Shoot to retire by a certain age, not by a certain financial figure. Time is finite. Money is not. You can always make more money, but you can never make more time.
Live until 60 and then say good-bye. This has been my mindset ever since I moved to San Francisco in 2001. I know expecting to die by 60 sounds a little depressing, but it's a rational framework to help prepare for your financial future.
By expecting to die 20 years before the median American male life expectancy, I've forced myself to accumulate wealth faster in order to enjoy life sooner. Some of you might be thinking, “why not make money and enjoy life fully at the same time?” I agree, it can be done.
But I'm talking about doing the extremes, like going to business school for three years while working 60 hours a week, instead of taking a two year vacation from work.
Or saving 50-75% of your after tax income every year. Or starting a side hustle that takes an extra 20 hours a week that might one day grow large enough to tell your micromanagers to screw off!
It's much better to shoot to retire by a certain age so you can increase your chances of living the life you want after retirement. For background, I retired in 2012 at the age of 34, after 13 years working in investment banking at Goldman Sachs and Credit Suisse. I haven't returned to work since.
Retire By A Certain Age Is Better: Wealth Goals Versus Life Expectancy
The financial world writes about achieving certain net worth figures before being able to comfortably retire. I've got my Average Net Worth For The Above Average Person post, which encourages folks to shoot for a ~$2 million+ net worth by age 60. See chart below and click to understand its methodology if you wish.
This chart is but a guideline for those wondering what net worth or retirement figure to shoot for. It's not the end all be all resource for financial security in retirement.
You should run your own numbers through a free retirement planning calculator to see how you're doing. Try and get to at least a 90% probability of achieving your retirement goals through the Monte Carlo simulation.
I firmly believe many readers here will be able to achieve these target net worth figures. In fact, I know so based on the survey results of thousands of readers who've participated so far.
However, if we study available wealth data provided by the US Federal Reserve, Fidelity, and other financial behemoths, we know a good many more will fall short.
Shoot To Retire By A Certain Age
If you can't achieve these figures, don't worry! You will still lead a pretty darn good life thanks to the infrastructure and social safety nets we've put in place here in America and in many other developed countries in the world. Living in the States is like a walk in the park compared to many other places.
But there is one certainty in life: death. And after millions of deaths, we know that the average life expectancy for men is around 78 and 82 for women. We all like to tell ourselves we're living longer nowadays with better medical technology and lifestyles. But how will we really know unless we outlast them all?
Imagine spending 38 years of your life after college working to save and invest money only to find out you've got a malignant tumor in your brain at age 60 with one year left to live. What a shame!You probably would have spent those 38 years a little bit differently if you had known your outcome.
Flip Saunders, for example, long time NBA coach just died at age 60 of Hodgkin's lymphoma after only being diagnosed five months earlier.
We need to get out of the mindset of trying to accumulate X amount of money, and focus more on enjoying the journey. At whatever age you choose to retire, make the move with whatever amount of wealth you've accumulated.
The Top Five Regrets Of The Dying
If you don't believe one should shoot to retire by a certain age, please read the top five regrets of the dying, written by palliative nurse, Bronnie Ware. She took care of her patients during their last days. During this time, she asked many of her patients about their regrets.
1. I wish I'd had the courage to live a life true to myself, not the life others expected of me.
“This was the most common regret of all. When people realise that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honoured even a half of their dreams and had to die knowing that it was due to choices they had made, or not made. Health brings a freedom very few realise, until they no longer have it.”
2. I wish I hadn't worked so hard.
“This came from every male patient that I nursed. They missed their children's youth and their partner's companionship. Women also spoke of this regret, but as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence.”
3. I wish I'd had the courage to express my feelings.
“Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result.”
4. I wish I had stayed in touch with my friends.
“Often they would not truly realise the full benefits of old friends until their dying weeks and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying.”
5. I wish that I had let myself be happier.
“This is a surprisingly common one. Many did not realise until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort' of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content, when deep within, they longed to laugh properly and have silliness in their life again.”
Nowhere in these five regrets did people talk about making more money! Meanwhile, regret number two talks specifically about wishing they didn't work too hard. Therefore, if you shoot to retire by a certain age, you will avoid at least a couple of these regrets.
Good Things Happen When You Change Your Mindset
Once you decide to shoot for a retirement age, rather than a retirement number, here's what happens:
1) You become much more appreciative of everything and everybody around you.
You're simply more happy to be alive because you don't think you'll live forever. You're always mindful of everything around you, instead of going through life with tunnel vision.
2) You take more risks based on things you've always wanted to do.
