Contrary to popular belief, the ideal retirement age isn't as soon as possible. Retire too soon and you may feel empty for never living up to your true work potential. Retire too late and you might always be left wondering what could have been if you had changed course sooner.
For example, a 35-year-old couple making $400,000 might love their jobs. With two young kids under three, both parents might both want to work for 20 more years. This way, they can maximize their capital and support their kids through college. But will they regret retiring after both kids have left home? Maybe since 90% of the time we spend with our kids is over by the time they turn 18.
Then you might have a 30-year old couple making a combined $80,000. They don't have kids and don't want kids. Instead of needing a 4-bedroom, 3-bathroom home, they are happy living in a 1-bedroom condo for much less. All they want to do is travel and lead a simple life. In their mind, the ideal retirement age is 40.
Ideal Age To Retire For Less Regret And More Happiness
To minimize regret and maximize happiness, I believe the ideal retirement age range is between 41-45. By this age range, most will have had ~20 years to save and invest. Most will also be healthy enough to explore the world and do the things they've always wanted.
After retiring since 2012, I've also come to also realize the best reason to retire early is more happiness. Your happiness curve shoots up sooner, reaches a higher peak, and stays higher for longer the sooner you retire.
See the happiness by age chart below. If you can retire between 41 – 45, you will have made enough money to not have much career regret walking away. Further, you're still young enough to enjoy your wealth and fleeting time.
The only challenge with retiring by age 45 is if you have children. Once you have kids, your Provider's Clock starts ticking loudly. You'll want to provide the best life possible for them, which may include expenses like private grade school, sports lessons, tutoring, and family ski vacations – all of which can cost a significant amount of money.
I'm finding this to be true from my own experience as an older parent who had kids later in life.
My Retirement Age Was A Little Too Young
I retired from banking in 2012 at age 34 and mentally unretired by 36 because it was just too boring. There were only so many gothic churches I could see and so many rounds of golf I could play. Even playing pickleball every day can get too much since my hips and shoulders need at least a day to rest.
Now I call myself a fake retiree because I'm busy writing on Financial Samurai, sending out weekly newsletters, and recording podcasts (Apple, Google) in between school drop offs and doctors appointments.
My online activities keep me busy for 15-20 hours a week. Then I spend another 25-30 hours a week are spent with my wife and kids as an old parent wanting to make up for lost time. Teaching my kiddos new things is now my greatest joy. It's also a lot of fun for me to relearn all the things I had forgotten in school.
Not only am I doing these online activities, I also wrote two bestselling books: 1) How To Engineer Your Layoff and 2) Buy This Not That. The first self-published ebook is about teaching you how to negotiate a severance so you can leave a job you hate. The second traditional published book is with Portfolio Penguin, and it helps you think in probabilities.
Probably Should Have Retired 5-10 Years Later
I'm currently 47 years old and have accomplished much of what I've wanted to accomplish. I was even able to have two children, something I didn't think was likely since we started so late.
However, if I were to retire all over again, one of things I would have done differently was try to work for at least five more years. In retrospect, retiring at age 34 was too early.
It would have been nice to have taken advantage of paid parental leave twice. Relocating to a new office in Asia or Europe would have provided a great thrill. Padding my 401(k) and taxable investment portfolio with three more years of profit sharing and contributions would have provided even more financial security.
Oh well! I cannot go back in time. But I can use my experience to help you make a more informed decision about the ideal retirement age. Let's go through the reasons why the age range of 41-45 makes sense to take things down at work.
The Average Retirement Age In America
To get a retirement age baseline, as you can see in the chart below, the average retirement age is between 61-65 for 51% of Americans. 63% of Americans retire between the ages of 61-69.
In a quest to live a better-than-average life, it's logical to conclude the ideal retirement age should at least be below 61-65, the majority age range of when Americans retire. Study after study show most Americans are “disengaged” from work. Therefore, most of us would rather retire sooner than later.
18% of Americans retire before the age of 54. Thus, the ideal retirement age should also be under age 54.
Average Retirement Age Trends
In terms of retirement age trends, women are working longer. Men are also starting to work longer again. Take a look at the chart below.
The trend to work longer for men since the early 1990s is probably due to changes in Social Security, pension eligibility, less strenuous work, longer and healthier lives, more educational requirements, and a decline of retiree health insurance.
The constant increase in retirement age for women is likely due to increasing workforce participation plus all the same reasons men face. In a land of equality, I suspect the average retirement ages will eventually converge at around age 65. We're also living longer.
