If you are also in the sphere of personal finance, a common term that is thrown around is #FIRE, which stands for Financial Independence and Retire Early. I’m all for the idea of financial independence. I think that it’s an important goal to aspire to and it keeps me motivated to try and learn new things in the world of personal finance.
Before I dive too deep into this conversation, I would like to state that this is 100% my opinion based on my life choices and experiences. If you are enroute to early retirement, than keep on killing it. This is one of those super personal choices that everyone has to make for themselves and it does not make one person better or worse for it. It’s purely a lifestyle choice. Recently, as I’ve approached the age of starting to talk/save/explore the age of retirement, it seems early retirement is a hot topic which most people leans toward. And I would like to present a different take on it, instead of early retirement; I aspire to a life of continual challenges.
Now there are two parts to this discussion, financial independence and retirement which are two very different things:
By definition, financial independence means:
a state in which an individual or household has sufficient wealth to live on without having to depend on income from some form of employment.
By definition, retirement means:
withdrawal from one’s position or occupation or from active working life
The idea of financial independence is one that I too hope to aspire to, who doesn’t like the idea of passive income? This can come through means such as creating passive products/services or through investments.
That part, I understand. But what is this race to retiring early?
I know this probably sounds naïve, coming from a twenty something millennial, but at this point in my life, early retirement is not something for me.
I think more and more millennials are in a rush. Growing up doesn’t need to be rushed; I aspire to enjoy every moment of it along the way. And that’s why this race to retirement has always been a bit puzzling to me.
Now before we get too far along (because this an thought post in compared to advice post and I could probably write forever), I want to state that early retirement by Canadian and American standards is around 55 years old as the average age of retirement is 65. Then of course there are the stories like the one that really sparked the early retirement debate, where a couple retired at 35 and the media coverage is kind of what inspired this article.
Many people say that retirement can bring them travel, more time with their family, more time with their hobbies, etc. and it’s very true. But there’s a lot more to it than I think is advertised.
I spent 5 years taking long backpacking trips for 4-6 months across Asia, Australia/New Zealand, Africa, and Europe. And I can tell you, it gets a little old after a while. Don’t get me wrong, I absolutely love travel. It was undoubtedly one of the best parts of my life, but I was always traveling with a purpose (finding myself in Asia, studying in Italy, volunteering in Africa) and after I couldn’t find another purpose, I stopped. Travel had always been a getaway from learning, growing and experiencing new things. Most people will tell you that travel will teach you those things, and they definitely do.
But instead of waiting until retirement, I actually think it’s super important to incorporate travel into your whole life. That’s why I think traveling in your twenties is actually very important, because you learn lessons and take on different perspectives that are applicable for the next 60 years. And that kind of perspective and influence on tolerating other cultures, being open-minded and challenging yourself is something that can make a lifetime of difference, not only for yourself, but the world on a whole. Could you imagine a world where people didn’t stereotype ethnic groups based on what they see on the media? Crazy.
Spending more time with your family is of course an appeal to retirement. And even if not with your own kids or partner than spending time with your friends – who doesn’t want that instead of spending your time at a 9-5?
However as someone who has had to work really hard to develop a close relationship with my family, I can tell you that it takes time to build those relationships. Constantly working (and I’ve juggled 2-3 at a time) to strive for early retirement means that events and people get pushed onto the back burner. So even though you may be working towards early retirement to spend time with your family, the relationship may not be what you want in the end. I’m a big believer that relationships take time and trust and they are the most valuable part of life.
Is it worth the sacrifice?
The arguments of travel and family come at the expense of one very important resource that I think early retirement doesn’t account for, and that’s the cost of time. Unless you are in a very unique profession where you can get paid a lot of money with very little work, I think it’s safe to assume that for most people, having to save more for retirement means having to work pretty darn hard for it. A lot of people already struggle to make ends meet and don’t have retirement savings at all, so to make enough money to live and save for early retirement takes a lot of work. Although Money Mustache offers a really great formula for it, there’s a difference between just saving money and being financial independent and actual retirement (i.e. to stop working).
