The right time to retire early doesn’t depend on how much money you have saved — there probably is no right time to retire early.
I spoke to several early retirees, and they all wished they retired even earlier, before they thought they were ready or reached their savings mark.
Leaving the corporate world doesn’t mean you’ll never earn money again; in fact, you probably will.
Are you ready to retire early?
Before you answer “no” because you haven’t quite hit your early retirement savings goal, here’s the thing about the right time to retire early: it doesn’t exist.
At least, that’s the common thread among several early retirees I spoke to. In hindsight, many wished they didn’t wait so long to plunge into early retirement — even if they didn’t have as much money saved as they would have liked.
To be clear, while the amount of money you have saved is an important factor (you certainly can’t live for free), some early retirees say it’s not the deciding one — or at least, it shouldn’t be.
“I wish I knew to do it sooner,” Chris Reining, who retired as a self-made millionaire at age 37 and runs a blog, previously told Business Insider. “It was easy to set a goal to become financially free. Getting there was pretty hard. But quitting, retiring early, that was the hardest.”
That’s coming from someone who retired before he even hit his original financial target. Reining aimed to retire early when he had enough saved to live by the “4% rule,” meaning he could withdraw 4% from investment accounts each year while adjusting for inflation and without running out of money. Instead, he retired when he was able to draw 3%.
“The funny thing about money is you always feel like you need more — even when you have enough, you never have enough,” he said.
Even if you do hit your savings goal, there’s a chance you’ll feel like you could save just a little bit more. You might never feel truly ready — but that shouldn’t prevent you from retiring early anyway.
Leaving the corporate world doesn’t mean you’ll never earn money again; in fact, you probably will
How much money you need to retire early is different for everyone and depends almost entirely on two factors: your cost of living and the potential for investment growth and passive income. Still, leaving the corporate world isn’t an end all, be all.
“I wish I knew that it’s OK to take the leap before you think you’re ready,” Joe Olson, who retired at 29 with his wife, Ali, previously told Business Insider. Together, they travel and run a blog called Adventuring Along. “You will very likely be fine, and if you aren’t, there are so many opportunities in life, you can go earn more money later if it’s needed.”
J.P. Livingston, who retired at age 28 with a nest egg of more than $2 million, made more than $62,000 in passive income through affiliate commissions and ads for her personal-finance blog, The Money Habit.
She previously told Business Insider that if she knew it was still possible to generate income during retirement, with way less day-to-day commitment than a corporate job requires, she would have retired even earlier than she did.
“I wanted to be absolutely sure I didn’t have to work at all once I pulled the trigger,” Livingston said. “If I knew then what I know now, I would at least modify my target retirement number to need less buffer, because I knew I could work part-time as a fallback to supplement our needs.”
As Olson puts it, “If you define ‘retirement failure’ as needing to go back to work for a few years and you instead delay your retirement to ensure that you’ll never have to go back, then you’re guaranteeing that ‘retirement failure’ of working a few extra years — you’re just doing them up front.”