Do you cringe at the thought of working from 25-65, wasting the best years of your life working for someone else? Clocking in at a job you probably hate,
This isn’t your typical millennial financial planning post. Instead, it’s one that will challenge you to think differently and see if you can create an early retirement for yourself.
Here’s how you can start
Millennial Financial Planning: Why Traditional Retirement is a Scam
Do you ever feel like saving for traditional retirement is one giant scam? Like a carrot being dangled in front of you for your entire working career?
When I worked full-time I always invested 10-20% in my 401K and maxed out a Roth IRA. But I still never liked the idea of waiting until I was 60+ to finally use the money.
I’m not saying you shouldn’t invest for your future, by all means, earn more while you’re young. That way you can take advantage of compound interest.
But I always had a fear…working hard, saving tons, living frugally and retiring at 65 years old. But what happens if you have a freak accident, get hit by a bus and die?
Literally my number one fear in life.
Obviously, this example is incredibly isn’t that realistic but it can happen!
This fear is why I’ve always tried to have a balance of saving for the future while enjoying luxuries of life. I’ve always tried to save while still traveling, crossing off my bucket list and spending time with family.
It’s also a reason I quit my six-figure job to become self-employed, live each day on my terms, and pursue my passions. Aside from my “fear” I still never liked the traditional way of working forever then retiring is a giant scam.
Here are my top reasons and an alternative to help you live life on your terms.
Why Retirement Is a Scam
Do you (and everyone else) want to “retire?” Or, do you just want the freedom to do what you choose with your time? Aka, live life on your terms?
In my opinion, traditional retirement is a scam because it gives you an illusion of a perfect future. The modern system assumes you’ll “work hard” through the best years of your life. Once you’ve saved up you can retire and call it a day?
Unlikely, most people need something to give them a driving force to go through life. Usually, its work but others can find it through giving back, building a business, or caring for your family.
While I encourage saving money and contributing to your 401K and Roth IRA, the main advantage to these is compound interest. This money will be helping your 60-year-old self.
Will Social Security Exist for Our Retirement?
Personally, I’m still convinced social security won’t be around when myself and millions of others reach “retirement age.” If it was possible, I would happily stop contributing to social security and not take a dime in the future.
But this isn’t the case…
Social Security Facts
- Based on the Social Security Administration’s 2015 report, the trust is on track to be depleted in 2034, at which point the system will be able to pay 79% of benefits from ongoing tax revenue.
- According to this article, “The average Social Security retirement benefit is about $1,300 per month ($1,328 in 2015), and the maximum at full retirement age is more than $2,600 per month ($2,663 in 2015).”
Even if social security does exist, will $1,300 have that significant of an impact? Sure it can help pay the bills but it’s not getting you the private island of your dreams.
Will You Have Your Health in Retirement?
As I mentioned, my biggest “retirement” fear is getting hit by a bus and thus, ruining my “retirement plan.” My second biggest fear is not having my health. Millions of people don’t take care of their body and end up in poor health by their late 50’s or early 60’s.
But at 60 years old you’re supposed to retire, travel, and cross off the bucket list right?
I have a feeling hiking Mt. Fuji, backpacking through Europe or whatever else is on your bucket list won’t be as easy at 65. Even if you have good health it probably won’t be as enjoyable as doing at 35 or 40 years old.
Traditional retirement makes it seem like you’ll be as healthy as you are at 65 as you were at 30. We know that’s not the case!
That’s why I recommend in my book to start your fitness habits early so you can give yourself the best chance of being healthy later in life.
What Will You Do in Retirement?
Let’s say you get to 65 years old, retire healthy and don’t get taken out by the “bus.” What will you do with your time? Do you have a hobby now that you can do at that age?
If you do have a hobby that “older people” can enjoy, why aren’t you doing it now? I love golf, a sport you can play as long as you want. I just read about a 103-year-old still trying to conquer this dumb game.
I’ve read (and seen) too many people getting older, retiring, and being bored out of their mind. Besides driving their significant other crazy they lack a purpose since they don’t have “work.”
That’s why business leaders like Warren Buffett (age 87), Richard Branson (age 67) or Bill Gates (age 62) have no “retirement plans.” They will keep doing what they love until the day they die.