Meaning of Early Retirement
As I was researching this article, I came across a Quora forum where people listed why they either wanted early retirement or why they really love it. And a common response was that they didn’t like their job and couldn’t wait to leave either due to just resenting the workplace or working in a high energy job that they knew they wouldn’t be able to sustain forever such as physical labour.
This struck me because I’ve worked in jobs I don’t like, but instead of sticking with it and complaining until my retirement, I just left. If you’re interested in a great podcast on what to do if you hate your job, I highly recommend this one from Sam Brown of Smart Twenties.
I completely understand that I even though I love the work that I do now, I may not love it forever. I may change my mind or life may change my circumstances. However, when I work in a government organization where the p-word (pension) is a big benefit. In my position, I could retire with a full pension, paid for by my work.
However, if I ever come into the point where I no longer want to work here, I hope I have the courage and conviction to leave instead of just trying to stick it out while being unhappy.
As some of you may know, I went back to school earlier this month (and that’s also the reason this post is up a day or two late!). And as part of the first day, we went around the room to tell everyone why we were pursuing this program. And one person said he was a labour who recently got into a car accident and is now looking to further his education to pursue a supervisor/management role later on.
And that was far more inspiring to me than any article I have read about early retirement. It takes a lot of courage and determination to go back to school when you’re working full-time and with a young family at home. And yes, sometimes life throws curveballs and tests whether or not you will rise to the occasion.
I’m not against saving money for retirement. I’m not against critically analyzing your finances and putting in place the strategies that Mr. Money Mustache proposed, but the idea that we have to race to stop working to create happy or fulfilling lives, to spend time with our families, to travel the world and learn is not something I think is right for me.
I hope that if the day comes, and I’m unhappy with my life or job, I won’t blame external circumstances of my workplace. And that I’ll have the conviction and courage to leave and find a way to live a life in which I’m able to live out some of my passions through my work. Side note: If you’re looking for some further inspiration on this idea, I highly recommend this podcast episode from The Perfectionism Project about what to do when you hate your job.
My Retirement Journey
I think a few key reasons why early retirement doesn’t resonate with comes down to my personality and lifestyle. I think retirement would actually be really boring. I can’t even lie on a beach for more than one hour doing nothing and I could not fathom years of not really doing anything. I understand that’s a very surface level opinion and my opinion might change when I’m 60. One of the key parts of my personal development is always to allow my opinions to change, particularly on opinions about aging (for example having kids).
As I outlined, I know there’s an argument that retirement is not about doing nothing, but I think there’s a time and place in life for it. I’ll probably be happy to retire at 65, but not so much before then. I think having a work routine further motivates me to accomplish more.
My co-worker, who actually came out of retirement to work with our office while it’s busy, actually agrees and says that’s why she came back to work. She accomplishes more in her home and professional life than she did in retirement. She says that a lot of people in retirement say they don’t know how they got so much done before retirement. And I’m the same way, I need something to kick me in the butt and motivate me like work. If you’re self motivated, than that’s super admirable, but I am not. I need a time to wake up or else I’ll just lie in bed for most of the morning and doddle and before I know it, it’s 11pm and I’ve accomplished zero.
And to end in complete irony, as a follow up to my 6 Life Admin Tasks I’ve Been Avoiding post, I finally learned what that paper about my pension my office mailed me months ago means. As a write this post, I am actually set to retire early. Since I started working for the government when I was so young, I can actually retire at 55 with a reduced pension and at 58 with an unreduced pension. Of course, there is incentive to stay longer so I can max out my benefits at 71, but I’ll cross that bridge when I get there.
I love my job now, I actually really enjoy not only the work life balance but I truly believe that people should use their voice to keep their governments accountable. As I’ve grown up and learned that there are a small group of people who create and influence policy. And a lot of times, it’s for their own benefit either economically or to sustain their intolerance of different socioeconomic classes or ethnicities. I will always be advocate for people to get involved in the government and use their voice.
