This is my public declaration, so I don’t back out (unless I quietly delete this later), that I have run the numbers and formulated a plan to retire at 50.
OK, it’s more accurate to say that I can retire at 50, just as soon as I complete an admittedly substantial amount of prep work, but I have a plan and I’m confident it’s a good plan.
If you missed it, I went into slightly more detail about this plan on this week’s podcast.
“But Leif,” you may be thinking, “you were a very happy, but poorly paid freelance travel writer for so long, how can you afford to retire at 50? Do you even have a savings account? Based on your clothing, I’m guessing not.” Well, I’m not going to try to convince you to go this route yourself, but my ticket to immediate retirement is to move out of my condo and into a (very nice) van.
I’ve been fixated on #vanlife for months now. You should check it out. I’ve watched a million videos, including every “why van life sucks” video on the internet and I’ve determined that I’d survive and probably thrive in a (VERY nice) van. The passive income from renting out my condo, my parking spot, my storage unit and the modest, but ongoing royalties from my books will just cover my monthly expenses living in a (ridiculously nice) van. I’ll probably do one or two writing gigs a month, just so I have money accumulating to pay for breakdowns, but that’s about it.
So you don’t want to live in a van you say? Understandable. Despite all the young, hot, half naked couples who are enthusiastically Instagramming about van life, it’s definitely not for everyone. However, if you spent the rest of the evening weeping and clutching a pillow after watching Nomadland, you should know that it’s not even remotely as bad as you think. Ultimately, though van life comfort and technology have come a long way in just the past few years, managing expectations seems to be the key to happily living in the equivalent of a Hong Kong apartment on wheels.
But enough about me. How can you retire at 50 – or at least before you need a walker to get to your mailbox? Keep reading. (But also, buy all of my books, so I can afford the extra fancy bathroom and solar array for my van.)
You will need to make concessions
You thought I was going to say “Step One: You need to save $250,000,” right? Well, money, and many other things, fall under the umbrella of concessions. Before you do anything else, you need to ask yourself some easy, or perhaps extremely difficult, questions about what concessions you’re prepared to make to quit your hateful job and crop dust everyone on your way out the door. Everyone is different, but I’m going to tell you about the concessions I’m making – and have been making for the past two decades – to retire at 50. You can feel free to adopt or ignore any or all of them.
Reducing expenses is key
If you’re not rolling in money, rather than get a second job and work yourself to death so you can retire sooner (and probably in poorer health), do your best to reduce expenses. Some people are already operating on bare bones expenses, but most of you aren’t. There are likely several small expenses and, hopefully, one or two large expenses that can make retiring at 50 (or what have you) tantalizingly realistic. Once you’ve reduced expenses enough to bring early retirement into clear focus, the motivation to reduce a few more expenses to reach the finish line will come naturally. Here are a few big (and small) expenses you should consider eliminating.
Behold! The “How to retire at 50” master plan.
When I moved back to Minneapolis after more than four years of nomadic wandering around the planet, I made the intentional decision to engineer a lifestyle without a car. Buying a car alone can be expensive to begin with, but after you factor in gas, repairs, upkeep, parking and all the other day-ruining parts of owning a car, you can save extravagant amounts of money by not owning one.
If you live in a city, town or neighborhood where the public transportation sucks, nothing is within walking distance, biking is dangerous, scooters are banned and Lyft/Uber don’t operate, you’re going to have to move. You like where you live and don’t want to move, you say? Well, then stop reading this and go find a “How to retire at 80” blog post. (But still buy my books, please, which are guaranteed to bring you at least temporary happiness.)
With no car, you will have a new, albeit drastically smaller expense, your bus/train card. And perhaps the occasional Lyft/Uber ride.
I live in a walkable neighborhood, which also happens to be the main hub for Minneapolis’ affordable and reliable public transportation, and I enjoy riding my bike. There’s usually one or two times a year that I wish I had a car, but between ride-share services and the occasional car rental, I don’t miss owning a car for one single second.
