Tag Archives: Early Retirement

Be Intentional

I recently attended a leadership training seminar at a local college.  This seminar was about managing the multi-generational workforce.  The facilitator covered many topics and I am not going to get into any of those details in this post.  He said many interesting things, but the one statement that made me think was that he said that we should always be intentional.

Everything we do should be with intent.  Our actions should have an intended outcome.  Our words should have an intended message.  Even our thoughts should be focused and have a purpose.

The purpose of this training was meant for workforce development.  The message can easily be applied into everyday life.  It is ideal for managing money.

Too many people just coast in life.  They walk around making noise and bumping into things.  By not having a plan, they will just land at a random destination.  What could possibly go wrong with that approach?

To be successful in all your affairs, practice being more intentional.  A great place to start is with how you manage your personal finances.  You should know the why behind everything that you do.

Savings

Do you know what your savings rate is?  You should be able to answer this question without giving it any thought.  Is it 10%, 20%, or more than 30%?  Your savings rate is the most important factor that will determine if you will reach financial independence or not.  It is also one of the rare aspects that you have control over.  Nobody can control what the S&P 500 will return this year, what direction interest rates are headed, or if there will be a spike inflation.  Everyone, however, can control what their saving rate is.

Spending

Your savings rate is directly impacted by your spending.  Do you just spend money without thinking?  Do you go to the mall, outlets, or online and buy things that you do not need?  If you want to change this trend, become intentional with your spending.  Before you buy something, ask yourself if you need it or truly want it?  If you must spend the money, did you shop around for the best price?  Is there a low-cost alternative to making the purchase?  Even if there isn’t a better alternative, at least you did your due diligence and gave thought to the purchase.

Debt

Does your credit card bill arrive, and you cringe when you look at your balance due?  Do you make late payments or just pay the minimum balance on your credit cards?  Do you know what your credit score is?  Do you know what your debt-to-income ratio is and what a healthy ratio should be?  Do you know how to calculate your debt-to-income ratio?  If you want to improve how you manage debt, take a more intentional approach.  Learn what your credit score is, identify if you have too much debt for what your income is, and ultimately establish a plan to get out of debt.

Earnings

I bet you know what your annual salary or hourly wage is?  You get a paycheck every week or bi-weekly, so you are reminded frequently about that rate.  Do you feel that you are underpaid?  Doesn’t everyone?  Maybe you are underpaid or maybe you are overpaid.  Before you ask for a meeting with your supervisor demanding a raise, you should do your homework.  Be intentional and research what the market rate for your position is based on your location and level of experience.  If you are under market rate, you might have a case.  If you are over market rate, but not satisfied, you might need to develop more skills or ask for a more challenging assignment.

Investing

If someone asked you what type of investor you are, could you answer them?  Are you a market timer?  Do you buy and hold equities?  Are you a passive investor who invests in a few different mutual funds?  Do you simply try to capture what the market returns with a total stock market fund?  Do you use value tilts?  Do you buy dividend stocks?  Are you trying to get rich by investing in Bitcoin?  You are free to decide how you invest your money, but you should know the why behind your plan.  Your approach to investing should be intentional.  Nobody knows what the future market returns will be, but you should at least know what you are intending to accomplish with your asset allocation.

Financial Independence

Do you know how much money you need to have in savings to reach financial independence?  To declare financial independence, the general rule is to have 25 years worth of living expenses in savings.  That is based on a 4% withdrawal rate that most financial professionals consider to be acceptable.  Do you know if you have obtained this milestone or how close you are?  Most people who reach financial independence do not get there by accident.  They live intentionally for many years.

Early Retirement

Do you have a target-date as to when you want to retire?  It might be next week, or it might be in 10 years.  If you have an established early retirement date, what are you doing to make that goal a reality?  Are you doing everything you can to maximize your salary and taking on side gigs?  Are you saving until it hurts?  Do you have the right mix of investments to both reach your goal and sleep comfortably at night?  If you do, you are acting in an intentional way.

Conclusion

The nice thing about being intentional is that you can start this process now.  Start by reviewing your current financial situation.  Can you answer why for all your financial decisions?

If you have a financial plan, use it as a guide.  If you do not have a written plan, write one.  That is a good starting point if you want to become intentional.  Review your plan for areas of your financial situation that might need to be amended.

Some fixes are quick, and others require time to implement change.  Moving forward, wherever money is concerned, ask yourself why before you make a final decision.  If you cannot answer why you are doing something, give it some thought and find out what your true intentions are.

