When you picture retirement, what do you see? Hours watching TV at home? Community bingo? Chances are if you graduated college in the last ten (or twenty, or thirty) years, that vision isn’t too appealing. Why would you want to retire when retiring sounds kind of depressing?
This all goes back to the idea of retirement being the phase of our lives where we give up and proceed to live in the most monotonous way possible. That retirement is a boring alternative to living a fulfilling life.
But what if retirement was exciting?
Retirement Doesn’t Mean Tiring Out
Retirement as we know it is changing.
While retirement has traditionally been associated with people reaching a certain age, it now has to do more with reaching a financial milestone. What exactly is that milestone? It’s hard to say, but many people say it’s about having enough money to quit your day job and still have the cash to enjoy life and fund the next adventure. Some people refer to this state as financial independence or early retirement.
For many people, reaching this financial independence means the ability to do the things they love, like travel.
Take Jeremy and Winnie, the couple behind Go Curry Cracker! After building up a “retirement” nest egg, they now spend their days country hopping with their young son. Their lives hardly sound boring (or deprived – they often dine out and stay at awesome digs), but they’re still “retired.” Then there’s the duo behind Our Next Life, a blog about one couple’s sprint toward early retirement. They’re in the midst of their trek toward early retirement, and they plan on “extended travel” when they’ve completed it.
For others, reaching financial independence means enough leeway to start your own business.
Michelle Schroeder, the woman behind Making Sense of Cents, started supplementing her primary income through side projects. Eventually, she started earning and saving enough to quit her job as a financial analyst and work full-time on her blog. One scroll through her colorful Instagram feed full of snaps of parks and beaches (many with her trusty laptop close by) show that quitting your job definitely doesn’t have to be boring.
That side gig you’re passionate about? With money saved up, you can turn it into something truly valuable. One great option is to start your side hustle now, then shift your attention toward your business full time once you reach financial freedom.
Financial Freedom Is Very Possible
Between student loans and the typical costs of living, it’s reasonable to believe financial freedom is impossibly far off. However, even if you have student loans it’s entirely feasible to save for retirement. The trick is to not try and do it all at once.
Some articles state you’ll need a whopping $2 million to retire. While we understand the logic behind the number, there are two things to understand.
One, every person has different spending needs, so there’s no one size fits all number that you’ll magically need post-traditional job. You need to think about your particular spending habits. While it may be impossible to think about exactly how much money you spend every month, try to calculate an estimate.
Two, you simply can’t get to a couple million dollars overnight short of robbing a bank or winning the lottery. So don’t think about tackling a massive number in a few hours. Instead, start pocketing a little bit of money early and frequently. When it comes to investing, compound returns can help you take modest sums of money and exponentially multiply them. The sooner you start, the better.
Auto-depositing cash toward financial freedom makes it seamless. Finance writer Zina Kumok writes about the importance of setting up auto-deposit from your checking account or paycheck into your retirement account. This way, you avoid struggling to save, and you automatically create a new budget to work within that factors financial freedom into the picture.