However, there may be a day where I feel that my I longer see working for the government as the right path for me. And in government, the pension benefits are known as the “golden handcuffs” because once you’ve contributed so much, you want to see it to the end. While you always have the option to take your portion out when you leave or to keep it and have a certain amount given when you do retire, you do not get a full pension unless you’ve been with there for an X amount of years and of course, retire in your position. If I decide that one day this isn’t the right path for me, I hope I’m not just begrudgingly showing up to work year after year because I want a full pension. And that’s why I opened up my own RRSP (Registered Retirement Savings Plan) account.
With my government employer pension and my CPP (Canadian Pension Plan) that I’ve automatically had to contribute to since I was 15, I would probably be okay. Not rich, but I would be able to get by. But I’ve opened an RRSP account because I don’t want to be chained to anything. I’m set to retire early with the government, yes. And honestly, it’s not that hard. I’m in no means fearful for my job; I have a great management team and am actually a permanent position so it would actually be very difficult to fire me unless I did something short of illegal. But I have my RRSP as my rebellion account, that one day if I decide to leave, it will be on my terms and I won’t be tied to my job because of a looming pension plan.
Meaning of Early Retirement
I think a big issue with the term early retirement is actually how people define it. The definition of retirement is actually to stop working. So a person who “retires” at 35 and continues on to other types of work/projects that generate income is to me, not retiring. Saving/making enough money to become financially dependent is completely different than retirement in my eyes because of the definition but also because then it becomes all about the money. If you’ve retired early and are not using your time to write a book about it, you’re still working, being a writer is a legitimate profession. And I guess it what it comes down to is that I’ve never been a fan of that kind of optic. To achieve something that is challenging, but not in the true sense for the accolade of it is not something personally that I aspire (and I find equivalent to clickbait).
There are lots of people who could have retired a long time if it was just about money like Mark Zuckerberg or Oprah. I so respect people for venturing off to continually pursue passions and try new things. It’s not easy to change your life down the road, and that flexibility and constant determination in people is what I admire most.
I think retirement will be great one day, but I’m in no rush. One of the greatest gifts I’ve ever given myself is the ability to let myself off the hook of pressuring myself to accomplish things and enjoy every age and phase of my life as it. It’s so easy to read media about the person that retired at 35, or scroll through Instagram and the girl from high school who’s now on Forbe’s 30 under 30 or winning awards left and right I know some people got married far younger than I did, and some people worked to further careers and are not rock stars in their field when I feel like I’m still beginning. And I allow myself not to constantly play comparison game. What’s right for that person at that age, is not But I enjoyed every year of my life as it was. At 21, I was more free, I went out a lot more, had fun with my friends, went to school and traveled the world with very few cares about getting married, figuring out what I career I had to work for the next 40 years, etc. I challenged myself in a lot of different areas because I constantly try to push myself to grow, not to confine
I have the very unpopular opinion of actually liking getting older. I don’t hold on to any age in my life, even when I was 21 and spent 6 months in Europe studying and traveling abroad. That was a wonderful time and I enjoyed every minute of it, but it doesn’t necessarily mean I want to go back; I’ve lived that portion of my life. I learned the lessons that I needed to and I’d rather move on to the next adventure. I don’t look back in my life and think about how I’d rather be there; I look at my life and think of all the things ahead. And that’s the same for getting older. I don’t look at my life and think “I can’t wait to retire.” There’s so many things I want to accomplish in my personal and professional life and when I retire, I want to look back on all the things I accomplished in terms of the relationships I’ve formed, the work I’ve created, and the people I’ve helped.
I truly believe the best is yet to come.
Thanks for following along this rambly post, that I’m not sure made a whole lot of sense.
Let know if you are chasing early retirement or your thoughts below!
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