Immediate retirement – as in, you suddenly and immediately stop working. You pull the plug on work completely and just enjoy our world’s luxuries.
So, how do you do that? How does suddenly retirement work without planning for it?
If you could retire without planning right now and had all the free time you could dream of, what would you do with it?
Retirement Prerequisites – What’s needed?
Retiring doesn’t mean sipping alcohol on the beach, nor does it represent an unproductive member of society. Retiring means retiring from a full-time job into whatever your heart desires.
Retirement means walking away from your main income-generating activities.
It’s rare for anyone to retire 100%. Oftentimes, pre-retirees start dabbling in other ventures to have something to retire into. The worst situation to end up in is having a ton of free time and not knowing how to structure it.
For a person to retire, they must have manageable debt, and a source of income to cover expenses, and they must replace any work-sponsored benefits such as health insurance or life insurance:
- debt that’s easily covered
- low expenses
- access to healthcare
Immediate and Sudden Retirement as a Solution
Let’s say you have $150,000 in your 401k and $20,000 in your savings account. You can get by on this money if you just go crash on a friend’s sofa.
You can get even further if you go rent a cute flat in Mexico. Just unplug and stop working. Tell them you’re sick – forget the 90-day advance notice.
Maybe you don’t want to go to Mexico, and your friend’s sofa has too many sex stains. So, buy a van for $10,000 and go live on BLM land.
The Criteria for a Traditional Retirement
I view retiring as extremely desirable, it’s how I can gain complete control over my time on this planet and do the work I enjoy.
I also enjoy being productive. These two concepts don’t exclude one another. In fact, they complement each other. The best way to leave a toxic work environment is to retire immediately.
Traditional retirement means that we maximize our spending on liabilities during our working years, save the least amount needed (generally 15%), then frantically ramp up our savings rate as we get closer to age 60.
By 55 we scramble for financial advice. Closer to age 65 we work until we drop or call it quits, often with a few health conditions in tow.
The problem with this kind of retirement is that there is very little wiggle room. If the economy tanks or you suddenly burn out or fall ill, you would still have to continue until age 60.
Age 60 is when you access some retirement accounts and might be able to tap into some disability and government-sponsored health insurance.
Following the Crowd in the Retirement Space
It’s been shown in behavioral finance that many of us make financial decisions based on what others in our peer group are doing.
If our neighbor, who is a physician, retires at age 50 then we might do the same. If our colleagues in our medical group all retire at age 69, then we are likely to follow suit.
This extends to the kind of vehicles we purchase, our hobbies, whether we own or rent our homes, etc. It’s not a weakness of character, it’s done because we look at what “works” around us and emulate it.
The problem with such herd effects is that it can put fear and security on the forefront and push our personal preferences down on the list.
This is how people get caught up doing something that isn’t in line with what brings them deep happiness. For those who got caught up in that race unknowingly, an immediate and sudden retirement is my solution.
Cutting Your Overhead By Relocating
What we spend has a lot to do with our lifestyles and where we live. Not just the city but also which State and even which country we live in.
You may not be willing to leave your neighborhood, much less your city, and perhaps never, ever the country you’re living in. But it’s important to perform these mental exercises because there is always something you can learn. And, should shit hit the fan, you know what your options are.
If you were to move from Los Angeles to Cebu in the Philippines, you could cut your lifestyle expenses by 64%.
The website Numbeo shows an average of $5,300/month in LA to $1,905/month in Cebu. The reality is that you can get by on far less.
I wrote this article back in 2017 when I was living in Portland, and now I live in Spain for less than $1,000 a month.
A Drastic Change in Lifestyle Can Make a Huge Difference
You could get rid of your home and your vehicles and get rid of anything that requires disposable batteries. You’ll save an incredible amount of money.
The same holds true if you switch from eating out to only preparing your meals at home. Dining out, restaurant bills, and cafe expenses can add up, probably more so if you have kids.
If you commuted to work by bike or bus, you would have the advantage of having a healthier lifestyle and saving a ton on commuting expenses.
Buying clothes at a thrift store and getting rid of gadgetry is another big way to save. I completely realize this is blasphemous to some of you, but the post’s title is, after all, immediate & sudden retirement.
You could save another massive amount of dough by baking your own bread, growing some of your own veggies, making your own soap, making your own deodorant and moisturizer, using only cloth towels instead of paper towels, and replacing all your cleaning supplies with vinegar or baking soda.
You could homestead and provide damn near everything you need short of staples such as grains. You definitely wouldn’t be the first person to do it.
What to Do With All of The Debt
I think the easiest answer here is to refinance your student loan debt to the lowest rates possible, convert them to the longest period of repayment possible, and apply for any deferment or forbearance that you might qualify for.
In order to retire suddenly, you need to be aggressive and make big moves.
Mortgage debt can be handled by either renting out the place and writing off any losses or selling the property.
You could consider filing for bankruptcy if you have upside-down business debt, credit card debt, or an auto loan. Be warned, most of those who file bankruptcy end up in the same boat a few years later – it’s more of a quick fix and rarely a fix to your financial problems.
Creating Income in Retirement
It’s 2022 when I update this post and, man, I’ve come up with so many ways to make money with my medical education.
From health coaching to consulting to teaching to selling online courses.
There is this idiotic perception that retirement means you cannot generate income. Just hearing that makes me nauseated.
Social security is income, dividends from investments is income, royalties from intellectual property are income, and if you have a business then that’s income as well.
If I rent a 3-bedroom apartment in Cebu, PI, I would pay maybe $600/month. I could get my groceries for around $100 and I could purchase local health insurance for $80/month. Utilities and internet might set me back another $100/month and that’s about the majority of my major expenses.
Total of $880/month.
You can certainly get creative and start your own business wherever you go or teach a foreign language or a particular skill. You can build something to sell or an important item you are familiar with in your home country.
Doctors from the USA have the ability to generate income from various virtual medical practices such my virtual practice. For now, it doesn’t matter where you are located when you perform these services. I expect there will be a major push to limit doctors from “treating” US patients online while living overseas.
How Much Money Do You Need For a Sudden Retirement
Whatever you have is probably enough. There is a place in this world where you money can go a long way. And also where your skills will generate income.
To retire immediately, you just have to be able to walk away. With your $100k from your 401k, you’ll get the runway you need to figure out what to do next.
$100,000 can last you nearly 10 years at the above expense rates. I’m sure that in 10 years you will have enough time to find something you love doing, which might also generate some income.
There is always the annuity option for those who are allergic to investing their money.