One should work until retirement age?

August 1, 2023

One should work until retirement age: The traditional career path isn’t the only way to achieve financial success?

Many people assume they need to work until a traditional retirement age of 65 in order to achieve financial independence. However, the conventional career trajectory of working for decades for the same employer is not the only path to success. With diligent saving, wise investing, and an alternative approach to work, it’s possible for some to reach financial independence and retire much earlier than 65.

Challenging the status quo

The standard advice has long been to save 10-15% of your income, work for 40+ years with the same employer, and retire at 65 when you can start collecting Social Security and 401(k) funds. But this traditional path is being challenged by the FIRE movement – “Financial Independence, Retire Early.”

FIRE aims to achieve financial independence and leave the workforce years earlier than 65. This is accomplished by maximizing savings to 50% or more of income and investing aggressively in assets like stocks, real estate, or passive income streams. Once your investments are earning enough passive income to cover living expenses, you have the freedom to retire early.

It requires sacrifice, but offers rewards

Pursuing early retirement does require sacrifice. It means cutting expenses to the bone, avoiding lifestyle inflation, and spending very little in order to save massive portions of your income. The flip side is having the freedom to leave the workforce decades earlier than your peers.[the_ad id=”3325″]

For example, someone able to save 50% of their income could potentially retire by 40. Even retiring by 55 requires far less savings than trying to retire at 65. Early retirees can enjoy decades of life outside of traditional work, finding fulfillment in passion projects, volunteering, or leisure.

Less about laziness, more about options

Detractors may claim that early retirement is simply an excuse to be lazy. But the FIRE movement is less about never working again and more about flexibility and options.

Many early retirees continue doing work they find meaningful. But they have the freedom to do it on their own terms, without relying on the income. Others may cycle between periods of work and periods of retirement. The point is they have options outside of the rigid, 40-year career path.

Not everyone can do it

Achieving FIRE is certainly not realistic for everyone. It requires a high-paying job that allows saving a large chunk of income. Frugality and discipline are also essential. Someone with lower income or high debt and expenses will have a far more difficult time saving enough to retire early.

But for some willing to make trade-offs, FIRE provides an alternative to the 40-year career grind. Even shaving just 5-10 years off the corporate grind can make a major difference in quality of life and fulfillment.

Take a critical look at the status quo

In summary, the standard path of working full-time until age 65 is not the only way to achieve financial success. For some people willing to make trade-offs, it’s possible to reach financial independence and retire early through aggressive saving and smart investing. While not for everyone, FIRE challenges the status quo and provides an intentional alternative to the 40-year career. It offers the potential for decades of freedom and flexibility.