The reason all three of these leaders are successful is that they found their passion early in life.
Of course, we all don’t find our passions as early as them but it’s important to do what you love. If you can find your passion earlier than later in life you can switch from traditional retirement to something else.
Instead of getting to the point of driving your spouse mad or trying to play golf when you hate it there is an alternative.
The Solution: Partial Retirement
The solution, in my opinion, is “partial retirement.”
For some reason, retirement is an all or nothing event.
Think about it. All of a sudden around 60 years old you’re supposed to just stop working, play golf or racquetball, maybe travel and start napping. It’s such a sudden transition.
Instead of the traditional model, I recommend working and saving until you can find a way to create your own partial retirement. Think of it being 35 -45 years old. By thinking of “retiring” sooner you will do the following:
I think this is one reason it’s hard for young adults to save for the future. It seems like it’s so far away it’s easy to not save and invest.
But with this model instead of thinking your retirement is 30 or 40 years it’s really only 10 or 20 years away. This should be motivation to start investing more, saving more, and earning more.
I’ve been self-employed for the past month making money here and there. Nothing compared to my six-figure job (yet). I realized my quality of life hasn’t changed but my spending has dramatically decreased.
Amazon probably thinks I got hit by that bus early. When you have a steady paycheck and don’t plan on retiring until 65 it’s easy to save 10-15% and then spend the rest. People, my previous self-included, justify that you’re already saving more than most and need to enjoy life.
But working all the time at a job you don’t love can lead to pointless spending. But if you’re planning your partial retirement you’ll be able to ask yourself if you really need to purchase more on Amazon. Instead, you’ll think about how you could use that money in your future!
Find Your Passions
While you’re employed and getting your steady paycheck, a good way to use extra money is to find what you are passionate about. Spend money on anything you might be interested in. It could be classes, online courses, seminars or anything you’re interested in.
In early 2015 I started trying new things to find out what I really loved doing. I went to acting classes, went to a Tony Robbins seminar, traveled, and started writing a book.
I did as much as I could to find out what I really love doing. The acting classes were hilarious looking back, but a good experience. Tony Robbins seminar was life changing and I ended up publishing my first book at 29 years old.
And in 2016 I started this blog. I was passionate about helping people with finances and determined to help. I have loved the experience of writing, understanding online businesses, and meeting successful people.
This is the time to pursue anything you’re passionate about. Start a photography business, make money traveling, or become an author. Check out 11 Proven Side Hustles for more ideas.
There are endless ways to find your passions, start looking and you’ll be amazed at what can happen to your life.
The last part I hate about the traditional retirement is that it makes you sacrifice a lot. At most jobs, you’ll be working 40-60 hours per week. Roughly 30% of your time spent at work, most likely doing something don’t love.
You get to enjoy some weeknights and live for the weekends. Sound familiar?
But if you partially retire you can enjoy life every day. You don’t have to worry about the Sunday scares.
You’ll also get to make fewer sacrifices. You won’t have to miss family events or fun trips with friends because you can’t get time off. Partial retirement lets you enjoy every single day, not just the weekends.
I work sometimes on nights and weekends but I love it. It’s on my schedule and doing what I’m passionate about.
Why You Shouldn’t Retire at 65
What do Bill Gates, Warren Buffett, Richard Branson, Mark Zuckerberg and Tony Robbins all have in common?
They all have a tremendous amount of wealth but are still working.
The question is…Why aren’t they retired?
Isn’t that the goal of 99% of people in today’s world? Make a ton of money, retire, kick back on a beach and call it a day?
Why is it that people that are worth hundreds of millions or even billions of dollars, continue to work every single day?
It’s pretty simple — these individuals love what they do.
Tony Robbins loves helping people with his seminars, books, and coaching. Mark Zuckerberg loves to connect the world on Facebook. Warren Buffett loves to invest in companies and build an even stronger business.
So what are you trying to do with your future or your retirement?
Here’s why I think you should strive to do more than just golf and sit on a beach in retirement.
Flip The Script
As I’m sure you’ve realized, I think traditional retirement is a huge scam.
You’re forced to work from 18-65 until you’re finally allowed to withdraw your money from your retirement accounts.