This is just another example of how to improve your financial situation.  It provides a pause before you act.  Sometimes giving a decision an additional few seconds of thought can turn a bad decision into a good decision or a good decision into a better decision.

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What Stage of Financial Change Are You In?

If you choose to pursue financial independence and an early retirement, you will need to reject many of the popular, preconceived mindsets and behaviors that you’ve been taught about your relationship with money.

Over the past two decades, the average age at retirement has been increasing. Studies predict the average age of retirement for Millennials may reach 75 due to the growing costs of rent and prevalence of student loan debt.

The good news?

You don’t need to follow the same financial path as your peers (no matter what generation you were born in).

The “bad” news?

To reach retirement earlier than your peers, you will need to handle your money in a different way as well.

Pursuing financial independence will require self-education, practice, and persistence. You may or may not have the support of your friends, co-workers, and even family members… but you will need to make financial changes in your own life regardless of their own money habits.

In this post, you’ll learn more about the five stages behind every major life change, how these stages apply to your personal finances, and how you can use this model to stay committed on your journey toward financial independence.

The 5 Stages of Financial Change

In the academic world, the stages of change are more formally recognized as the “transtheoretical model of behavior change.”

This model was first proposed by psychology professors in 1977. The model is often applied to health-related changes, such as quitting smoking, starting a new exercise or diet plan, and managing anxiety and depression.

Here are the five stages:

    1. Precontemplation (not ready to change)
    2. Contemplation (considering change)
    3. Preparation (getting ready for the change)
    4. Action (making the change)
    5. Maintenance (reinforcing the change)

While you typically progress sequentially through the first four stages, it’s possible to “backslide” and revert to an earlier stage if maintenance is unsuccessful (breaking your diet during the holidays, for example).

This model not only applies to physical behavior changes but can also be applied to belief changes or decision-making as well.

Let’s take at how you may journey throughout these stages as you make significant changes in your financial habits.

Precontemplation

During the precontemplation stage, an individual is not seriously considering making a change. In fact, they may not realize that a change is necessary at all.

In the context of a health-related issue, a person in the precontemplation stage may assume they are totally healthy – perhaps unaware that their high cholesterol or blood sugar may already have them on a trajectory for a heart attack or diabetes down the road.

If you have just started your professional career, you may find yourself in the precontemplation stage of your retirement planning.

Perhaps you are contributing a small percentage of your 401k toward retirement each month. What you may not realize is that contributing just 5% of your salary is going to place you squarely in the “retire at 75” club.

To move out of the precontemplation stage may require a “financial epiphany.” This could be saving up to buy a house, preparing to have a child, or earning a salary for the first time. At this point, you’ll realize it’s time to make peace with your financial past so you can reach your goals.

Contemplation

The same year that psychology professors created the “model of behavior change,” film director Woody Allen was attributed in the New York Times for his popular quote, “Showing up is 80 percent of life.”

Just by “showing up” to read this post, you may have already progressed out of precontemplation into the next stage of behavior change: contemplation (surprise!).

During the contemplation stage, an individual is aware of their problematic behavior but are still weighing the pros and cons of change: Can I make time to exercise without hurting my career? Will my friends support me in my decision to quit smoking or drinking?

In a stage of financial contemplation, an individual may be considering their financial goals and the associated trade-offs.

  • Should we be focused on saving up a down payment for a home or paying down student loans instead?
  • Is it worth the inconvenience of downsizing our home or moving in with roommates to save additional money?
  • Can we commit to meal prepping for a few hours each Sunday night to reduce spending on lunch during the work week?

Preparation

An individual in the preparation stage has determined the pros of change outweigh the cons. At this stage, they may start performing research, creating a plan, or making small steps toward their improved for behavior.

If you are someone who wants to lose weight, your preparation might be purchasing a healthy cookbook, grocery shopping for nutritious foods, or signing up for a gym membership.

Many times, it’s tempting to skip from the contemplation stage directly into action (which we’ll discuss below). It’s important to spend time in the preparation stage to lay a framework for success.

You may have to remove barriers from your financial goals as well. This could involve learning more about debt payoff strategies, calculating your net worth to understand your current situation, or building a solid budget that organizes your finances.

Action

In this stage, individuals begin to actively change their behavior. This decision is often one of the shortest stages of change – most of the effort is either exerted in (1) building motivation during the contemplation the stage, or (2) maintaining and reinforcing change.

