank god for women’s equality. Funny statistic, since women have become a major part of the work force their happiness has decreased while male happiness has increased as a whole.
Cheers,
Dan
Oh yeah? I haven’t read that statistic! I wouldn’t be surprised!
Go women’s liberation!
We are working towards living off of one income to start. Then down the road I may do contract consulting work so I don’t have to work as much. Eventually we hope to have enough money that we won’t have to work at all.
Sam,
Now I have renewed, elevated respect for single men retiring early. As long as their retirement is not based on alimony from a famous honey. I remember media portrayed Jennifer Lopez’s ex as a victim yet the guy ended up getting cool $10 million from her. :)
Man, poor ex JLo hubbie!
Sorry Sam, but this has got to be one of your lamer posts.
Or maybe the subject hits a little too close to home. I am 49 and full of energy and my husband (also quite spritely) is age 62 working as a postman. Alas, the post office won’t keep him after age 65, unless he finds a private postal company to work for (dream on, this is middle Europe). Thank goodness my pay has recently doubled but I am not looking forward to being the breadwinner for the next thirty odd years. OK optimism, don’t fail me now!
In the meantime – BLECH!
Sorry Anastasia! The post was meant for all those folks bragging about how they were retired early and living the good life, when they all had working spouses to provide for them!
I agree that the secret to early retirement is to have BOTH spouses work a full career each. You can’t save money during your 20’s thru your 40’s when you have only one spouse working plus you are paying for kids, mortgage, etc all at the same time. My husband and I are in our mid-40’s and, despite the economic downturn, are well postured to reach our retirement goals by age 55. We live in Honolulu, one of the highest cost of living areas in the world and have two kids going into college in the next couple of years. We don’t live in a McMansion, never have, but have always lived in decent middle-class homes. This is not a proposition for the faint hearted. We struggled a lot when our kids were younger juggling daycare, long working hours, dual-work schedules just as all parents do. I honestly think that one spouse quits working when the kids come along just because they get tired of hassling with the daycare issues! However, if you can stick it out, both stay continuously employed, and save one spouses entire paycheck for retirement, any couple can meet their goals of a comfortable retirement. The kids turn out just fine and learn valuable skills when they have to juggle career and family later on.
Mae! How did I not respond to your comment from October? Fantastic to hear you are living in Hawaii? do you love it? I long to be there!
I will have to disagree with you that it’s just not true you can’t save in your 20s-40s. Please read this post I wrote with savings guidelines by age. No excuses!
It’d be nice to have a money bags spouse, but it would feel weird relying on someone else 100% for everything. I think it feels really good and liberating making your own money and having the freedom to spend it however and whenever you like.
Hot with money and nice. Who could ask for anything more?
… Might be the fast track to retirement… or divorce.
Maybe! I see a lot of guys wanting to go the early retirement route w/ the wife working. It’s a neat trend!
I really wish you would admit that the economy is NOT getting better in 2011, or 2012 for that matter. The SF Bay area does NOT represent the US economy.
We’re headed toward a double dip – there is NO recovery with a 9.2% unemployment rate, escalating commodity prices, and wage pressure from emerging markets. There is simply not enough aggregate demand here to increase production, and therefore increase employment.
What a vicious cycle!
People tend to confuse the NYSE and NASDAQ with the economy when they actually disconnected from each other awhile ago. The stock market will eventually catch up with the fundamentals though.
Stay defensive!
Umm, Americans can make $50,000 a year just existing and filling out forms! https://www.financialsamurai.com/2011/07/11/free-money-from-bailout-government/. Now that’s pretty sweet!
If the economy is so bad, why will Obama be reelected in 2012?
If the economy is so bad, why are office rents and the stock markets up 80% from it’s lows?
Nobody stays in an area that’s bad. They move to where things are hopping. Where do you reside?
Texas, where things are very good.
Obama may be reelected, but this would be the result of being an incumbent coupled with having a fractured opposition (Republicans). However, if the unemployment rate is hovering around 9% next Fall, he will not get reelected. Unless of course a magical round of stimulus hits bank accounts next Summer.
For the record, I consider myself to be independent.