You waste your best years working on someone else’s dream (often overworked), barely manage family, fitness, and sneaking in two weeks of vacation each year.
Sure, your employer will dangle a 401K, insurance, raises, and maybe some stock options but is it worth the stress?
Do you really want to wait until you are 60 or 70 to cross everything off the bucket list?
My question is, would you still work at your current job if you won the lottery?
I would guess no as 80% of people don’t like or hate their job. I’m guessing if you get the golden ticket you’re packing your desk or just never showing up again.
Here is why I agree with Warren Buffett on why your goal shouldn’t be to retire at 65:
With all the new advances humans are living longer than ever.
For example, this Business Insider article showed that in Japan, it used to make sense to retire at 60 or 65 years old as the average lifespan was 68 years old.
As of 2015, the lifespan has increased to 84 in Japan!
I’m not saying you need to stay a job you hate or aren’t passionate about until you are 84….quite the opposite.
Instead, you should work hard in your 20’s, 30’s, or even 40’s to develop your passions.
Live Your Passions
As Warren Buffett said, “I tap dance to work every day.”
He absolutely loves his job and is passionate about his career since he began doing what he loved over 60 years ago!
Granted, he found his passion very early compared to most as he started trading stocks as a teenager. But it’s important to find your passion sooner than later to live a truly fulfilled life.
It really is true, if you love what you’re doing (or at least like it) your days, weeks, months, and years will be much more enjoyable.
As Steve Jobs said, “Your work is going to fill a large part of your life and the only way to be truly satisfied is to do great work. And the only way to do great work is to love what you do.”
Spend some time developing your passions sooner than later to do fulfilling work.
I don’t think many people look back on life regretting that they did what they loved. Here is a great example….
The 92-Year-Old Comedian
I read a great article about Marty Allen, at 92-year-old who was once on the old Ed Sullivan Show and even introduced the Beatles to America.
He still regularly performs stand up comedy in Las Vegas with his wife of 30 years. And a ton else…check it out:
“I don’t see retiring. What do you do? Why would you retire as long as you can walk or walk? I think it slows you down in life. As long as you are able to do things keep doing them. I’m writing a book about my life, I collect art, I do comedy and I’m a reader.”
How cool is this guy!?
Just because you get older doesn’t mean you have to retire at 65 and call it a day.
By following your passions earlier than later in life you will be much more equipped for your future and gain a ton of experience along the way.
When you gain this type of experience you can use it in the future as well by mentoring or coaching others.
Sadly, as people get older a lot of them feel as though society doesn’t have a need for them.
But, in reality, older people have more life experience and can often times provide great insights to people for life and business advice.
When I am older, and hopefully wiser, I hope I will be able to give back to the younger generation with my advice.
One of my ultimate goals is to give an empowering commencement speech (if colleges still exist then) as I’ve seen several that are incredibly powerful.
Take a look at these three:
- Steve Jobs – Stanford Commencement Speech
- Arnold Schwarzenegger – Commencement Speech
- Navy Seal William H McRaven – Commencement Speech
When you get older you can provide a ton of guidance for younger people, help them navigate life’s challenges or volunteer.
I try to not live a life of fear. But, this one fear that made me quit my job and pursue this new path in my life.
While everyone might not share my bus fear I’m sure most people understand regret.
As Gary Vee has said in many clips on Facebook and Youtube, “The number one thing that scares the fuck out of me is regret. You’re gonna sit there at 72 saying ” I wish, I wish. It could be money, it could be more time with your family. Whatever.”
You don’t need to quit your job like me to avoid regret. If you hate your job, have a passion, or are in the right financial circumstance then take the leap.
Regardless of your situation make sure retirement isn’t getting to 65 years old, sitting on a million dollars and then doing your “bucket list.”
Start figuring out how partial retirement can work for you. With the internet, you can accomplish anything. But you’ll never know unless you start trying and finding what you love to do.
Don’t wait until you’re too old to enjoy your hard work. This quote says it all….
“When you’re young you have time and energy but no money. When you get older you have money and energy but no time. And later when you finally have time and money, you no longer have energy.”
Do you have any fears about retiring? Does partial retirement sound better than traditional?
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