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!
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.