If quitting smoking is your health-related behavioral change, then the action stage would be the first few weeks of cessation. The behavior change requires consistent, active effort to make. You may be using aggressive strategies like substituting a new behavior in its place, rewarding yourself for the proper behavior, and avoiding any scenarios that trigger the old behavior.

There are many ways to take action and improve your personal finances. You may start scheduling recurring payments on your debt, setting aside an additional portion of your income with direct deposit, or creating a budget to keep yourself living within your means.

Maintenance

In a successful behavioral change, the maintenance stage will have the longest duration. The goal of the maintenance stage is to reinforce the new behavior to minimize the chances of a relapse. With time, the new behavior will become second nature.

It is not uncommon for individuals to relapse back to a previous stage. A successful behavior change will depend on how an individual responds to this situation:

Do you prepare yourself to eat healthily by going grocery shopping and planning your upcoming meals – or do you tell yourself that you’ll try again next New Year’s?

Financial independence is a long-term objective that requires maintenance as well. You may have to dip into your emergency fund to cover an unexpected expense. You might splurge and make an impulse purchase that falls outside your budget.

It’s important to avoid letting one setback justify additional bad behavior. Even if you aren’t perfect with your money, you can find ways to improve your finances each and every day.

How can you maintain your positive personal finance habits to minimize the impact of a setback?

  • Continue learning new financial principles with personal finance blogs and books
  • Surround yourself with like-minded individuals who share your goals and values
  • Be publicly accountable for your goals by sharing them with family and friends
  • Automate your behaviors with recurring transfers, payments, and direct deposits

Conclusion

To do something spectacular with your personal finances, you will need to adopt different beliefs and behaviors about money that may be different than your peers.

You can make this financial change easier by understanding the how the “stages of change” model applies to you and your personal finances, assessing your current status in the model, and finding ways to reinforce the right behaviors until our reach your goal.

No matter how long you’ve been focused on your personal finances – whether you’re just contemplating your goals or maintaining your progress – there are strategies you can use to make good financial behavior easier.

How do you stay committed to maintaining the positive financial changes in your life? 

Author Bio:

Aaron is a lifelong entrepreneur and internet marketer who started Personal Finance for Beginners to share experiences and insights from his own financial journey as he pays down student loan debt, sticks to a deliberate budget, and saves and invests for the future. You can find him at Personal Finance for Beginners or on Twitter @PFforBeginners.

Early Retirement: Removing Barriers

Many people dream of reaching early retirement.  Few people, however, are willing to do what it takes to make it a reality.  In most cases, to reach early retirement, a person must live differently from how the masses live.  People generally don’t want to be viewed as being different from their fellows.

The masses are living for the day, spending most of what they earn, landing in debt, and are in denial about their personal finances.  They have high hopes that their financial future will be secure.  Hope, however, is not a strategy.

To reach early retirement, a strategy is needed.  That strategy will require action and more action.  The primary objective of that strategy will be to first reach financial independence.  Financial independence is what enables people to retire early.  If a person is no longer working, the money to sustain their lifestyle needs to come from somewhere.  For most early retirees, that somewhere is their passive investments.

The path to being able to retire early is full of barriers.  Many are external like being able to maintain a budget while marketers are doing everything they can to get you to break your budget and buy whatever it is they are selling.  Some barriers are mental.  The purpose of this post is to identify a few of these barriers and to establish a plan of action to avoid them.

Ignorance

Most people are unaware of what is required when it comes to planning for an early retirement.  That is even true for those who have attended college.  People who hold a 4-year degree or beyond still struggle with doing what is required to escape having to work for a living.

When it comes to establishing a financial plan, many people truly do not understand what is required.  They feel that things will just work out like they have in other areas of their life like landing a good job or getting a mortgage to buy a house.  They are generally in denial about what is required to build a large enough net worth to sustain their desired lifestyle once they are no longer working.

The good news is that once a person decides to learn more about personal finance, there is an abundance of great information.  Once a person takes that first step towards learning about budgeting, saving, and investing, they have removed one barrier.  Once that barrier has been removed, they will discover that the basics can carry a person a long way.  The basics alone might be enough to carry some people to financial independence.

Procrastinating

Procrastinating is another barrier that stands in the way of reaching early retirement.  Not knowing about a topic is one thing.  Knowing and not doing anything is another.  To reach early retirement, it takes many years of earning a salary, saving a large percentage of that income, and investing it wisely.

The longer a person waits to start this process, the harder it becomes.  That is based on compound interest.  Let’s assume that an investor needs to have $1,000,000 saved to declare financial independence.  They also want to reach this milestone by age 50.