How many talented people do you know spent their lifetimes talking about doing something big, but never had the guts to go after their dreams? I had big dreams of moving to China and becoming an entrepreneur right out of college. But I chickened out once I got a job in finance at Goldman Sachs.
I chose the safe route for the next 13 years until I finally figured out how to negotiate a severance package to build a lifestyle business online. Now I'm strongly considering building a highly scaleable product if I can convince folks to believe in my idea.
3) You take your finances incredibly seriously.
Given you have a truncated amount of time to build your nut, you hustle much harder. For example, given I wanted to exit Corporate America by 40, I forced myself to save as much as possible. Then I focused on building multiple income streams in order to cover another 20+ years just in case I didn't die by 60!
Contrast this mindset with those who spend all their money and think Social Security will take care of them, or at least pay for a lot of their expenses in retirement. If you rely on a safety net to take care of you, you will not grind as hard.
4) You find your “enough” much sooner than others.
The people who are happiest are those who are satisfied with what they have. They've quit the pursuit of always making maximum money for something more meaningful. Some of the wealthiest people with F You Money are also some of the unhappiest because they feel there's always one more dollar to earn.
The finance industry is a breeding ground for people who just can't make enough money. This is even though they make more than the vast majority of workers. Changing your mortality outlook makes you discover the minimum amount you need to be happy. This is the exact opposite of most people who are constantly trying to find the maximum amount.
Deciding On When You Think You Will Die To Help You Retire By A Certain Age
Deciding which early age to die in order to motivate yourself to live more freely is your own personal choice. However, if you want a rational way to decide when to retire based on money, you can follow my Investment Threshold Ratio. Once you reach this ratio, work becomes optional.
Below is the Investment Threshold Ratio formula followed by an example.
I decided on age 60 for three reasons:
1) For the one week before turning 30, I was depressed. I never experienced such sadness before. Everything hit me at once. Like my 20s being over, thinking what my friends who died early would be like now, how my parents were growing older, and how work was becoming less fulfilling. I made it my goal to live the second 30 years of my life with maximum joy.
2) When anchorman Peter Jennings died in 2005 at the age of 67 from lung cancer, I had just turned 28. It was shocking to see someone I saw daily on TV die so young. He seemed absolutely normal until he one day disappeared. This was much like how Stuart Scott from ESPN seemed normal until he passed away. The more young folks I saw die, the more I wanted to hurry up and live on my terms.
3) I didn't want to live my life with regret. After passing up a great entrepreneurial opportunity in China for the more stable route, I was already questioning whether I made the right move. Then September 11 happened, questioning the whole point of trying to make more money from money. Surely, there must be something more rewarding to do for the short time we're here. It took another 11 years to leave, but I'm so glad I finally did.
The ideal retirement age is somewhere between 40 – 50. You're wealthy enough to do more of what you want. You're also healthy enough to experience more great adventures. If you do die early, you will have lived a. more fulfilling life if you retired early.
There Will Likely Be Upside If You Shoot To Retire At A Certain Age
Some are asking what if it's just not possible to retire by a certain age? Then I encourage you to finally find that job you've always wanted to do, but were too afraid to pursue. Forget about the lower pay, strange location, or whatever reason. Go and make it happen!
I knew that leaving banking at age 34 would mean taking a huge pay cut. But who cares if I've mentally only got 26 years left? I was able to pursue international travel, write a bestselling book with a top publisher, and have two kids. While I was working, I was too stressed to do any of those things!
Shooting to retire by a certain age, no matter whether you've achieved your financial goal or not is a great way to hedge against disappointment. For those of you who diligently save and invest your money, I've got no doubt you'll end up with too much money, rather than too little.
For every year you live past your death date, you'll appreciate the time even more! That is the power of positive thinking.
The next time you are running your retirement calculations, choose age as the most important variable. You can always earn supplemental retirement income in retirement. But you can never buy another minute of time!
Related posts to retiring:
Retiring Under A Democratic President May Be A Great Idea
The Best Reason To Retire Earlier: Years Of Greater Happiness
Wealth Building Recommendation
If you're looking for a free tool to help manage your finances, check out Empower. You can run your financials through their Retirement Calculator, track your net worth, x-ray your portfolio for excessive fees, and most importantly, use the software to come up with a financial plan.
Those who track their finances generate 70% more wealth than those who don't. I've used Empower since 2012 and have seen my net worth sky rocket since. It's the best free financial app out there to manage your money.