Now let's look at factors involved in deciding the ideal retirement age. In my mind, the two biggest factors are life expectancy and overall health.
Factors Involved In The Ideal Retirement Age
Here are some factors to consider before deciding when to retire:
- Length of time spent in school
- Cost of education
- Student loans
- Multiple job changes in a career
- Graduate school
- Children
- Whether you rent or own
- The desire to spend time with aging parents
- Healthcare costs
- Passive income generation
- Net worth
- How much you enjoy your job
- Overall health
- Life expectancy
If you spend a fortune and more of your life on your education, retiring early is a more difficult decision. The same goes for the longer you spend in college post high school. One good goal to have is to work for as many years as you've gone to school starting in the first grade.
Target Net Worth Amount For Retirement
In order to retire comfortably, I believe one needs about 15-20X your average annual household income in terms of net worth. You can retire with less, but you'll always be looking over your shoulder wondering when the boogey man will get you.
Social Security and your passive income should help minimize your drawdown of principal. One positive thing I've discovered since leaving work is that you will likely need less than you think in retirement.
Therefore, the fear of running out of money in retirement is overblown. You can always do something to make side income.
For those of you lucky enough to have a pension, a pension certainly counts in the equation. Here's a post I wrote about how to calculate the value of your pension. A pension is much more valuable than you probably realize.
The Ideal Age To Retire Overview
Let us now subjectively talk about the ideal retirement age by various age ranges.
The constant battle we will all struggle with is deciding how much money is enough since there is an endless amount we can make. We've got to time it just right so that we get to enjoy our money for a long enough period in retirement, instead of die with too much.
Retiring Between Ages 20 – 30
Unless you're leaving work to be an entrepreneur or a stay-at-home parent, retiring before 30 is suboptimal, even if you have the money. Your energy and enthusiasm will generally be the greatest at this age. To spend it on a beach doing nothing would be a darn shame.
Further, spending more time getting an education versus working also sounds like a waste of an education. You're expected to live another 50-60 more years.
The ratio of learning, to work, to leisure is off. Therefore, I highly recommend not retiring before the age of 30. Retiring this young will make you feel listless. You will probably feel more loneliness as most of your friends are busy working.
Ages 20 – 30 is not the ideal age for retirement.
Retiring Between Ages 31 – 35
Most people only start gaining confidence at work after they've hit 30. Before then, you're mostly a cost center doing your best to learn everything you can about the business. Why else do you think there are no CEOs under 30, except for at startups that have failure rates of over 90%?
Your 30s is a time to leverage all the experience you've gained in your 20s to position yourself for greater rewards. Unless you have something very clearly in mind that you want to do in retirement, to retire before the age of 35 is to prematurely truncate your potential.
Even though I retired at 34, I believe 34 is too young. I went through seven years of post-high school education, three of which were done part-time for my MBA. As a result, I feel like I didn't fully maximize my MBA. Further, it would have been nice to have a kid while working to take advantage of benefits.
Depending on your net worth, retiring early to live in poverty doesn't make sense. It would be much better to find a more enjoyable job and live a more comfortable lifestyle.
Retiring Between Ages 36 – 40
After five years of seeing what you can do in your 30s, you realize more money and power gets old after a while. You're still young enough to try something new, but you may be getting squeezed by a mortgage and kids.
Just as 30 was a big age for the motivationally inclined, 40 is equally big because this may seem like your last chance to change your destiny. You're still young enough to make a big career change.
If you're burning out, at least you can can conduct some quiet quitting to help you recharge and figure out something new. If you've always been working at 120%, taking things down to 80%-100% might feel like a vacation.
By age 40, you have the wisdom and experience to take on new challenges. Therefore, you don't want to have any regrets by not doing a career pivot. Remember, we're trying to find the ideal age to retire that minimizes the regret of not trying something new.
Retiring Between Ages 41 – 45 (The Best Age Range To Retire)
You're likely in your prime earning years, making leaving your job that much harder. But after 20+ years of work, you won't feel as much shame retiring or taking things down a notch. After all, you've been working longer than the time you spent in school.
You're also starting to feel that life speed is accelerating. 50 is right around the corner! You think more about your mortality because you're probably less in shape and more injury prone. You start experiencing these random health issues that never used to appear before.
If you are blessed with kids, they are likely still living at home with you. They are growing up fast and by the time turn 18, they will have spent ~80% of their time with you already. Therefore, you may have a growing desire to spend more time with them before they build their own lives.
