Most workers live for a meager check, a 14-day annual vacation, or contributing funds into a retirement plan.
If you are always working for a living, then when does the living actually begin? Must youth be sacrificed to secure comfort in old age?
Over a quarter of retirees say retirement is not what they imagined it to be.
One of the good things about the recent pandemic is that it forced many Americans to rethink their futures. The average retirement savings fund has increased by 13% to almost $99,000 since 2020.
However, unless you plan on retiring in a developing country, $99,000 is not enough to fund a retirement plan. If you retire in a large metropolitan city with a high cost of living, then you may need $45,000 annually to pay your retirement expenses.
A lot of factors must be considered to develop a retirement number or the amount of money required to live the retirement lifestyle you prefer. We open retirement savings accounts, contribute to retirement plans and then monitor such plans for decades.
Are there better options for retirement planning? Well, that depends on your definition of “better.”
Many people are now joining the so-called FIRE movement, which stands for “Financial Independence, Retire Early.” It’s a financial and philosophical movement where adherents strive to retire as early in life as possible.
The typical FIRE adherent wants to retire in their late 30s or in their 40s or 50s. However, such a goal requires sacrifice, discipline, and an extreme frugal mindset.
The FIRE Mentality
The average FIRE adherent must save anywhere between 50% to 70% of their annual salary to achieve their goals. Or more.
Most of the people who brag about their successes following FIRE usually have high-paying jobs.
The average American makes $48,700 annually. 70% of $48,700 is $34,090. So, imagine trying to live on $14,910 annually with a family and expenses in a large city.
Many critics of FIRE dismiss it as a fad that teaches the wrong lessons about being frugal. Is the aim to retire as early as possible for its own sake? Would the sacrifice be worth it?
What would you do after retiring by the age of 48? What would you do?
Retirement is not a fad. Attaining your retirement number is a singular, unique, and customized process. And with the help of a financial advisor, it could take years or decades to find your unique retirement number.
It’s hard enough living life just to stop working at 65. What would you do after retiring early?
Make retirement a long-term goal, not a short-term fad.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.