Based on an 8% percent return, if an investor starts to save $1,800 per month at age 30, it will take 20 years to reach their goal.   If they wait until age 40 to start saving, they will have to save almost $6,000 per month.  If they started at age 22, however, they would only have to save $900 per month.

When you are young, time is on your side.  The older you get, the harder it becomes.  Don’t procrastinate if your goal is to reach early retirement.

Not investing in stocks

To receive a return close to 8%, an investor will need to have a large percentage of stocks in their asset allocation.  Based on how investments are projected to perform for the next 10 years, an 8% return might not be reasonable.  Large-cap stocks are projected to earn 6.7% threw 2026.  For that same period, investment grade bonds are projected to earn 3.1%.

The average person has the tendency to shy away from stocks.  In the short-term, they are volatile.  Over long periods of time, they are one of the best wealth building investments for individual investors.

Instead of parking your money in a money market that returns 1%, consider adding stocks to your asset allocation.  A good place to start is to look at a balanced portfolio of 60% stocks and 40% in bonds.  This allocation is popular because it provides growth from the stock allocation and the bond allocation reduces volatility when the stock market has a correction.  Another general rule of thumb is to invest (110 minus your age in stocks).  If you are age 25, you might want to consider having around 85% of your asset allocation in stocks.

Lifestyle Creep

Lifestyle creep is a form of inflation.   As a person advances in their career and their earnings increase, it is natural for their spending to increase.  As raises and promotions pile up, people have the tendency to upgrade their lifestyle.  Instead of saving more of their earnings, people buy bigger houses, fancier cars, and go on expensive vacations.

If there is lifestyle creep in your life, it is a major barrier between reaching early retirement and being stuck as a wage earner.  Lifestyle creep inflates how much money you need in your retirement account before you can retire.  In contrast, if you keep your monthly expenses low, the less you will need to be able to retire.

If you plan on withdrawing 4% from your retirement account, have $100,000 in annual expenses, you will need $2,500,000 in retirement savings.  For those who only have $40,000 in annual expenses, they just need to save $1,000,000.  The higher your annual expenses are, the more you need to have in retirement savings.

To avoid lifestyle creep, some management is required.  A solid budget is needed.  A financial plan is also a vital tool.  First, focus on the big expenses.  Keep your housing, transportation, taxes, and education costs low.  For example, live in your starter house forever, buy an economical car, live in an area that does not have high taxes, and take advantage of public schools and state universities.

If you can avoid lifestyle creep on the major expenses, you will have more money for savings.  This will also lead to less financial stress.  Instead of stressing to cover your bills that are always increasing, you will be able to better enjoy your life because there will be less demand for having to earn more and more.

Conclusion

For most people, the road to early retirement takes a long time.  It generally takes a couple decades of solid earnings, a high savings rate, and compound interest.  To achieve this ambitus goal, there are barriers that need to be identified and managed.

To be successful with personal finance, education is required.  The great news is that there is an abundance of good books, blogs, and forums that provide unlimited information.  A good place to start is the Resources page on this blog.

There is no such thing as an overnight success.  Most overnight success stories have been a fifteen-year work in progress.  If you want to be financially successful and retire early, start today.  It is not an overnight endeavor.

Without some risk, there will only be a little return.  Identify the correct mix of stocks and bonds for your situation.  Be sure to take your age and risk tolerance into consideration.

Manage your expenses.  The greater your expenses, the more money you must save and grow.  By keeping your expenses low, the less money you will need in retirement.

There will always be barriers that stand in the way of reaching early retirement.  Once they are identified, they can be managed and overcome.  Keep your eyes open for other barriers that might pop-up.  Be vigilant and stay focused and you will be sure to reach financial independence and retire early.

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The Scarcity Mindset

Even though you are doing your best to actively manage your finances, do you ever think that you might not have enough money to pay all of your bills, enjoy life, and save for a meaningful retirement?  Do you feel lonely, isolated, or even terminally unique?  Do you make financial decisions out of fear?  Does the thought of early retirement and drawing down your assets make you feel like panicking?  Do you project about the future and only see things getting worse?  If you do, you might have a Scarcity Mindset.

Living in Fear

If you have ever studied Economics, you learned that Economics is the study of limited resources.  The Scarcity Mindset is rooted in the fear of not having enough.  The scarcity mindset manifests itself in extreme self-centeredness.  It is based on an obsession with not having enough resources to meet both your needs and your wants.  No matter what course of action a person takes who has a Scarcity Mindset, the glass always appears to be half-empty.