Thankfully, the one benefit to being an older parent is that you might be able to spend a lot more time with your children. Older parents tend to be wealthier with potentially more time flexibility as senior employees.
If you have enough passive income, then retiring by age 45 is the ideal retirement age. You may have the perfect mix of wealth, health, experience, and confidence. Initially after you retire early, you should lower your safe withdrawal rate to help you adjust during the transition.
By age 45, you are more aware of your mortality due to health issues and more friends and acquaintances passing away. If you retire at 45 and die at 60, as many do, you will at least have 15 years to live as free as possible.
Death Rates By Age In The United States
Below are the latest US death rates by age and gender. Between 45-54, the death rate for males is 601.5. But between ages 54-64, the death rate more than doubles to 1,323,3. Then between 65-74, the death rate doubles again and so forth.
At around age 40-45, the death rate starts accelerating. Therefore, you ideally want to retire with enough money and enough health to live as long as possible. An early retirement is a hedge against an early death.
Retiring Between Ages 46 – 50
Retiring between ages 46-50 is the second-best retirement age range. The closer you are to 50, the more you may be wondering how you lasted for so long working at a job that doesn't tickle your soul every day.
Can you truly say the work you do makes a positive impact on society? You're starting to think much more about your legacy, your mortality, and the purpose of life.
You may also begin to wonder how your life might have been different if you had taken the leap of faith earlier. The fear of regret becomes more prominent if you haven't taken many risks.
At 50, you personally know more people who have died. As a result, you may be agitating for change. Somewhere between ages 40 – 60 is the best time to start decumulating your wealth. If you've saved and invested for the past 20 – 40 years, you will likely die with too much. As a result, it's best to run some numbers and spend more money while you're still healthy.
Retiring Between Ages 51 – 60
Perhaps you've waited this long because you wanted your kids to get through college. Or maybe you just couldn't quit the money and the prestige granted upon you after 30+ years of work. Or maybe you are lucky enough to have a nice pension waiting for you.
Whatever the case may be, you better have loved what you did or else you will feel regret having waited until 60 to retire.
After more than 30 years of saving and investing, you should feel financially secure to do whatever you want. If you've stayed in good shape, you may feel like now is the time to live it up.
Retiring After Age 61
Not only do you feel a sense of accomplishment for lasting this long, you also feel a great amount of nostalgia. Where did all the time go? You wonder. Hopefully you're done or almost done paying off all your debt and any children's education costs.
Further, there just might be a healthy pension waiting for you. At the very least, you can withdraw from your pre-tax retirement accounts penalty free if you wish. Just make sure you do so in a way to minimize taxes. God willing, there should be another 20 years of life left to enjoy. You plan to make the most of it.
Retiring after age 61 is great if you love your job. Some researchers report you will live longer if you retire later. Just make sure you're not tricking yourself about how much you enjoy work. If you do, you will regret working so long.
The Ideal Retirement Age Range: 41 – 45
Now that we've subjectively discussed the ideal age ranges to retire, let's get a little more objective. I've used four variables in my model to come up with the ideal retirement age.
These variables are: Income, Freedom, Potential, Return On Education
The lowest score is a 1. The highest score is a 10.
Going through the variables by age, the ideal age to retire is between 41-45 years old.
If you love your job, then the ideal age range to retire is between 46-60 years old. If you hate your job, then your ideal age to retire is between 36 – 40, if you can. In each case, just make sure to have at least 20X of your annual income saved up before you leave work.
41-45 years old is the optimum retirement age range because you've put in your dues and still have enough energy to do something new. At the very least, you've minimized regret by no longer having to wonder what if.
Go through a regret minimization exercise every year to help you identify what matters most to you. Be intentional with your time.
Reviewing The Variables For The Ideal Retirement Age
Income: You will have hopefully experienced several good years of making record high income. Therefore, you will have a good idea of whether a high income makes you happier or not.
Freedom: Your freedom level at home depends on your family situation. At work, you should have more autonomy given your experience. If you do end up retiring between 41-45, you may have the best combination of capital and energy to maximize your freedom.
Potential: With ~20 years of experience, reasonably good health, financial security, and still a decent amount of energy, you have maximum potential to do many things. The more experience you have, the more people will respect you too. Further, if retirement doesn't work out, you're still young enough to easily get a job again.
Return On Education: Unless you finished getting your PhD in your 30s, you've spent enough time getting a return on your education. If you did go to college into your 30s, then the ideal retirement age is probably between 51-60. Again, a good goal is to work longer than you've spent in school since the first grade.