Finally, if you haven’t already, go watch videos of people wearing heart monitors while driving. Even under pleasant circumstances, driving is insanely stressful. That stress quintuples every time something breaks or some idiot rear-ends you. The secret bonus is, if your stress is lower, you’ll probably be mentally and physically healthier, which means you’ll be less likely to polish off an entire bottle of wine on a Tuesday.
Downsize your living space
Right at the top of the “How to retire at 50” official list of cost-cutting tactics, one millimeter below getting rid of your car, is downsizing your living space. Some of you may have already gone through this the hard way after the 2008 housing bubble burst, but the invented American fantasy that you need the biggest house you can afford is just that, fantasy. Go to literally any other country in the world and they’re doing just fine, thrilled even, to live in apartments, condos and shared living spaces.
If couples, sometimes with a dog, can live in 400-square-foot New York City apartments, you’ll do just fine in a smaller space. If you’ve never had to seriously consider living space limitations before, think of the smallest space you could conceivably live in and then reduce that number by 30% and that’s probably going to be plenty of space.
“But where am I going to put all my stuff?,” you ask? You’re going to put it on Craigslist, that’s where. Why do you even have all that stuff? Here’s a good guide for getting rid of stuff while downsizing: If you haven’t used it, looked at it or thought about it for more than two years, you probably don’t need it. It seems terrifying at first, I’ll admit, but I promise that when it’s all over you’ll swoon with feelings of liberation. If your stuff has even a little value, you can sell it and you’ll probably walk away with a nice chunk of cash to design your new living space to your liking.
You can kill two birds with one stone here by moving into a smaller space located in a more walkable, public transit-friendly neighborhood. If the property prices/rents in this theoretical neighborhood are higher than what you’re paying now, remember you’ll be getting rid of that money pit car. If you do the math and the increase in rent/mortgage is comfortably wiped out by the cash you’ll save without car expenses, then you still have a net gain at the end of the month.
A small, but additional reduction to your expenses that will go along with your smaller living space is a smaller electric bill. The cost difference of heating and cooling a smaller space is going to be immediately apparent.
You don’t really need [insert thing]
“The things you own end up owning you.” – Tyler Durden
Plans to retire at 50 and unchecked shopping and materialism go together about as well as orange juice and toothpaste, with a coffee chaser. If you can’t control your spending, then retirement (now or ever) may not be a possibility. Studies have shown that buying things causes, at best, only brief upticks in happiness. You know what causes permanent upticks in happiness? Quitting a job you hate.
If you’re a manic shopper, you may need a little support in breaking that habit, which is perfectly fine. I’m of the opinion these days that anybody who *isn’t* in therapy for some reason or another cannot be trusted.
If your impulse to acquire stuff is manageable, you can probably ween yourself off using a little willpower.
If, like me, you spent a substantial portion of your best earning years in a highly rewarding, dismal paying job like freelance travel writing, you may not have a lot of money to work with. For those of you who earned better money, it’ll be a bit easier to retire at 50. (Again, your mileage may vary.)
Through years of hard work and living a frugal lifestyle, I’m not doing too bad in terms of savings. I also have the advantage of several aforementioned sources of passive revenue, which I wouldn’t describe as impressive, but it happens to be just enough for me to retire at 50.
Everyone’s situation is different, but in my case I was able to own two condos simultaneously. I paid off my first condo after only 11 years, because it’s small and it was located in an affordable building and neighborhood. With that asset in my back pocket, I was able to buy a second, equally small condo. The mortgage for that second condo has been paid for, and then some, by my renters. I’ve now moved into a slightly nicer condo and I’ll be selling the original condo, which will be the nest egg that makes it possible for me to buy and outfit my (remarkably swanky) van.
Without the revenue from renting out my current condo (and parking spot and unneeded storage space, because I don’t shop unless it’s for clothes at gun-point), my plan to retire at 50 would be a lot more difficult. Perhaps impossible. Personally, being a landlord can be kind of a pain, but I’ve mostly had good renters and, a few surprises aside, it’s been a relatively smooth experience.