Why do people have a Scarcity Mindset

People who have a Scarcity Mindset are focused on loss aversion.  Many people who have this mindset were once underprivileged or are currently struggling financially.  Everyone has limited cognitive space in their brain.  People who have the scarcity mindset have unmet needs.  These unmet needs cause the brain to focus on these deficits instead of focusing on the tasks that are at hand.  It is not based on a lack of intelligence, but a constant interruption in the flow of thoughts.

Short-term thinking

The Scarcity Mindset causes one to focus on the short-term.  It draws attention to the urgent.  A sell-off in the stock market would cause a person who has a Scarcity Mindset to panic and sell low because the recent loss will wipe out their finances.  They lack the foresight to see the correction as a short-term blip on the radar.  People who are stuck in this mindset also think that current situations will never change or improve.

Mentally Draining

The consistent mental obsession with not having enough rapidly drains the brains battery.  The focus on scarcity is mentally exhausting.  The brains finite mental resources are always in a state of debating trade-offs.  For example, it is exhausting to debate if you will have enough money to cover future expenses.  It is a mental debate that can occupy a person’s whole day.  The Scarcity Mindset truly is a form of suffering.  Other decisions become clouded because of this mental fatigue.  Because of this lack of mental energy, people are more prone to make poor decisions since their mental debates can lead to irrational solutions.

Symptoms

The symptoms tied to having a Scarcity Mindset are easy to identify in your life.  Hoarding things because of the fear of running out is a major symptom of the Scarcity Mindset.  Complaining about your general living situations is another symptom because there is a lack of satisfaction in your life.  Living in chaos as the result of people pleasing, addiction, lack of production, or self-deprivation.

Barrier to Wealth

Having a Scarcity Mindset is a barrier to building wealth.  If your mind is consistently producing a negative message, it is difficult to make positive financial strides in your life.  To succeed as an investor, you need to be able to think long-term and can handle some degree of short-term market risk and uncertainty.  If you panic based on daily volatility, it will not be good for your investment returns and only add to your mental anguish.

How to Change the Scarcity Mindset

The Scarcity Mindset is all in your head.  It is not easy to break away from this mindset.  It is possible, however, if you are willing to work on changing your thought process.

  • Write a list of everything in life you are grateful for. This list should include everything including food, housing, health, friends, family, and work.  If it is a source of gratitude, add it to the list.  Review this list at least once per day and more often if you are feeling negative.
  • Don’t compare how you feel too how others are living. Don’t compare yourself to others on any level.  Don’t try to keep up with neighbors, friends, or siblings. Live your own life.
  • Build your self-esteem through positive actions. Take a class. Volunteer to help people who are in worse financial or physical shape than you are. Take on extra responsibilities at work.
  • Focus on the present moment. Don’t project into the future where there is fear.  Don’t rewind to the past to feel resentments.  Keep your mind focused on what is currently in front of you.  Refocus as many times as you need to during the day.
  • Look at setbacks as a learning experience. Repeating the same mistakes, but expecting different results is a sign of insanity.  When you make an error, learn from it.  Try a different approach when faced with a similar situation.
  • Build closer friendships. If you want to gain a friend, becoming a better friend.  People are not going to come looking for you.  It is up to you extend your hand and keep reaching out to others.
  • Avoid negativity. Avoid the political and financial media.  There are great things happening in the world.  You just will not find information about those things in the media because they do not sell.  Check out this blog’s Resources Page for unlimited positive blogs, forums, and podcasts.
  • Reduce clutter and add order to your life. Embrace minimalism.  If you own things that you no longer use, give them away.  Whatever those things might be, they might be more useful to others.  Some examples are old books, clothes, sporting goods, or electronics.

Conclusion

Don’t beat yourself up if you feel you have a Scarcity Mindset or some of the symptoms.  The good news is that you can change this mindset.  It will take time and effort, but you can do it.  If none of the above suggestions are helping, seek professional help from a therapist.  After you break away from the Scarcity Mindset, you can start working on developing an Abundance mindset.  That is when life starts to become more of an adventure than an obsessive based existence.

Do you feel that you have a Scarcity Mindset?

What are some of the steps that you have taken to change how you think?

 

Planning on working until age 70?

Should you plan on working until age 70?  This suggestion has been surfacing in the mainstream financial media.  It is perfectly fine to work until age 70 or beyond.  It should not, however, be the age that your retirement planning is based upon.