Still Believe In Retiring By A Certain Age
Now that I'm 46 with two young children, I no longer want to die at 60! Given I retired in 2012, my goal is to live at least until both my kids are adults. In other words, I'd like to live until at least 70, if not 90.
Further, I do believe the ideal age to retire is 45, not 34 when I did. At 45, you will have worked for 20-27 years after high school or college. That's enough time to save and invest. Further, you're young enough to still do whatever you want in life.
Both my kids are going to be in school full-time starting in September 2024. As a result, I have a void to fill by doing some part-time consulting. 20 hours a week of part-time consulting is a great balance. This just goes to show that once you retire by a certain age, you can always go back to do work.
Get Affordable Life Insurance ASAP
Speaking of mortality and retiring by a certain age, please get life insurance. If you do, you will feel a tremendous sense of relief, especially if you have debt and dependents.
During the pandemic, I got a new affordable 20-year term life insurance policy with Policygenius, thank goodness. Getting a life insurance policy to cover my children until they turn adults is huge. Further, I'm also exercising more, eating healthier, and getting my estate organized for succession.
Another thing to think about for early retirees is how to plan for a long retirement with lower return assumptions. For the next 10 years, Vanguard came out with stock and bond assumptions that are 60% lower than the previous 10 years. As a result, it's prudent to lower your safe withdrawal rate.
Retire by a certain age so you can live your best life. Stop wasting time! You will regret more of the things you don't do than the things you try.
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This article reminded me of how difficult it can be to balance all the aspects of our lives that we want to develop. I’m grateful that, using the internet and building drop-ship ecommerce businesses, my wife and I were able to get off to a great start by working hard and smart before the kids came along.
It seems like if a person is willing to create an intelligent plan for earning and saving money, execute the plan, and go with contingencies whenever necessary, you can be ready to retire early and to spend the time you should with your loved ones and pursuing other interests outside of work.
This article just motivated me. That chart inspired me. Currently, I’m 22 years old and I have no income. But at the end of this year, I want to income that much money which is quite impossible. But I will try my best. Thanks for this article. I don’t want to die in regrets. I will try my best to live my life to the fullest.
Great thought-provoking post! At my job, we’ve had three people die in car crashes this year alone, and another one happened last year. It’s been very sad, and eye-opening to say the least. We all (should) know that driving is one of the biggest hazards in life as more than 100 Americans die in crashes each day, but when it started happening to people I actually knew this year it made me reflect on many of the things you just posted about. I also remember Peter Jennings dying, he was in our living room every night growing up.
After all, no one’s ever said “I wish I would have spent more time at the office” on their deathbed.
This is by far my favorite article on your site. I am still working on finding balance between family, work, money, and my ambitions for all of those things.
Sam I can’t say enough good things about you and your body of work. I wanted to personally thank you for sharing your knowledge with the personal finance community. I’ve reflected on life and death and came to a conclusion I’m sure many have come to before me and that is without death life has no meaning. It’s an amazing thing, but if we lived forever there wouldn’t be consequences and i suspect nihilism would set in. The interesting thing about human beings is that we have material needs and spiritual needs, but these needs can contradict each other. For example, the stoic philosopher who rejects materialism chooses to live in poverty because material life distracts him. His exclusive focus on the spiritual side of life inhabits him from making further contributions to humanity. On the other end of the spectrum is the archetypal Wall Street CEO who is wealthy beyond imagination, but spiritually dead because focusing on spirituality does not have an objective ROI. The point I’m making is that we have to strive to be whole human beings who can master the spiritual and the material realms in order to fulfill our potential and contribute to mankind.
Sam, this article immediately resonated me. I think the first time I read it was a while ago now. My mother-in-law passed away at age 60 and her health wasn’t so good before that (4 year battle with cancer and other issues). Luckily my mother-in-law was well off and did get to enjoy her life. I also assume we will die at age 60 which is why I’m aiming for financial independence by 40, and then who knows what we’ll try. :)
Sorry to hear about your mother in law Sarah. With George Michael dying at 53, Prince dying at 57, and now Carrie Fisher dying at 60, I certainly am under NO ILLUSION that I could be gone by 60 either.
Retiring early is definitely a great hedge on an early death. Hope you achieve your goals!
See: The Fear Of Running Out Of Money In Retirement Is Overblown
I love the different perspective! I still need a certain amount to make sur I’ll be at least safe, but it’s refreshing to see it as an age rather than an amount!
So, realistically, what is the age to shoot to retire by? I’d love nothing more than to “retire” right now and spend the rest of my life fulfilling my bucket list, but there is a ~ 90% chance I’d run out of money before I die if I did that. And 60 seems young to me – my parents just turned 60 and they have really fun and fulfilling lives (80+ ski days, still working some, traveling a lot).