The later you retire, the more risk you take on of not doing everything you wanted to do before you die. Retiring by 45 gives you a reasonable good hedge against an early death.
The Best Retirement Age Can Change
When I was 30 in 2007, my goal was to retire in 2017 at the age of 40. I figured, after spending my 20s learning, I should spend my entire 30s earning, saving, and investing. Just 10 more years of work and I'd be set fo life!
I was regularly working 60+ hours a week and disliked it. If I worked until 40, I reasoned that 18 years of work after college was equivalent to 27+ years of work at a 40-hour a week job.
However, I couldn't last until 40 because I was burned out. As a result, I retired at age 34 in 2012 with about $80,000 a year in passive income. Because I retired so young, I ended up missing out on millions of dollars of upside because a bull market ensued after.
I wish I had enjoyed my job more so I could have worked longer. Or, I wish I could have taken a 3-month sabbatical, recharged, and transferred to a new office in a different part of the country. Or, I wished I could have landed a tech startup job in 2012 and rode the boom.
After all, nobody retires early from a job they love.
Got Lucky Finding A Passion
Thankfully, I had found something more interesting to do. If it wasn't for Financial Samurai, I probably would have gutted it out until at least 40. Then I would have taken at least a 6-month sabbatical to reassess my life.
I worked in a satellite office that already had two Managing Directors. The only way I'd have been able to get promoted was to move to Hong Kong or New York City. Such a move didn't make sense due to the large drop in quality of life compared to San Francisco. Therefore, staying in the same role for at least six more years would have left me bored and a little bitter.
Instead, I left at 34 and focused my energy to grow my own site. It is the creation of something from nothing that will give you the most satisfaction. Here's a post on how to be more creative.
Finally, the severance package was also a key catalyst to leave. Because my severance package provided for about five years of living expenses, it made me feel more comfortable leaving six years earlier than I had originally planned.
Ideally, I should have worked for two more years to get the perfect match. Two more years of savings plus five years of severance would bring me to the ideal retirement age range of 41-45 from a financial standpoint.
If you are unwilling to wait until 41-45 to retire, then please at least negotiate a severance. There is little downside.
What If You Don't Have Enough Money By The Ideal Retirement Age?
Retiring early may be more difficult because of a bear market. Then again, generating more passive income is easier in a bear market since rates have gone up.
Further, retiring during a bear market is better because your finances will have been battle tested. Conversely, retiring at the tail end of a bull market may be one of the worst times to retire. In a bull market, we tend to lose our discipline an inappropriately extrapolate our extraordinary gains far too out in the future. Beware.
But what if you don't have enough capital at the ideal retirement age? Do you keep on working until you can accumulate enough capital? Or do you retire anyway because you want to minimize the regret of not pursuing your dreams?
Because time is finite and money is infinite, I think it's better to retire by a certain age rather than after obtaining a certain amount of capital. To hedge against a disappointing life, take more chances. You can always earn supplemental retirement income. If things don't work out, you can get a job again.
Staying Busy In Retirement
Instead of doing nothing in retirement, you might find yourself as busy as ever. You will naturally spend more time doing what you enjoy and surgically cut out the things you don't.
When you're retired, you're like a kid in a candy store with an unlimited budget. The only restraint is your energy and time.
Life doesn't end once you retire. It simply morphs. You can do a lot of fun and productive things after you leave work.
Here are some things I've done post-retirement:
- Traveled to 30+ new countries in Europe and Asia with my wife. Angkor Wat, Cambodia was truly amazing.
- Gotten my USTA tennis ranking up from 4.5 to 5.0. This would have not been possible without all the newly found time to practice.
- Consulted for several financial technology startups ranging from seed stage to series C. Got a surprising financial windfall from one.
- Became a high school tennis coach and won two Northern California Sectional titles.
- Grew passive income high enough to provide for a family of four.
- Became a father to two children.
- Wrote an instant Wall Street Journal bestseller, Buy This, Not That: How To Spend Your Way To Wealth And Freedom.
- Doing summer jobs landscaping my rental properties with my children to teach them work ethic and help eradicate entitlement mentality
Don't think about retirement in the traditional sense. Think about retirement as a new adventure once working for money and status is over. You can even create your own “Trust Fund Job” to keep you busy and relevant in society.
To minimize regret and maximize happiness, work on doing things you want to do every day. It is much more likely you will regret forsaking time for money than forsaking money for time.
Once you reach your 40s, you will start to feel the importance of making every moment count. Even with a family to support, money depreciates in value while time appreciates in value. Find the point where the lines intersect and you will find your ideal retirement age.
