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.
Retire By A Certain Age: 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, 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. 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 and build 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.
4) You find your “enough” much sooner than others. The people who are happiest are those who are satisfied with what they have. Some of the wealthiest people 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
Deciding which early age to die in order to motivate yourself to live more freely is your own personal choice.
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.
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?
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:
Wealth Building Recommendation
If you’re looking for a free tool to help manage your finances, check out Personal Capital. 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 Personal Capital since 2012 and have seen my net worth sky rocket since. It’s the best free financial app out there to manage your money.
Update 2021: Now that I’m 44 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.
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.