I’m often asked this question – “How much money do I need before I can retire early and be financially free?”
My answer is – “It depends.” It depends on this…
How much happiness you think you’ll be able to withstand in retirement.
Some people can’t withstand that much happiness, so a little amount of money for retirement is probably best for them.
However, if you’re like me and can withstand a lot of happiness, I suggest you build a big nest egg.
In all seriousness, the real question behind that question is this…
“What’s the minimum amount I could retire on?
That type of question leads people to devise plans for just doing what they think is the minimum.
I get it.
These people want to spend like crazy now and just barely cross the retirement finish line later. Their biggest fear? Retiring with too much money! That means they gave up something along the way.
Oh, the humanity.
Imagine if you were a structural engineer. Your crowning career moment has come and it’s to build a bridge connecting two major cities. The bridge will carry you and your family over many trips across alligator infested waters. And the bridge will need to last 100 years. Lastly, the two cities have agreed to honor your achievement by naming the bridge after you once it’s complete.
How would you build the bridge?
Would it be with shoddy materials? Would you cut corners? Would you build it not anticipating the future effects of hurricanes, tornadoes and earthquakes? Or extremely heavy loads? Would you build it with the idea to just barely get the city inspector’s stamp of approval?
Of course not. You wouldn’t build that bridge nor would you buy it.
And so should it be with your retirement savings.
You see, when you’re saving for your retirement and building savings, your buying something – you’re buying your independence. Later in life, you’ll have regrets. Everyone does. But one of those regrets will not be having too much money in retirement. Of all the things money can buy, there’s two things that those of retirement age want to buy more of – time and independence.
Back to my tongue-in-cheek answer…
Living a fulfilled life is as simple as deciding what you want in life and going off and getting it. This is the essence of happiness.
If the prospect of working forever seems okay to you, then go ahead and spend all of your income. You won’t have to worry about withstanding too much happiness when you reach retirement age. You won’t be burdened with a fun and exciting retirement.
Alternatively, if what you want is just enough money to not have to go to work, then go ahead and save a little for retirement. While you’re at it, talk to a few retirees that you know. Talk to those who are living off of Social Security and just squeaking by and ask them this question – did delayed savings worked well for you? In other words, are they suffering from too much happiness?
I see, read and hear about a lot of misery from those who have “retired” like what was described in the previous paragraph. What I see in those cases is this – anxiety and lack, hardly the case of too much happiness. They’re fearful of entitlement programs being cut. They’re counting pennies to make sure they can cover the bills this month. Travel to awesome places? Cool hobbies? Spoiling the grandchildren? Forget about it. They don’t have that much happiness to spare.
And what if you don’t fit into either of those two categories?
Maybe you’re one of those rare birds who can withstand a lot of happiness.
Maybe you have a high tolerance for joy and fulfillment.
Maybe you don’t want to just retire. Maybe you want to be financially free, so you have no worries.
So that you can explore the world.
So that you can build schools for the homeless children.
So that you can laugh until your sides hurt.
So that you can enjoy all the great experiences out there.
Is that you?
If so, my suggestion then is to build a retirement bridge that you’ll be proud to have your name on.
Build a retirement account that can afford a ton of fun things and experiences.
Build a retirement account that can fund your biggest dreams.
Build a yourself a retirement nest egg that can provide you with as much happiness as you can withstand.
Be free. Nothing else is worth it.
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