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Retire Earlier With Real Estate
The ideal retirement age requires building enough passive income streams. In my opinion, real estate is one of the best ways to generate passive income. Real estate is a tangible asset that is less volatile, provides utility, and generates income.
By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate around $200,000 a year in retirement income.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. I believe in the long-term demographic migration trend towards lower-cost areas of the country.
My favorite private real estate investing platform is Fundrise. Fundrise has been around since 2012 and has provided a great way for investors to diversify into real estate. They have been around since 2012 and have over $3.3+ billion in assets under management and over 500,000 active investors.
Fundrise offers private real estate funds that invest predominantly in residential and industrial properties in the Sunbelt region, where valuations are lower and yields are higher. Fundrise is a sponsor of Financial Samurai and Financial Samurai is an investor in Fundrise.
The Ideal Retirement Age To Minimize Regret and Maximize Happiness is a Financial Samurai original post. FS is one of the largest independently-owned personal finance sites online. All posts are written based off firsthand experience. Join 65,000+ others and sign up for my free weekly newsletter.
This article resonates deeply with me. The decision of when to retire is so personal and varies greatly depending on individual financial health, career satisfaction, and life goals. I appreciate the emphasis on considering health and lifestyle desires alongside financial readiness. It’s not just about the numbers, but also about ensuring we can enjoy our retirement years while still healthy and active. Balancing these factors thoughtfully can lead to a more fulfilling retirement.
Great read as always! Thank you so much for what you do and keep up the good work. I want to lay our a scenario and see if you agree on this time line. I am 45, my wife is 47 and we want to retire in our mid 50’s. My goal is a 3mil net worth with 2.2m of that being in invested assets. We are currently debt free (technically, still sitting on a small mortgage with more than enough cash to pay it off, just not going to do so right now with it getting 5+% in interest as we have a 2.5% mortgage). As we sit we have $850k in invested assets, with $52k per year added in qualified retirement accounts in index funds. My thought is this will grow to at least 1.8m in next ten years conservatory figuring returns.
I own a share in a thriving business worth around $400k, my best guess is this will be worth at least $600-$700k in next ten years and the business will likely be sold by then and if not I could be bought out of my shares.
Our house is worth around $600k, likely to be worth $800k by then. Outside of a $40k mechanical watch collection this is the whole picture. I figure we will need or want around $140k in annual income in ten years. By my calculations this will get us there but interested to hear your take. Oh and currently we make around $250k per year in income, in addition to the $52k in qualified savings we tent to save around $30k in cash, half goes toward household improvements and the other have was saved for debt pay offs but now that will be saved in cd’s and brokered saving accounts until rates go back down next year.
My situation is way different. I teach at a private high school where teachers’ children get free tuition–as long as you are working there; here is the catch: I’m 53, my two children are 4 and 2, with another on the way. If I want that free tuition at a very fine school, my last kid would graduate when I am 72.
Hi Sam I love this article and your honesty, transparency and suggestions. My husband and I are planning on retiring early and we’ll be in our 40s. We both have jobs we enjoy but my job as a social worker is especially stressful and I can’t imagine doing it until I’m in my 60s. Thanks for the encouragement and advice!
Hi Sam,
I am a female – 68 biologically but probably 10 – 15 years younger physically and mentally. It has not occurred to me yet that I need to retire! I have a husband who is 4 years younger. My net worth including real estate is approximately is 2.4 million. My husband brings no retirement funds to the table.
Can I, should I retire? Being in two relationships where I was the only or primary breadwinner has me skittish. Plus what would I do with myself?
I am growing a small HR consulting practice specializing in smaller businesses that is picking up. I just need to market a little. I have 35 years experience at the senior HR executive level in 4 industries and I hate to let the junk in my trunk go to waste – plus I love the consulting side of what I do. Maybe I should write?
Thanks, I thought your article interesting and eye opening. Should have read it 30 years ago!!
Thanks Sam
This was a great read. I approach early retirement from a slightly different angle (not that these aren’t all 100% applicable) but to your point on ‘return on education’ for physicians it is actually the norm to not start to receive your income potential until you complete training in your early- to mid-30s. From here, incomes skyrocket, but so must savings if you plan to retire early, especially in 10 years to hit this age range. I am all for it, simple…but in no way easy. I actually recently published a post called ‘How much do doctors need to retire?’ that addresses similar points. Thank you Sam for another entertaining and compelling read. Keep ’em coming!
excellent! thank you!
