Early Retirement is the Wrong Goal

A more in-depth talking head version of this article is available on YouTube (view below). 

I chased early retirement for almost two decades. My early retirement goal made me a disciplined saver and investor, but I wholeheartedly believe early retirement is the wrong goal. 

This is humbling to write.

In this article, I’ll provide three alternative goals to set that are better than early retirement and explain why. 

But first, my early retirement story — I set a goal to retire at age 55 in 2003, one year earlier than my Dad’s retirement age after a 35-year teaching career. 

I was 27 and had just finished a 14-month backpacking trip in Asia and Latin America, and I wanted to retire early so I could travel the world full-time again.

But I had some life milestones to accomplish before traveling again. They included: 

• Marrying
• Raising a family
• Saving enough to pay for college
• Building a substantial net egg to support a few decades of retirement travel and expenses 

I figured it would take me about 28 years to accomplish these goals before retiring (a convenient number, 55 minus 27). 

The plan was simple: I would return to my previous IT career, live frugally, and save and invest my way to early retirement. This was the path of least resistance, or so I thought. 

But two limiting beliefs prevented me from seeing beyond that plan.

1. Work and enjoyment were incompatible — I didn’t see the possibility of enjoying work or finding fulfillment in a career. I only saw a time for money exchange. A career should be tolerable, not purposeful.
2. My education level and skill set had an income ceiling — Combined with only moderate ambition, I didn’t see a path to great wealth throughout my career. I only saw a steady paycheck that was enough to live comfortably with a family and reach my early retirement goal. 

Armed with a healthy salary, frugal habits, and investment knowledge, I set out to accomplish something ordinary: to work in a tolerable career and retire from it by an arbitrary future date. 

Fulfillment Gap

Nearly a decade after putting this plan in motion, something was missing.

I made good money and was on my way to reaching my financial retirement goal.

Day-to-day, my career was OK. But spending 50+ hours a week exchanging time for money year after year felt hollow.

Work was challenging and I always had positive and engaged colleagues. But many projects I worked on were so large that one person couldn’t move the needle of success.

The results of my work often seemed inconsequential.

My passion has always been in investing and personal finance. Stock investing became my mental escape. I found professional-like satisfaction in investing, making up for the fulfillment gap in my career.

Around 2006, I considered changing careers to become a fee-only financial planner.

But I simultaneously bought an overpriced condo, and the high mortgage payment became a financial burden, preventing me from leaping into a new career. 

Buying the condo locked me into my IT career, stealing the flexibility to pursue something else.

Switching careers might have plugged the professional fulfillment gap, but I squandered my opportunity. 

Creative Outlet

My interest in personal finance and investing led to several dividend blogs around 2011-2012.

I found a community of other people in a similar phase of life, working unfulfilling careers and building investment portfolios to escape the 9-to-5.

Then in 2013, my wife left her career to be a stay-at-home parent.

Inspired by other bloggers, I started RBD anonymously as both a creative outlet and a low-risk attempt to replace her income. 

The blog led to connecting with other online content creators, opening my eyes to various business models.

Soon, I started making small amounts of money doing work I enjoyed. 

As my business grew over the next five years, my day job started to feel more like a burden, holding me back from pursuing a career I genuinely enjoyed. 

Restrained by the golden handcuffs — a comfortable job and excellent benefits, I struggled with the decision to leave my career for years, complicated by the pandemic and healthcare realities due to a family diagnosis.

But in late 2022 at age 47, I finally left my IT career to become a full-time online content creator, nine years after I started writing online. 

Had I stayed in my career for another eight years to age 55, I would likely have met my early retirement goal with room to spare.

Instead, a funny thing happened: when I committed to the career I genuinely enjoyed, I lost the desire to retire early. 

Alternatives to an Early Retirement Goal

My early retirement goal positively affected my saving, spending, and investing habits. Without setting it, I’d be less wealthy today.

In hindsight, the three goals I highlight below may better serve people interested in early retirement because of career fatigue or because they chose the wrong career decades ago.

These ideas are not one-size-fits-all. We have unique situations, and our career trajectories and fulfillment needs change at various career stages.

If you’re stuck, these alternatives may get you thinking about what’s possible instead of accepting the status quo for the rest of your career. 

Find a career from which you do not want to retire

This would have been a better goal for the 27-year-old me. Had I experimented with different jobs or careers when I had the flexibility, I may have found a more compelling profession. 

Instead, I took the safe route. 

We tend to accept our skill sets are limited to whatever profession we start in. Our experience is our advantage, and advantages generally lead to greater earning potential. 

But competent people with a strong work ethic who care about their careers can find new or tangent opportunities in many places. 

