So You Want to Retire Early?

I must be mentally unstable.  At least I think that once in a while.  Why?  I’m become rather over focused most of the time on reducing my spending and saving so I can retire as soon as possible.   What is interesting about all this reading and discussing about early retirement is when people ask for my thoughts on how they can retire early.

So far I think most people give me funny looks when I talk about early retirement.  Why?  Because in the beginning early retirement has nothing to do with money.  Yes, you can go back and reread that last sentence and yes I’m still serious.

So what the hell am I talking about?  Well simply put it is this.  In the very start of your dream for retiring your first goal is to determine what do you want to do in retirement.  What is your dream?  Is it owning a cabin in the woods and fishing or spending the winters in a warmer country or RVing across North America?   This is the fun part of early retirement planning.  Forget the money and just dream.  What can you see yourself doing for the next 30 years or more of your retirement?  The more details you can give the better off you will be.

Now inject some reality.  Look at the costs and do some research.  Try to estimate your living costs in your dream lifestyle and then if the number comes up too high.  Find ways to reduce costs.  Do you really need $20,000/year for vacations or can you get by with $5000 or even $3000 per year?  Do you have to live in the woods with a 3000 sq ft house or can you get by with 1500 sq ft? Basically you want your dream to exist in a realistic form.

Then the next steps are fairly simple:

  1. Start saving.  It doesn’t matter how much, but start NOW.  Not next week or at your next raise, but even just $25 a paycheque.  Start saving NOW and make it a habit.
  2. Reduce your costs.  The idea here is to find ways to reduce any and all costs.  The dollar value doesn’t matter.  It’s just important to start working on it.  Save $5/month here and $25 there and put all your savings towards your early retirement fund.
  3. Question yourself.  Every time you spend money ask yourself, do I really need this?  Could you make do with something else?  Can you get it cheaper?  Do I even need this thing at all or can I use something else I already own?  Make yourself defend why you do things.  Don’t do it because you always have, but ask yourself is this really worth it to me?
  4. Educate yourself.  Learn about investing, taxes and read up on early retirement.  Decide what advice works for you and discard the rest.  This is your retirement no one can tell you what to do, but keep an open mind about learning new things.
  5. Leave your Comfort Zone.  Life is full of risks so don’t just hide behind that refusing to try new things.  Try something new out of your comfort zone and you might learn some interesting things about yourself?  For example, I cut my own hair.  Was it scary? HELL YES!  Did I learn I can do it myself? Just about (I need my wife to trim my neck).  Can you do your own investing?  Or go a month without coffee? Try.  You never know until you try.
  6. Repeat.  Revisit your dream again at least once a year.  Do you still like your idea or do you have a better one?  Have you found another way to save money?  Retirement planning is a cycle.  You keep working around that wheel getting a better and clearer picture of things as you go.  You don’t have to make it a fun time job, but you should at least spend a little time each year on it.

Well that’s my basic guide.  If you’ve got a suggestion for another step please share.

7 thoughts on “So You Want to Retire Early?”

  1. Nice posts!
    I completely agree with your ‘basic guide’ to early retirement and I too am on the path to retire early – maybe?!

    The only point I would add is, *revisit your dream more often, even daily.

    It is far too easy to become side-tracked by the gloss of our society. Unless you have the constitution of the Dalai Lama, you may break.

    I have the utmost respect for those average Canadians who stick to their plan and reap the rewards.

  2. Way to go on cutting your own hair:) Applause.

    Another way to think about “retirement” is: if that’s what one really wants to do (x, y, z) — then what’s stopping one from doing that right now?

    There’s a lot of utopian talk about retirement. It’s a box into which we place our biggest desires, hopes, the perfect situation, etc. But I often think: well if that’s what I know I want to be doing anyway, why shouldn’t I already be doing that now? If my parents spent their whole life planning future travels, and I want to do that, why should I wait?

    Of course, something called money gets in the way; that’s part of the challenge. But for me that’s where cashflow comes in. … just my two cents when I start thinking about this.

  3. I’m with you on the hair cutting thing. I still go fora professional cut every 3 months, but stretched it out from every 6-weeks by cleaning it up a bit between cuts myself (like cutting the bangs out of my eyes!)

    On another note, I’ve tagged you with a meme–a 6-word memoir. I think you will be very good at this one.

  4. I can imagine many things i would do in ‘retirement’. I bore friends and family to death with all my saving/investing ideas.

    While i like the idea of retirement i just like the ability to choose and not be forced into freedom 75!

    My wife and i struggle with this. She doesn’t see much past her nose with her financial plans and savings wasn’t in her vocabulary until i showed up.

    We need to see a money counsellor (investment advisor) to find a happy medium. Anyone else have this spousal problem?


  5. I recently paid $17 for a haircut, so that’s something I should try. Like Syd, I tend to minimize the NUMBER of cuts, instead of the price per cut.

    I’d add “wisely deploy savings” somewhere in there. Saving is DEFINITELY more important, but if your savings are in a checking account, you’ve got a massive battle against inflation en route and during retirement. (maybe this is part of #4)

  6. Mr. Cheap,

    Good point. How you deploy your saving matter in the long haul, but it isn’t as critical when you first start out.


    Ouch, not a nice problem to have, but I can somewhat relate. My wife was bulky didn’t care for the longest while but still let me play with things as long as our lifestyle didn’t change all that much. Now she is into it. What changed? I took off 6 weeks after our last kid was born and she LOVED the help. So I sold her on the idea of me being around more often in early retirement.

    Selling the idea of early retirement means selling the benefits that would appeal most to your wife. Most people aren’t used to delayed gratification so it takes some talking to get the spouse on board sometimes.

    Best of luck,

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