Looking at online personal finance forums, I see more and more people talking about retiring early. People who are planning to stop working at age 50 – 55. As someone who will be 50 years of age this year, I am nowhere near ready to stop working!
Helping people enjoy retirement is what I do for a job and retiring early isn’t easy to do. Retiring at 60 requires a lot of work and planning. Never mind retiring at 50!
Warren Buffet accumulated most of his wealth after the age of 65. Many say that over 90% of his wealth was accumulated after that age. This is due to his long term investment strategies and the power of compounding over time.
If you retire at 50, you are are missing out on at least 10 year of income. That is money that is used to pay for expenses and any surplus is invested to compound in value over time. You are also missing out on all those pension contributions, from both yourself and your employer that will compound over time.
Instead, you are moving from accumulation to decumulation of your savings, spending down your money years before others. Instead of compounding, you are spending.
Most people have a lower income in retirement than when they were working. To be able to have an enjoyable retirement, you want to reduce those obligated expenditures, the biggest of which are debt and children.
Carrying debt into retirement is the biggest mistake you can make. It doesn’t matter what age you retire at. So the mortgage has to be paid off early.
The other big cost is kids. Unless you had kids young (or don’t have any at all) most people have teenage kids by the time they hit their 50s. And teenagers aren’t cheap! Education still has to be paid for and they are still reliant on you to pay for most expenses that they have.
I was at a workshop recently about creating a value for your business. During the coffee break I was asked if I received an big offer for my business would I retire. I said no as I don’t have enough other interests to take up my time.
Our work give us a purpose. We spend years getting experience and qualifications in what we do. People come to us for our opinions in our chosen field of work. Most of our time is taken up with work.
It is fine if you want to stop working early but what are you going to replace it with? It is not as if you can do activities with people your own age, they are still working! Do you have other passions and interests that you want to pursue instead? This is as important a consideration into retiring early than the financials. What are you going to do instead that results in you having a meaningful life?
If you want to retire early because you hate your job, then why not look for a new career? You are never too old to train to do something else. Something that you are happy to go to each day. It doesn’t have to be a job you hate or retire, there are lots of other options.
Steven Barrett
30 June 2025