In my youth, after getting out of the service at the age of 22, I decided that “retirement” was too good to waste on “old age”. Until I was 40 I worked enough to save money and “take off” on various adventures, as well as obtain a BA degree. At 40 I figured out that I needed to do something to give me a “retirement”. Obtained a teaching credential (Mathematics) and taught for 20 years. Have been “retired” again for 17 years and don’t regret a single thing about my choices. There is no “one size fits all” in regard to this question.
Retired at 66. Was worried about medical insurance, after retiring, but Medicare is just, or better,than what I was paying per month through my job. One still needs to have a plan for the unexpected.
Instead of using age as the standard, why not look at factors to consider for retirement: financial capacity, health, mindset, fulfillment, readiness to embrace a life not directed at accomplishment, flourishing outside the 8-5 timetable.
I availed of early retirement 2 years after I0 joined government service just to repay my 4 year scholarship. I didnt like the work ethics in government. Never regreted my decusion, I found the best jobs in the private sector!
I’m 48 and just retired two weeks ago. I love it so far. I’m sure I will get bored at some time, so I plan on picking up something part time in the spring just to give me something to do.
What do you plan on doing for insurance?
If you enjoy what you do for a living, then it really isn’t work, when you dislike the prospect of having to go to work then that’s the time to retire if you can afford it.
I will retire when they pry my cold, dead hands fron my laptop and cell phone!
I have a differrent take that I haven’t seen reflected in any of the posts or comments yet:
Instead of investing and saving post-college I lived at the beach (LA then OC), worked an easy job as I didn’t have a real vision for my life yet and partied my butt off. Spent every penny I made post-college while fully indulging my wild oats until I met my wife in my mid-20s. We dated for a few years while I still lived at the beach with buddies, and then finally got married, got serious and launched my tech career in my early 30s.
My working life in tech sales has been lucrative and easy – always had the freedom to do what I wanted, never missed one of our kid’s games and was usually home by 5/6. No one prevents me from taking vacation and my day is usually my own. I’m getting to a position of FI and my wife has an education career that she loves and is allowed to work part time, so I my target is another 5/6 years until we’re 60. By comparison I play golf with an ob/gyn who at 60 recently cut back to part time and no more on-call, saying it’s the first time in his career he can actually relax. That’s the kind of person who needs to retire young. Like the ortho surgeon I feel I am still strong in my game and it’s fun and lucrative, plus by keeping my network alive I’m now able to help my kid get a summer intership here in Silicon Valley with one of the big boys.
Being able to retire when your kids is young is an incredible opportunity. Glad you were able to make it happen and that it works for you.
I like it!
I think the reality is, most people who live it up and “mess around” in their 20s don’t end up building enough wealth to mess around later in life. Instead, they are stuck at jobs they don’t like for much longer than they want.
Maybe only those who really don’t care or who come from wealthy families can afford to live it up while young. And being young is also relative. Now I think 35 is really young. I’m sure I will think in 20 years that 45 is pretty young.
Life is a gamble! Such a constant battle to figure out how to live well while also building wealth and having purpose.
No easy answers. But really good perspective but I love to read from you and others.
Your observation is true, though I will add one caveat: The messing around one can do single and 22 can never be replicated when you’re older. One of my closest friends is a lawyer who deals with exec compensation and contracts, and he has a client that is wealthy beyond belief, and super smart, but divorced his wife of 20+ years to party and have a good time which he regretted not doing when he was young. Of course now there is a kid involved and the risks of recreational drugs and the promiscuous sex holds zero appeal because I did all that stuff when I was young and I’ve been happily married for 25 yrs. I actually see a bunch of this in the Bay area as no one has fun here when they’re young in their career because it’s not really a fun place, at least not compared to L.A.
I don’t think the word “retirement” is the correct word to use. Most of us that have reached financial independence are still working. A lot of us have “transitioned” into doing something else. When people tell me I’m retired, I would tell them I’m still working, but in a different capacity. I’ve transitioned to doing something else. For the record, I hit FI in my mid-40’s, and I do believe it is an excellent age as I’m able to spend so much more time with the family now.
Retired at 57, but eased my way into it, working half time at 55 and quarter time at 56. Reduced hours allowed me get used to reduced income. I used the next several years of no wages to transfer a significant amount of assets from my IRA to a Roth… not so unfortunately, the balance on the IRA is about the same as when I started transferring assets… lucky me! The only unfortunate thing is the last couple years limiting travel and the prince of energy.