This is hilariously timely because I was just writing a post about these same five regrets! I’ll reference this. I agree completely. I attended my Grandfather’s funeral this weekend, and while he was 87, he didn’t retire until 73 and still went to the office every day until a few years before his death. I think that’s the way he liked it, but I don’t want to do that!
Also, Ta Prohm is one of my favorite all-time places. I love Cambodia.
I like this approach and philosophy. One challenging part is factoring in health ‘surprises.’ My family has great longevity, good genes, and I’ve always lived a healthy lifestyle. Consequently, I figured I’d like to 85 at least, maybe 90+. Nonetheless, in my 50s I learned that I have, inexplicably, a severe illness that very likely will shorten my life, perhaps by decades. The ‘numbers’ would have suggested that I aim to retire in my 60s. Now I’m very glad I took a different approach, which was to get to the point asap where our nest egg is sufficient to sustain us, along with part-time work. We reached that financial point when I was in my mid-40s, and boy am I glad! :)
That “5 regrets of the dying” is really thought provoking. I’ve read it before, but it’s always nice to see it again. It reminds me why I’m pursuing financial independence.
I like the idea of setting a retirement age, rather than a number, but it sort of scares the hell out of me. I’m shooting for finishing up at 40 (I’m currently 30), and I’m reasonably confident that I’ll hit my numbers, but I’d have to think long and hard about shifting gears if I get to 40 and don’t have “my number” saved up.
I also like the idea of setting your own expiration date early. Almost no one lives to the average age. That’s the nature of averages, most people will longer or shorter than the average. Setting your date early gives you the best chance of actually enjoying your well made plans. Thanks for the article.
With 10 years left to go, I’m pretty sure you are going to make it MUCH FARTHER by 40 than if you hadn’t set that goal. And to help you walk away from Corporate America or finally pursue that different career that may be more interesting but doesn’t pay as well, thinking about only have a shorter life expectancy than the median 78 will help you make that change.
Most people I’ve talked to do NOT regret going after something more congruent with their interests after working and saving for 15-20 years after school. So many have told me how they wished they’d pursued their dreams SOONER!
Hey, sorry for the double comment! I thought the first one got deleted/didn’t go through.
And you’re certainly right: it’s the things you don’t do that will likely haunt you. I’ve been thinking recently about different ways to tweak our current lifestyle to move up our FI date with a combination of part time work and rental income. We’ll see if I actually end up doing either. It will probably depend on how the job is feeling in about 5 years :)
I’ve often thought about that list of “5 regrets of the dying” while on my way to financial independence. In particular, working less and keeping in touch with friends. This was an interesting read. The idea of setting your retirement age vs your number is appealing, but scary to me. Right now I’m shooting for 40 (currently 30), and feel like I can make my goals, but if not I guess I’ll have to reassess whether or not to pull the plug when I get there.
I also like the mental trick of setting your own expiration date early. A lot of people fall into the fallacy of thinking they will live to the average life expectancy. But the nature of averages is that many people live shorter lives and many live longer ones. It’s important to realize you may never reap the rewards of your hard work if you wait until the “perfect moment.” Thanks for the thought provoking article.
This was a difficult post for me to read this morning. I just returned from maternity leave to my stressful, full-time job. While I worry about missing my “children’s youth,” our financial situation prevents me from leaving right now. We are working towards a type of “semi-retirement” in 2022, when my husband and I turn 40 (going for age not a figure). This goal is keeping me focused on what needs to be done so we can live a more meaningful life. I am, however, extremely thankful for the ability to realize that there are better priorities than a corner office, long before my deathbed.
Thank you for this post FS. My dad gave me this message loud and clear when he passed away suddenly at age 47. Focusing on freedom sooner than later is definitely the most powerful lesson we can bestow on others.
Wow,
I’m actually really surprised to see those poll results for when folks reasonably think they’ll be able to retire. I would have guessed that in this early retirement blog (or at least directed that way), that most people would be looking at far earlier retirement ages, like late 30’s early 40’s.
Eric
I’m not so sure I’d classify FS as an “early retirement blog.” I would characterize FS more as a “Wealth Maximization, Financial Freedom Blog.”
There’s so much more to life after early retirement. I think we’re way past ER by now b/c we realize there’s lots of incredible other things to do.
I always find myself wondering what age I will retire and I just cant seem to put a number on it because I cant predict how fast I will be able to build my passive income stream. For me, I will retire when Im generating enough passive income to be able to live off of.