Pets – lovable, but necessary?
Bear with me. I understand that many people consider their pet(s) to be a vital, non-negotiable component of their happiness. If that’s you, skip to the next section.
For everyone else, limiting the number of sentient entities in your home can have a remarkable effect on your annual budget. Even for a healthy pet that doesn’t have a years-long, end-of-life, insanely expensive decline, the day-to-day cost of pet parenting quietly adds up. Pets requires mild (goldfish) to substantial (dogs) money, time and energy, not to mention the ongoing disposal of fecal matter, vomit and the logistical management for whenever one wants to leave town or even have a long day away from home.
I’m not saying you should get rid of you current pets, but when the pet(s) you have now pass away, take time to grieve and then take a beat. Give it a year. If, after a year, you feel as if your overall happiness has plummeted without a pet, then get a new pet. Otherwise, pass “Go,” collect $200 every month and advance two steps towards Retirement Avenue.
If you absolutely need to pet a dog, go to an animal shelter. If you need kitty cuddles, chances are your neighborhood has a handful of indoor/outdoor cats and when they figure out that your house is a reliable source of alternative scritches, you’ll get a few cat fixes each week and you can then retire to your living room that doesn’t smell remotely like kitty litter. Also, if you don’t have pets, you can do things that retirees do, like leave for a long weekend at a bed and breakfast with three hours notice. Also, isn’t there some kind of bacteria in cat poop that makes you go insane?
Retire at 50 speed round of other ways to reduce expenses
Eat out less – Holy hell, getting take-out food and going to happy hour once or twice week adds up fast. Several hundreds of dollars a month fast. I got into this bad habit a few years back while I had a normal day job. There just wasn’t enough time when I got home from work and working out to cook and clean up before I needed to get to whatever thing I needed to get to that evening. If you retire at 50, you’ll have more time to cook for yourself, which should result in immediate three-digit dollar savings every month. And why not do happy hour at your home sometimes? Home is nice. You should spend more time there.
Stop drinking $7 coffees twice a day – You know you’re perfectly capable of making your own fancy coffee, right? And it should only take a little longer than it takes to stand in line for the privilege of paying $7 for $1.20 worth of ingredients mixed together by someone else. Coincidentally, if you want cheap, portable caffeine that weighs almost nothing, I have a suggestion.
Gym membership – Do you really need to go to the gym with the snowy white towels, a futuristic contraption that only works your lats, and cardio equipment with virtual reality interfaces that constantly measure 16 vital signs and sperm count? No, you don’t. Planet Fitness memberships are about $20 a month these days. Or, even better, when you downsize your living space, consider moving into a condo building that has its own fitness center.
New, less sucky, sources of income to cover the rest
Even after all your downsizing, car-eliminating, unneeded stuff dispersal, and leveraging whatever resources you have into passive income streams, you’re still probably not going to have quite enough money to cover monthly expenses in retirement.
But! Here’s a dirty secret the financial planners don’t tell you about retirement, it can be boring as f*ck. Unless you have a time-consuming hobby or plans to single-handedly build a submarine out of salvaged junk, once the novelty of sleeping late and doing nothing wears off, you’re going to need something to occupy your time. Since you’ve reduced your expenses, you can afford to go find a job that you actually enjoy, rather than a job that will comfortably cover your former living expenses.
Think of that time you heard someone tell you about their job and you said “Wow, that sounds like fun, but I wouldn’t be able to pay my mortgage on that salary, so it’s back to hazardous waste abatement for me.” Well, now you can go get that job!
Work in a chocolate shop. Get a job walking or babysitting cute, cuddly dogs. Work in a bookstore, used record shop, or garden center. Run away with the circus. It doesn’t matter if it only pays minimum wage. If you’ve got everything else in place, you don’t need a high-paying job. But, believe me, you will need something to do. It might as well be something you enjoy.