There is no exact right age for retirement. The issue should be; “What is the proper time to retire with maximum funds be it investments, a pension, savings, and also a medical coverage for you and your spouse?” So age is not a factor, the total assets and medical benefits is. Thanks Sam for the information you have provided!
Great (updated) post and podcast on the same topic!
I retired at 49 just as the “first” documented case of THE virus hit the USA in WA state.
For me it was a combination of being financially ready (I hope!) and reaching my limits of dealing with corporate bureaucracy, being micromanaged to a level I’d never experienced before (20 years self-employed before this job), and an HR department that didn’t like a “boots on the ground” approach; they seemed to prefer looking at the numbers in their tools and sending out warnings instead of talking to the people they were warning. It was very much a guilty-until-proven-innocent environment and a “better get your approval numbers up or there’s gonna be big trouble!” message.
I had a post-college roommate whose father retired at 51 for health reasons so at age 25ish, I decided to shoot for that goal because I had no other good example to consider. When I told my college girlfriend about retiring at 49, she remembered that conversation nearly 25 years ago and said, “Earlier than you planned; congrats!” :)
I fall into the GoCurryCracker category of not sure how I had time to work before. ;)
Besides travel being unexpectedly curtailed, it was a great decision to retire.
Great article Sam. I am a 43 year old with a few kids and plan on semi-retiring early next year. My company was recently acquired and I have a 1 year severance which will allow me to ‘test-drive’ the semi-retired lifestyle. Semi-retirement seems to be the logical best of both worlds; maintain some income and intellectual stimulation while freeing up time to spend with your kids (while they still enjoy your company). It goes fast!
I’ve read a lot of “money and retirement” books and this post reminded me of the book “Die With Zero” by Bill Perkins. He had a different way of looking at things that what I was used to. Overall it is good to spend money on experiences when you are younger and can do things. As you get older there are things you won’t be able to do. I haven’t been able to ride roller coasters for a long time. I let my kids and wife get “fast pass” so they can enjoy it while they can.
The message is correct, and I’ve been encouraging readers on FS to spend more money to live a better life for years. This post was also originally published before Die With Zero came out.
Just be careful going too far. Bill’s net worth is in the hundreds of millions. He can afford to spend until the cows come home. Most cannot. It’s like how only the super rich or the poor say money can’t buy happiness.
Related posts:
No Point Making Money If You Don’t Spend Your Money
Overcoming Frugality Disease
Stop Frugality From Leading To A Lifestyle Deflation
The Best Decumulation Age To Start Spending Down Your Money
Good reminders for me to update all of these posts as times change!
I found this post interesting in theory because I have been asking folks if they ever regretted retiring too early, however I found nothing that really applied to me.
I’m 56 and at the height of my career as an orthopedic surgeon. I was lucky enough to negotiate a week off a month when I started at this practice 12-13 years ago, which goes a long way to making by job ideal. A few years ago, I also realized that I could stop working and probably never run out of money. I’m naturally frugal and live in a very low cost area.
I remember years ago reading about how you wanted to retire to Hawaii. I actually left Kauai to start this job and then finally sold my house there last year when real estate was crazy high.
I sold another multi family last year, as well.
I don’t have kids to support but do figure I will live to be 100.
But I feel like, if I retired now, it would be a waste. I have probably the best job in the world in terms of feeling like I am doing something cool that is challenging at times, but fulfilling and helps people who are sometimes grateful. It pays quite well, I have great coworkers and partners and plenty of time for hobbies and family.
What I realized is that if someone like me is even thinking about what it would be like to retire early, we are all probably romanticizing retirement too much. This is like folks thinking about their wedding day rather than how to make a marriage work.
I would say that the day you feel like you don’t want to write for this blog is when you really go into retirement. Is retirement when we cease productive activity? When we cease doing things for remuneration?
I’ve always liked working. Maybe I’m in the minority. I actually probably need more training in spending money. Even on my time off, I can’t stop the productive, remunerative activity.
But I do think sometimes, shouldn’t I retire now that I’ve made my nut? But, nope. I’ve made a life I really love. Work is part of that. You have, too, but it’s just not having a regular job of the type you or others thought you should have. Early retirement is like a fairytale wedding. It should be the beginning of something good, not the goal.
Thanks for sharing your thoughts. The one group of people I hope never retire are doctors and surgeons. We need more of y’all to work to help people feel better. Also, with how much Time you guys have spent on education, retiring early would be a waste.
There is this whole personal finance doctors niche online. Basically all of them want to be entrepreneurs and don’t want to really practice medicine as much anymore. It is pretty fascinating. And why I included the “return on education variable“ in my chart below.