If you don’t like your job, find ways to pivot to something better. Look for alternatives near and far from what you’re current situation:

• Try a smaller company or larger company
• Explore public sector vs. private jobs
• Experiment with in-person vs. remote
• Consider self-employment (consulting, starting a business)
• Switch careers entirely

We get complacent. But some of us wake up one day wondering why we spend so much time doing something we don’t like.

The golden handcuffs and financial necessity make us feel stuck.

For years, I believed my employer overpaid me, and I couldn’t earn the same amount elsewhere. That mindset was flawed and kept me in a mediocre company with limited personal growth opportunities for 14 years.

I was complacent and found excuses not to look for something better. When I finally dared to explore something else, a financial mistake (the condo) made it untenable. 

The younger we prioritize career fulfillment over money, the better. I wish I had this attitude at 27 before I had a family. 

Even if you’re fifty and over, there may be opportunities to find something new. I’m not talking about teaching an old dog new tricks.

Older workers have skills that can cross over to various jobs. If you look hard enough, you can pivot into something you enjoy.

However, as we earn more money, we too frequently make financial decisions that lock us into needing certain salary levels to pay for our lifestyles — big mortgages, private schools, car payments, kids activities, club memberships, or whatever.

Those lifestyle choices can become a career trap that can take years to reverse.

An undesirable career funding an inflated lifestyle is the recipe for a mid-life crisis. 

Accelerated Retirement or Semi-Retirement

Accelerated retirement is when we can see the light at the end of the tunnel — maybe 5 or 7 years away from traditional retirement — but we may be able to bump up our retirement date.

Let’s say you have a decent amount of retirement savings, but not enough. Yet, you can’t bear the thought of working another 5 years where you are today.

This is where doing some calculations can help determine viable options. 

• Do you have enough to retire already? Have you run the numbers?
• What if you could earn a lower salary and work longer but love what you do?
• Can you stay in the same career but reduce hours?
• What reduced spending opportunities could help bump up your retirement date?
• Could a passion business pay most of the bills? Maybe not all the bills, but would that tradeoff be worth it?

You might call this semi-retirement or putting one foot out the door. 

Substantial savings, plus some part-time work or business income, may be enough to reach long-term financial goals without suffering through several more years of unfulfilling work.

The thought of switching careers late in life to something more enjoyable may seem unrealistic but don’t ignore the possibility until you’ve put some numbers to it. 

DIY retirement planning tools like Boldin and ProjectionLab can help us make informed decisions about whether we have enough money to retire.

These tools can give us the data to support a late career change or accelerated retirement.

Now, if you’re just one or two years away from retirement from a job you hate, and there are financial or benefit incentives to stay, it might be worth sticking it out.

But four, five, or more years of your life may not be worth it. Look for ways to enjoy the journey more instead of waiting to arrive at the destination.

This was me for many years. I was so set on the age 55 goal that I ignored trying to find a calling. 

Eventually, I found writing and online entrepreneurship. Then, I ran the numbers and learned that a new lifestyle was possible. 

If you’re looking for a more concrete financial goal, consider the third alternative goal on this list.

Financial independence

This last item is a familiar refrain. Financial independence is when you have enough wealth or investment income to cover your expenses without working. 

When you’ve reached financial independence, work is optional.

Financial independence can give you the confidence to experiment with new careers or businesses, especially if you still enjoy earning.

There are three ways to determine if you are financially independent:

1. The passive income from investments (usually interest, real estate, and dividends) is more than enough to cover living expenses.
2. Invested assets (excluding primary home equity and 529 savings) equal 25 times annual expenses. For example, if you spend 100,00 per year, you’d need $2.5 million.
3. The third is a combination of both.

The passive income model is generally safer because if you generate that much income, your invested assets are likely higher than 25X annual expenditures.

But this will take longer to achieve and might involve more risk. Real estate rentals can accelerate achieving financial independence this way.

With the second method, you can typically reach financial independence sooner because the threshold is lower. But you’re more susceptible to market fluctuations.

I used my financial independence status to leave my career and focus on earning through business income instead of a salary. This was possible because I had an established side business.

We may not cover all of our monthly expenses compared to when I was employed, but the fulfillment factor makes up for it. Our cash savings and investment income cover the difference when needed. 

The tradeoff is worth it. I enjoy helping people by creating online content and earning money from it. I work from home on my terms, at whatever time of the day or week fits my schedule. 

Now that I focus on my business full-time, I’m not so eager to retire early.

Conclusion

When I left my career in December 2022, I wrote these words:

A Career You Genuinely Love >

Financial Independence >

Traditional Retirement

Two years since, my conviction is stronger.

The early retirement goal still served me well over the years, but aiming for traditional retirement was the wrong goal.

I’m happier and prefer earning longer than retiring earlier now that I’ve found a more fulfilling career.

Video Version

Prefer video? I recorded a video version of this article covering this topic more deeply (about 15 minutes) than the written version.

Featured illustration by ChatGPT image generator.