Hopefully I will be set no later then 50 but Im hoping I can retire in my late 40s. Im in my mid thirties now but I am on an aggressive path to build passive income.
Only time will tell I guess.
Sam,
Casual reader of your blog for a few years. I’m in a camp of saving like mad as soon as one can start. If you’ve water skied before, it’s difficult to get up out of the water, some people can’t. If you understand the technique and can put forth the effort you can do it. And once you’re out of the water, it’s much less effort and that’s where the fun begins. I’m in your 30-35 retire category and 70 would seem for me to be a long, healthy life.
I think that idea of ‘striving’ for an early retirement date is the right one. It can be hard to balance enjoying life now vs later when you’re imagining dying relatively early, but the frequent reminder of that striving can really remind you to appreciate what you have already no matter where you’re at vs your goals, and the fact that your time is limited.
This was a great post! I’m currently in another state away from everyone I love, mid20s and making 70k. I’m aggressively saving, and last year lived on around 15k, but now I’m starting to ask myself what is the point if you are not enjoying yourself with the people you love. But like you said one never knows what opportunities might appear and how your live may change. So hanging on tight haha. Thanks for this.
Probably one of the best posts I’ve ever read about personal finance and the importance of living your life instead of working.
I’ve never set myself a mortality age, but I’m aiming for a retirement age between 35 and 40. What I would do upon retirement is still a mystery to me, but I know what I WOULDN’T do. I, a banker like yourself, wouldn’t spend my life stressing about rude customers, quarterly audits, sales quotas, my morning commute, keeping clients happy, understanding the ins and outs of every commercial customer’s business, and so on. I don’t want to be doing all this until 65 only for my body to start shutting down on me at 70.
So while I don’t know EXACTLY what I would want to do, I know exactly what I want to avoid. It’s all a matter of getting there. Dividend stocks, my 401k, blogging income (whenever that materializes), and a frugal lifestyle are all my ticket to freedom from work and to a life free of stress. I think the freedom from stress is what I want more than ANYTHING else.
Awesome post! I just discovered this blog the other day and am blown away. I’ll have to go through your past content soon.
Live well!
Sincerely,
ARB–Angry Retail Banker
35 – 40 is a great age. How old are you now?
Glad you discovered my site. I thought in 2009 it would be a novel idea to write about personal finance given my background in finance. At the time, literally nobody from finance was writing about personal finance!
How did you first discover my site? I’m always curious to know.
I’m 30. Unfortunately, it’s tough to say how attainable that goal is, as I live in an expensive city and would likely have to move. That age range is what I’m aiming for, rather than what I’m predicting. But I decided over a year ago that I was going all out with earning passive income and saving money, hoping if not to retire early, then at least to be able to reduce my stress levels and/or work hours.
I had heard of your site before (just the name) here and there, but your article title “Why You Should Work A Minimum Wage Job” showed up under your comment on My Money Design’s recent Niche Site update. Gotta love CommentLuv.
Sincerely,
ARB–Angry Retail Banker
Interesting article. It’s always tough what exactly people mean by retirement. From one definition, you plan to retire at 60, by another definition you retired in 2012. It’s quite an overloaded term, such that it’s not surprising everyone has an opinion on retirement articles.
Hi Sam,
I’m a long time reader of your blog.
This topic is one that I tend to struggle with. As I accumulate more and more wealth, I still feel very uncomfortable not having a job. In fact, when I recently changed jobs, the weekend between when the last job ended and the new job began was torture. Silly, right! I think I’m just too focused on the worth I feel from working. The nurse’s words will certainly ring true for everyone, and I need to wrap my head around that.
I have been lurking for more than a year since I followed a random link to Financial Samurai from JD Roth’s GRS. Sam’s post seems like a fundamental truth. Call your friends. Call your Mom. Call anyone you care about. Tell them they are special. In the meantime…save like a maniac and maybe you can afford to spend more time with the people you love before some dude is shoveling dirt on you.
Hi Sam,
With maturity, comes the need to see whats important, when death is certain.
Buddha, Christ, Eastern philosophies.
Ultimately, the timeless questions – Who am I? Whats my purpose?
Put another way – A Gautam Buddha, or a Gandhi, or a Jesus – did not plan “financially”.
IMHO, money is a medium.
Not happiness.
Regards,
A curious above the average millionaire (I hate to call myself such!)
I am sad to see close to 50% of people are thinking of retiring after 55. I wish we live in a society where people can retire before 50 and enjoy the world fully without worrying about jobs.