You are blessed to have focus and do you want to do what you want and earn a good living. Enjoy it!
But please tell me some of the negatives of working in Kauai? I imagine it might be a little small and lonely sometimes. Which is why I would rather live in Oahu.
Kauai is a great place to live. The people are lovely and it is obviously just gorgeous. But Lihue isn’t the big smoke, like Honolulu. Kauai is very small town/backwoods in a way.
That makes it a a great place to live, but can be a frustrating place to work, unless you have patience, a lot of EQ or have spent a bunch of time building local cred.
Honolulu is like moving to Toronto from NYC. Kauai is more like Quebec.
Some folks like to talk about their weekend before getting down to work. Others can’t stand talking story until the work is done.
I hear you. I like talking story. But I also like getting things done. Kauai is just too small for me.
My stress level Emily goes down from about a five out of 10 to a three out of 10 when I land in Hawaii. It’s such a great lifestyle. Let me know if you start missing it!
Is there a retirement age for entrepreneurs, who quit their job to found successful businesses?
Statistics show the most successful entrepreneurs start their businesses around 40 years old. So that’s another win for the ideal retirement age of between 41 to 50.
Becoming an entrepreneur after 40 feels like you’re playing with houses money a little bit. It’s kind of like a government employee who retires early with a pension and then becomes a consultant or gets a private sector job. Don’t need it. So the extra money is like winning the lottery every two weeks or every month.
Being an entrepreneur is a full time work in itself, although quite satisfying and financially rewarding. I gather you consider this state of running your own business akin to retirement considering the flexibility it offers to do things your way.
I call it fake retirement since I still work 15 to 20 hours a week on Financial Samurai. But it is on my own terms and it provides me purpose and joy. So I continue!
I really like writing, investing, and reading for about two hours from six in the morning till eight in the morning or so. Completely intellectual things then do my fatherly duties, exercise, and nap after a good lunch!
Balancing the physical with the mental health and now with the family is very important to me.
I retired the day I turned 30 and haven’t regretted a single minute of it. I started investing in real estate at 18 and have been able to live comfortably while continuing to grow my income for 6 years now. It’s amazing to be able to stay home with my family and assist in homeschooling my daughter. We travel, hike, cook, and play whenever we want. It’s been amazing and I can’t imagine reentering the workforce again.
Great to hear. Do you have a partner who works? Or are they also retired? One of the things I have noticed over the past 13 years is an increase in people who say they’re retired even though their spouses work. A lot more men are doing this now in particular.
Check out this post: https://www.financialsamurai.com/my-secret-to-retiring-early-with-only-a-4-million-net-worth-and-two-kids/
No, my wife has always been a stay at home mom. We were married at 21 and had also grown up homeschooled, so our plan was always for me to work and her to stay home. So we are both truly retired and able to do pretty much whatever we want. We get a lot of the “so what exactly do you do?” comments from people we meet.
Cool cool. We did homeschooling for 18 months and spent a lot of time with our kids then. We tag teamed to give ourselves breaks.
So what do you do for the rest of the time then?
Hike, mountain bike, cook, RV, donate time in our church, take walks, read books, host guests. I wondered what I would do when I quit working. Come to find out I’m “busier” than ever, just not what the majority of people would consider busy.
This is exactly what I did at 51. Got downsized (again) and said that’s it. Was planning on 54-55 (I’m now 54) just to have access to 401K withdraws etc. but we ran the numbers and can get by on what my wife makes. So you can count me as part of that group.
So much easier to retire with a working spouse for sure. It’s nice to have one working for stability, and one taking a lot more risk or taking things down a lot.
I had that for almost three years when I left in 2012. My wife, who is three years younger than me, ended up working for three more years until she left in 2015. Equality!
I think 40s and 50s are a great time to retire or semi-retire if you have the means and get the planning right. There are only a few people I know who willingly worked into their 80s because they genuinely loved their job. Most people I know either dislike or only partially like their jobs post 40. Being able to pivot into something you truly love when you no longer really need the income is a great way to be semi retired and stay active. The happiest retirees I know are all actively involved with hobbies, volunteering, or working part time in something they find fun.
Yeah, semi-retirement or fake retirement where you go and do something you enjoy is what it’s all about.
I know FOR SURE there is no way in hell I would have lasted in finance until age 50. I already felt in 2008 after the the terrorist attacks in Mumbai my heart was no longer fully in finance at age 31.
Leaving the Oberoi hotel just a week before the attacks felt like death was catching up to me.