I conducted a quick straw poll at my workplace, asking five people “Would you like to retire early?” 100% said yes. Add myself in there and it’s definitely still 100%. Is it a highly unscientific methodology? It certainly is. After all, maybe I just have a very unhappy workplace.
Yet, my rough numbers aren’t worlds apart from a 2017 worldwide Gallup poll that found that 85% of people are disengaged at work. “85% of people hate their jobs,” the headlines wrote. I then asked a quick follow-up question of my work colleagues. “Are you planning to retire early?” None of them said yes, but I am. That’s only 17% – pretty much the reverse of the Gallup poll.
Huh? What gives?
Despite a huge number of people disliking their work, why don’t more people take active steps towards early retirement in order to leave an environment they otherwise hate?
A Lack Of Money
If you look at the averages, the obvious reason why people don’t think they can retire early is that they simply don’t have enough money. Indeed, retirement savings for a normal age retirement (usually between 60-67 depending on your country) are worryingly low.
If you’re struggling to save for regular retirement, it stands to reason that early retirement – as much as it might be the gold standard that most would wish to achieve – is off the cards.
Indeed, if we turn to psychology and look at Maslow’s Hierarchy of Needs, you’ll see that the types of aspirations that you’d normally associate with early retirement such as newfound purpose are at the very top of the pyramid. Early retirement is life’s gravy, not the potatoes. The potatoes keep you alive, but it’s the gravy people really want.
The fact of the matter is that most people are stuck living in the moment, struggling to make ends meet. There are some terribly sad statistics that 40% of Americans can’t afford a $400 financial emergency. In Australia, 25% can’t afford a surprise $1,000 expense.
However, going back to averages, you also see that a lot of people’s incomes go into discretionary expenses. They’re living champagne (and gravy?) lifestyle with a potato budget.
The simple fact is that most people could save far more money if they cut back on unnecessary expenses. Given that it’s technically possible for someone to on even a minimum wage to reach early retirement if they put their mind to it, there’s something else going on.
A Lack Of Patience
As most people have the financial capacity to save far more money than they currently do, the original question this article poses in the headline should be reframed. The question “why don’t more people aim to retire early?” is actually getting ahead of ourselves.
I think it’s reasonable to assume that if people were saving more money, their Hierarchy of Needs would elevate. So instead, the more pressing question ought to be “why don’t people save more money?”
We’ve seen cases where people start a financial journey, only to quit because it’s too hard. Well, not too hard per se, but too long.
Take my wife and I for instance. We lead a very frugal life as we strive towards early retirement before the age of 45. It’s not the frugal living that’s the hard part – it’s the time it’s taking us. It’ll be a good 20+ years of work by the time we expect to retire, and the bulk of that has been while having an early retirement goal.
One of the biggest concerns people have expressed to us about our frugal living is that we might die before we even hit our goals, so why to bother. Wow, harsh. But if people themselves have – or encounter others – with that sort of negative mentality, it’s easy to see why any dreams of early retirement will never get off the ground.
A Lack Of Mentors
If it looks like the odds are now stacked against people retiring early, you’re probably right.
However, it is theoretically possible that even people on the minimum wage can retire early if they dedicate themselves and their finances towards the goal. If someone on the minimum wage could do it, surely others on higher wages could certainly do it with far less effort?
Well, the final straw, when it prevents more people from chasing a dream of early retirement, is that there simply aren’t enough other people doing it. Sure, trust fund babies don’t need to lift a finger their entire lives, and corporate high flyers rake it in. People understand that early retirement is possible.
But unless they see people like them retiring early, they lack mentors. These don’t even need to be literal mentors that guide them individually, but even role models who they can realistically aspire to.
Unless you’re born as a trust fund baby, or incredibly fortunate to have a combination of good luck, aptitude and possibly family connections to help you become a business or political leader, then your odds of being filthy rich are greatly reduced the moment you’re born.
However,the financial independence, retire early (FIRE) movement has helped to normalize the idea of early retirement and reaching financial independence.
FIRE Shines A Path To Early Retirement
There are people from all walks of life – like us – from across the world, earning all sorts of wages, in all sorts of different life situations, all striving to retire early.
The FIRE movement is turning around the notion that early retirement is only possible for the elites of society or the lucky few who stumble into a lottery win. It’s all about saving money and trying to retire early at a level you as an individual or family feel comfortable with.
Obviously, the more you earn, the easier it is to save. But there are all sorts of lengths people go to save money to reach retirement sooner.
So if you ever harboured a dream of retiring early, don’t cast it aside or think it’s all too hard. Others are showing it’s possible if you want it hard enough. The first step is the dream, so come join the early retirement party – there’s nothing more fun than retirement planning!
HisHerMoneyGuide.com is a site dedicated to reaching early retirement, sooner. HisHerMoneyGuide tracks the progress towards early retirement of a young Australian couple who achieved a net worth of more than $2 million by their mid-30s.