Why Should You Retire At The Same Age As A Person Making 1/3 of Your Salary?

A person making $40k/yr will retire somewhere around age 65, in the USA. They will own a car, they will likely own a house and they will have health insurance; the basics of living a comfortable life.

Compare this to a person making $150k/yr. At what age do you think this person will retire? 65? 60? 58?

If you make 3x the income of someone who retires in their 60's, shouldn't you be able to retire 3x sooner?

I talk about retirement a lot. I’m damn near obsessed with it. But I don’t view retirement as a moment in life when we stop working. Retirement marks the moment you reach financial independence. You are no longer bound to a job and you are free to do what it is you enjoy doing. You are no longer bound to an alarm clock and you decide what you do with your free time.

Some view retirement as an end-point in life when they have accumulated so much fucking money that they can travel all the time and buy whatever they want. Their mind can only grasp these tangible goals. But have you ever talked to someone who travels all the time? It sucks major ass… the TSA, the lines, the commute to the airport, lugging your shit around. How many destinations are there really? Believe me, you will run out much sooner than you think.

I’ve followed travel bloggers and usually they can go strong for 1, 2 or even 3 years and they all talk about the same thing… travel fatigue. No matter how appealing or fun something is you can only do so much of it before you get diarrhea.

What about buying tons of shit? The fanciest cars, the fanciest clothes and the nicest watches… the most gorgeous house up on a hill with top of the line furniture. Okay, let’s say you saved a lifetime to buy all that shit. Then what? Take yourself to that moment and you are sitting on your ass looking at your gorgeous shit. Soon the car will be a couple of years old, it will have some wear on the leather. The house will start needing some repairs and the furniture that you thought was so chic is now a bit outdated. The thought of buying another car or remodeling your house or buying more furniture at first seems exciting but then you are come over with a dreadful feeling … fuck, a new car means a new dealership to take it to, learning the new controls. A remodel of the house means a shitload of people coming in and out of your home. New furniture means you gotta go shop, take measurements, place orders, wait for delivery, then redecorate the rest of the house to match all that.

If your retirement goal is just accumulating wealth then I am really curious how you determine your final end-point. Is it a dollar amount in the bank? Is it what you think you can afford with it? Or is it because you just don’t have any more fire left in you and you just want to call it quits?

If, instead, retirement is a point of financial independence and freedom then there are only a few things you need. You need enough passive income to cover your minimum overhead. If you spend $2,000/mo then you need $24,000/yr. In the U.S. economy you would need somewhere around $600k invested to make a passive income of $24k/yr.

I have 1,222 days left until retirement. I will need enough income to pay for my housing ($300/mo), groceries ($300/mo), utilities ($100/mo) and healthcare ($400/mo). Beyond that, whatever extra income I need I can either pull from my retirement stash or go pick up a shift at Starbucks, work the front desk somewhere, do some consulting, write articles, tutor a class etc. Shit, I could even go and see patients … okay, maybe not.

With my new-found free time I can go to my local library and read thousands of books for free. I can enjoy the local parks and lounge there with a book and a cup of coffee. I can visit with friends and spend a wonderful time talking about absolutely nothing. I can ride my bike to new destinations for free. I can learn new skills online without paying a dime. And if all fails and I get so bored that I start plucking my own feathers then I can always go back and work a job.

Live a life that you have designed for yourself. The pursuit of it will be just as pleasurable as whatever end-goal you have in mind. The hardest part will be escaping the norm. Others will judge you and they won’t understand why you are doing what you’re doing. I’m writing this because that’s the position I find myself in.