None of the structural problems that led to the previous recession were actually fixed and the European contagion is not going away. Greece WILL default.
Let’s not even get started on the US housing situation which will be flat for at least a decade, leaving millions of homeowners feeling less wealthy than they would like.
For the record, I completely agree with your perspective on net worth. Housing has not place in it, but that is now how the majority of the population has been conditioned.
Sorry if there are grammar/spelling issues, but I can’t see the far right side of this text bo.
Hmmm, you are saying the economy is screwed, yet you just said you and your area is fine?
Do you see my point here? The only people saying things are not fine are fine themselves, which means everybody is fine!
I am going to revisit this thread in about 4-6 months.
One of us will be wrong by that time.
How do we know who is right or wrong?
I wrote this post in 2010, and the markets have zoomed back!
Have you checked the markets lately? It’s Feb 1, 2012, and things are en fuego!
So here we are…
Economic data has turned from mixed to slightly negative…
Europe is still a mess…
Housing data was bad this morning…
Markets were levitating with hopes for QE3 earlier this year – which is off the table for now…
China is slowing down, Japan is crashing…
Rents are on fire, housing prices are moving up, the stock market is up 30% from October 2011, unemployment rates are coming down, and Obama is going to get re-elected. Not bad!
Nice one!
Better keep my eye out for those sugar mommies…
It certainly is one way to retire early. Live off one income and use the other income to invest in property for example. The trick is to keep your general living expenses low. Back to good ol discipline.
Cheers!
Yup, so well said. Better to be with someone and retire.
Thanks for sharing!
The secret for early retirement is early financial freedom. Since financial freedom will give you the time you need to enjoy life. Most of us employees work for financial sufficiency but it is not enough to attain early retirement.
Yep, that is definitely cheating if the spouse pays the bills because realistically that person couldn’t afford to retire. Finding a wealthy spouse is a win win!!
My BF is home all day and now he’s back in school so he’d effectively the house quasi-husband. Kinda works for us since I’m the ambitious one. I will say that it’s nice to come home to a hot meal, teh laundry done and the bed made. Or, I think it would be if he did them all. :)
Hahaha, ouch! Would the BF be OK if you described him as ambitious? If so, he is a KEEPER b/c you dig the arrangement! You just have to tell him to do all that stuff you want to when you get him! Tell him to throw in a 5 minute massage too.
I’m not close to retirement but I do hope to be well prepared for it when it does come. My parents did not plan well at all leading up to their retirement and it’s really impacting them. I think 2011 will be a good year for me to build up my savings. I sure hope to get a bonus – b/c that will help tremendously. I miss the big bonus days! Now we’re happy with even getting a few hundred dollars instead of zip, nana, zilch.
I wish you a BIG, BIG bonus! Things are coming back in 2011, so for firms to NOT reward their best employees is a disaster since there will be more opportunities out there.
I would be okay with my husband staying home if he did all the things housewives are supposed to do ;). If I came home from work to find he’d sat around watching football all day and the place was a mess he’d be outta there!
Lol, bad husband, bad, bad, bad if he did that! But…. it is football season now with the playoffs almost in full swing!
But, let’s turn it around…. is what you said the expectations of many men for their housewives? What about if one was wealthy enough to hire a house keeper… does the stay at home spouse still have to do a lot?
Hahaha, I like this post! :) I’m a very strongly feminist woman so I’m all for supporting my future husband! I would absolutely love this! Obviously, I’m flat broke right now, Sam, but come by in 10 years time, and we’ll work something out. ;)
Awesome! The world needs more strong women like you! In 10 years, you will be a man’s dream sugar mama! :)
If I was the houseman, I would cook the MEANEST toast and hard boiled egg my woman could find! Also, I’d make sure the house is clean, and the wood floors are polished. I really enjoy decluttering and cleaning. I also LOVE working in the garden. I find it very peaceful and rewarding.
Women of the web, you want me as the houseman! Oh yeah, I’ll do some writing on the side and bring in some bacon too. E-mail me! * wink *.
Your’e hired!!! (Moral – be careful what you wish for).
