There’s Not Enough Time To… Retire Early

My dad turned 70 this year, and the hard fact of that number induced a sudden fearful realisation; my dad is going to die one day. Of course it is inevitable, but as humans we have the ability to ignore the obvious. We just brush it aside and carry on. This day, however, made me take a mental step back and actually look at my dad, through the eyes of someone who has just met him – and he looks old.

Yes, he devotes time to maintaining his mental and physical fitness. Being long retired, Dad is under no obligation to get out of bed by a certain time each day, spend the day sitting in an office, teach children, or labour. He chooses to do those things. Dad is active every day, usually helping others in some capacity. He will give anything a try, and do anything for anyone – but there are days when he had been unwell. Recently he underwent treatment for skin cancer on his face. Everything is fine, however he is one of the lucky ones. 2016 has been a depressing year regarding cancer diagnoses in, and deaths of, my friends’ parents.

A secondary realisation that came from looking at my dad was that by the time reach his age, the Government will want us to still be working. At the moment, the pension age in Australia is 65, raised to 67 for those born after 1957 … call me a cynic, but I firmly believe in the next 20 – 25 years (when we will reach this target), the requirement will have increased again to 70. Neither Mr. ETT nor I  want to be obligated to work until that age, which is why we are beginning to engage with the idea of FI. We are too late for the full RE, because the time it takes the compounding effect to work for us will put us at the retirement age anyway, but we are working toward a couple of goals:

A Comfortable Retirement

Regardless of the age we retire, we want to have enough to continue or only slightly reduce the standard of living we have now. AFSA produces calculations every quarter detailing what modest and comfortable levels of living look like for retirees. We would like to be even better than their calculated standard.

ASFA Retirement Standard September 2016 - How Much is Needed to Retire
ASFA Retirement Standard September 2016

 

No Reliance on the Pension

We’ve had a good life, and by being sensible now, we should be able to continue to do so without falling back on Government support. There are a lot of people who haven’t had the opportunities we have had in life (like basic financial management education), or are forced to stop working due to ill-health. I would rather the support go to those who genuinely need it. I see the pension as a safety net, not an inalienable right.

We Want to Retire a Little Early

Even if it is only a week, we want to have enough to be able to make a statement. “Government, we can survive for the next week without needing any support from you. We are choosing to retire at 69 and 51 weeks”. That is what FI is all about – the freedom to make choices.

At this point, we aren’t seriously on the path to FIRE. Quite frankly, our minimum Savings Rate is only slightly above the Australian average, which was 12% in March 2016. The difference is that we have a long-term goal for our investments. Hopefully as they begin to grow, we will become more inspired. I will be honest and declare right now: you will never see a savings rate of 70% on Enough Time To… and we are OK with that.

Will you be able to retire early?

9 thoughts on “There’s Not Enough Time To… Retire Early

  1. I am hoping to potentially retire in the next five years but we will have to see how the stock market cooperates 🙂 Over the past four years I have been saving 70% of my income and I’m hoping that it’s worth the sacrifice. Thanks for sharing!!!

    • Go MSM! I do have huge admiration for those that are able to make that sacrifice. When I first discovered FIRE, the thought of 5 or 10 years away seemed like FOR.EVER. Now I’ve been reading blogs and trying to get ourselves on some sort of path, suddenly one of those years has already gone by! I will keep my fingers crossed for an excellent market for you.

  2. If it helps, at 12% the average Australian is saving more than double the average American over here (5.7% apparently). So you’re way ahead of us! Plus FIRE isn’t everyone’s goal. If it’s not yours, that’s fine-what matters is that you’re achieving your own goals.

    • Yep, looks like we had some sense knocked into us with the GFC – we basically had a zero percent savings rate in 2002 – 2003. Australia was really lucky that we weren’t affected too badly, and it seems as if we learned a lesson. Now we just have to keep spreading the word and hope that as a nation we don’t become too complacent and return to our spendy ways…

  3. The fact that you are writing this blog and looking at your own financial situation means that you are way ahead of many of your peers already. High savings rates are good but only if you can still lead the life you want to whilst saving. Bit pointless being bad-ass frugal superheroes but being miserable because your social life doesn’t fit in your budget!

    UK is like Australia regarding pensions – I won’t be able to get my state one until age 67 and I plan on retiring at least 10 years before then.

    My friend who’s a millennial – she’s unlikely to see hers before 70 I reckon.

  4. It’s a scary thought when you initially think of your parents as heroes and invincible but the older you get the more you’re realise they’re just like everybody else (but usually awesome).

    I think most of the Australian population can count themselves lucky that we live in a country so generous. We definitely don’t think we’ll be getting a pension – both because we hope to do really good and because the pension probably won’t be what it is in 40 years time.

    I’m glad you know exactly how you want to live, and don’t feel bad about it, it’s your life that you’re living right now.

    I really do hope that we can retire early 🙂

    Tristan

    • You two are definitely going to retire early. You’ve got your heads totally wrapped around this thing, and you have time on your side. If there’s a few zig-zags along the way, you’ll still be good to go. Have you thought about what age you are aiming for, or is it a bit too soon yet?

  5. We are still aiming for retirement in six years. While it will be super early for me, it will only be slightly early for Poopsie, as he is a fair bit older. But we know it’s still a lot earlier than many so we are grateful!

Activate Communications!