Some people like to work.  It gives them purpose.  Work adds structure to the day.  For many people, it is their identity.  Their job is who they are.

Even if you truly enjoy your job, it is practical to have exit strategy in place.  Life happens, and changes occur on many different levels.  It is prudent to have a plan that enables you to exit the workforce sooner rather than later.

There are many reasons why a person should not set their target retirement age to 70.  Planning on working at such an advanced age is difficult because there are too many variables.  Below are some of the concerns that I have with planning on working until such an advanced age:

Financial Planning

If you set your target retirement date for your 70th birthday, it will have a negative impact on how you manage your finances.  It might even prevent you from creating a financial plan.  Savings will not be a priority.  Without an ambitious goal of retiring at a young age, the temptation to spend most of your money will win out every time.   The motivation to save a large percentage of your earnings for retirement will not be a priority while you are working.  It can easily lead to the mindset of thinking that retirement will never occur, you only live once, enjoy it while you are young, and other poor money management theories.

This mindset can easily lead to a financial disaster.  It would also be much easier to take on debt.  Spending leads to more spending.  If you must work forever, you might as well have a nice car, house, and other stuff to show for it.  You will be stressed from all that work, so two or three expensive vacations would provide just enough rest and relaxation to keep you motivated.

Health

Unless there is a major medical discovery, our time on this planet is finite.  Nothing lasts forever and that includes our ability to work.  As time goes by, we break down.  Everybody is different, but it happens to the best of us.  If you have a physical job like a construction worker, your ability to perform your job is shorter than if you have an office job.

Even though Office work is not physically demanding, it is not healthy.  Some say that sitting in front of a computer all day is as bad for your health as smoking.  In other words, sitting also breaks down the body from lack of exercise.  Along with our bodies, our minds are not able to manage stress and deadlines the way it did when we were young.  Our egos might not like to accept these facts, but it is just part of being human.

Family

As life goes on, our family obligations change.  Parents age and require more of our attention.  They might even require us to become their primary caregiver.

Children require attention past the age of 18.  Grandchildren are born and need to be cared for.  Daycare is expensive.  Your children might ask you to watch their children, so they can go to work and earn a living.  There are many family situations that could require a person to have to stop working much sooner than age 70.

Job Loss

What will you do if you get laid off in your 50’s, but your financial situation requires you to work until a much later age?  Recessions occur about every 10 years as part of the business cycle.  Some companies go out of business.  Some companies survive by cutting labor expenses to remain profitable.

Unless you have a tenured position, in many cases, the first employees to get laid-off are middle managers or older employees.  Loyalty is a thing of the past.  Just because you were loyal to an employer, it does not mean that they will be loyal to you.  Just because you want to retain your position, it does not mean that they will retain you.

Age Discrimination

Age discrimination is a real issue.  Under Title VII of the Civil Rights Act of 1964, an employer cannot discriminate based on age.  The protected age under Title VII is 40 and older.

Even though it is illegal to discriminate based on age, unfortunately, it occurs.  I have had to coach hiring managers and executives many times about this law and practice.  They do not set out discriminate.  They just tend to see younger prospects as being more budget-friendly and motivated than mature workers.

Just because you want to keep working, there is no guarantee that the type of work that you performed during the prime of your career will be available.  You might think that you can still perform at a high level.  The hard part is convincing an employer that you still can do it.

It is Not Fun Anymore

Even though you enjoy your job today, it might not always be that way.  Your assignment might change.  That great boss who supports your development takes on a new assignment and your new boss is a jerk.  The co-worker who you are friends with gets a new position.  The demands change.  The company is bought by a competitor.  There are countless things that can occur that can turn a good job into a terrible job.

What Age Should People Plan on Retiring

It is prudent to plan on being able to retire much earlier than age 70.  I would suggest setting a goal of having the option to retire by age 55 or younger.  That does not mean that you must retire at that age.  It simply means that you have the means to step away from work if you must.  By being financially independent, you simply have more flexibility for whatever life has in store for you.

By setting a younger retirement age, you will manage your finances more wisely.  It forces you to start saving a large percentage of your earnings as soon as you enter the workforce.  It will force you to spend less and avoid wasting money on stuff that you do not need.  It will also help you to avoid consumer debt like credit cards or auto loans.  It will force you to live and spend smarter.

If work is your passion, don’t give it up.  I hope that you can work until you are able to call it quits on your terms.  Never the less, life does not always work that way.  Plan for the worst and hope for the best.  That is why planning to work until age 70 is not a good plan.