Thanks! I charge $100,000 for being the houseman! Thanks! New post up on FS called, “Stay At Home Men of The World, UNITE!”
https://www.financialsamurai.com/2012/02/03/stay-at-home-men-of-the-world-unite/
For you guys living in the western world, this is the wrong path to early retirement (i.e., having a working spouse). Are you serious?!
You want to retire early as a man? 1. Don’t get married! 2. Don’t have children. 3. Live frugally. 4. Build a profitable business, or earn a decent salary. 5. Save your money. It’s that simple.
As a man, getting married for extra income does not make financial sense, and in fact, it’s financial SUICIDE because western women are VERY expensive women to maintain (i.e., 20k wedding ring, fancy vacations she will demand you take her ), and also, the divorce rate is over 50%, so it’s a good chance your spouse will divorce you and take your home, and leave you to pay child support and alimony payments.
Another thing guys, 90% of women marry UP, so just how much can a woman financially help you anyway?
Oh come on mate, isn’t that kind of a stereotype to write “Western women are VERY expensive women to maintain”?! Also, what do you mean “90% of women marry UP”?
The whole point of my article is to change this way of thinking. Why can’t a man marry up? Why can’t a man retire early to take care of the family? We men need liberation baby! It’s almost 2011 for goodness sake!
I think my wedding ring cost ~$1300 (no engagement ring, we went to Vegas. The entire affair including rings, our hotel, plane tickets, was <$8k, and then the wedding gifts of cash covered 5k of that. We paid for the rings.).
I guess if you're only interested in expensive women, then you'll only find expensive women wanting to marry up. Ask yourself: is makeup worth the cost?
-earns her own bucks
Maybe guys can just date expensive, hot women but never marry?
I published my manifesto at my About blog page. Check it out.
https://retireby40.org/?page_id=205
I hope the link is ok to post here.
I think lots of people have come up with the concept, but you’re the first one I’ve seen calling it early retirement. The usual term is trophy-wife, boy-toy, etc. The IRS calls it a dependent.
Pretty neat huh? Women have been retiring early for centuries, now it’s the man’s turn. Are you married by any chance and dependent on the wife for health insurance and such?
I’m married, but I don’t depend on DW’s health insurance (nor income). She has a company plan. I have a HDHP+HSA obtained on the free market.
I think the most reasonable definition of retiring is “no longer working for a living”. Those women who have been retiring for centuries have been housewives. They’ve been in charge of cleaning and cooking, etc. (Incidentally, for us, we split it in half.) Incidentally, when appliances were introduced in the early 20th century, they ran out of things to do and suddenly had plenty of time on their hands. Consequentially they universally developed a fascination with extreme cleanliness. As a result, for example, people now spend as much time doing laundry as they did before the introduction of the washing machine. Tragicomic indeed—it somehow reminds me of work for some reason ;-)
Jacob, I think it’s OK to depend on the wife for health insurance and side income. There’s no shame in that man. She provides you the security to allow you to blog and work on your hobbies in your early retirement. It’s all good. Embrace your situation and give her a big hug!
The company health insurance may not be as good as the plan he’s got though. In my case it’s some of the best insurance around (and free free free w/no copays) for DH and myself, but who knows how much Jacob’s wife would have to pay extra for him, vs. his low costs now…
That is pretty much exactly my plan. I will retire before 40 and yes I have paid my due.
I have been working a corporate job for more than 14 years and during this time.
My gf then wife, went off to peace corp. for 2 years, back and work part time for a year, work a somewhat crappy corporate job for a few years, back to school to get a master degree, and is now working in a position she likes for a few years.
All through this, I worked a steady well paid job and saved as much as we could. Now that my wife found a job she likes, I’m more than half way to my goal.
my retirement plan – work independently and don’t have to answer to anyone and hopefully make enough to pay for food. wife keep working. do not dip into retirement fund.
well, my definition of retirement is leaving my corporate job so….
That is so awesome that you are going to make your wife keep working once you retire at 40! Go wife and go you! Great arrangement, whoo hoo!
Retirement is an event that will occur one day for sure early or late. so planning for retirement early is a right and safe strategy for retirement early of late.