On Retirement – Early or Never?

Our current concept of retirement is relatively new. Past generations had no idea what it meant not to work. They only stopped when they physically had to. Here’s an interesting tidbit – in 1890, nearly everyone died while still employed, and if they were healthy enough not to expire on the job, they retired at age 85.

Boomer parents were retirement pioneers.

The retirement age of 65 was first set in Germany in 1916, adopted by the U.S. in 1935, and in Canada shortly thereafter. It was probably the advent of CPP and OAS benefits that created the mindset to retire at age 65. Then came the lure of Freedom 55 and people were led to believe that 55 was a reasonable retirement age.

Related: How much do you need to save for retirement?

Presently the average age of first retirement is about 56 years, often followed by a return to work, at least part-time.

According to Statistics Canada, the retirement age is actually increasing. The median is 62 for men and 61 for women, although 32% of Canadians expect to still be working full-time at age 66. 20% don’t plan to retire at all.

In organizations where pensions enable earlier departures from work, the lure often takes precedence over job satisfaction. Perhaps that’s why Federal government employees ditch work at the median age of 58.

Of course, many people (especially those with no company pension plan) are just not ready financially to stop working, but many others stay employed for job satisfaction, social interaction, and a sense of purpose.

One study found that mortality rates improve with an older retirement age. Here’s a sobering finding: 16% of people who retired before age 55 had died by age 65.

Do You Want An Early Retirement, Or Do You Never Plan On Retiring?

Extreme early retirement

Not everyone wants to work until they are 65. Do a Google search on early retirement and you’ll find over 1.6 million results. I’ve read a lot of articles about people expecting to retire at ages 45, 40, 30, and even mid-twenties.

Related: Why options mean freedom when it comes to retirement

Early retirement blogs give some good – if basic – financial advice to achieve this. My questions are, however:

  1. Who will do the work that will keep our country economically productive? And,
  2. What are these people going to do with themselves for 50 plus years?

Here’s a condensed quote:

“I will start every day at the gym and work out for 2 hours. Then I’d practice the piano for 3 hours. I’d become fluent in Mandarin, learn to handle a polo pony and learn to fly a helicopter. If I didn’t have a job I’d be living my dream.”

Maybe it’s just me, but that sounds, well – self-indulgent. I don’t get it.

If you dislike your job so much that you want to “retire” within five or ten years, you need to find a more enjoyable career.

Final thoughts on early retirement

Perhaps early financial freedom is really the goal. I like the concept of “findependence,” a term coined by author Jonathan Chevreau.

Financial independence means you have sufficient resources to give you the freedom of choice, to sustain a lifestyle that allows you to pursue whatever truly makes you happy – to leave a high stress job for a lower paying one that’s more satisfying, take some time off for whatever reason, go back to school, or write a screenplay.

So, notwithstanding the obsession with extreme early retirement, the trend is edging toward a longer working life.

The Internet, cell phones, and video conferencing allow you to work from almost anywhere, and with new technologies, it’s only going to get easier.

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  1. Russ on March 24, 2015 at 8:57 pm

    Of the 16% who retired before 55 and subsequently died by 65, what portion retired due to poor health? If my hunch is correct that many of these early-retired, early-dead were indeed forced to retire because they were too sick to continue working, this outcome is not surprising. One should therefore refrain from suggesting that early retirement, apart from other factors, hastens death.

    • Boomer on March 25, 2015 at 12:54 pm

      @Russ: You are correct, but that high of a percentage can’t solely be due to people in poor health. I think it would also include those who were “early retired” aka downsized and people who identified themselves only with the title on their business card who wouldn’t channell themselves into other non-work related activities.

      I am definitely not suggesting that early retirement contributes to early death. But when people stop working they need something to interest and engage themselves, even if it’s just puttering around the house and garden.

      • tom on March 25, 2015 at 2:27 pm

        totally, boomer,
        before I retired, i made sure it was not a retirement from life, but a retirement from a paid job that provided value, to a series of non-paid jobs that provided value. I saw too many of my parents generation retire to sit in front of the tv and vegetate, waiting for their life to end to do that.

  2. My Own Advisor on March 25, 2015 at 4:40 am

    Interesting post Marie. I don’t I’ll ever “retire” (i.e., stop employment completely) but I certainly want financial freedom, the choice to work when, where and how I want.

    I don’t mind the condensed quote as I believe to have the freedom to live your dreams or live how you wish (as long as you are not hurting others in the process) is a tremendous gift. Life and time are precious after all.

    I’m not the type to obsessed over early retirement and then still, I don’t want to be forced to work until I’m 75. Somewhere in the middle is just fine by me!


    • Boomer on March 25, 2015 at 6:12 pm

      Mark, does that mean you won’t continue writing your blog after 75? I was looking forward to posts such as how you might change your portfolio and what you would spend it on.

  3. Travis @enemyofdebt on March 25, 2015 at 6:46 am

    “If you dislike your job so much that you want to “retire” within five or ten years, you need to find a more enjoyable career.” <—– YES, YES, YES. Finally, I find someone that agrees with my exact point of view on this. I read 8421 articles a week on how to save more money so I can retire early. I enjoy the hell out of my career, why would I want to quit? I'm all about becoming financially free….and I'm all about achieving that as soon as possible…..but if I really like what I'm doing in my career, why wouldn't I just keep at it and accumulate MORE wealth in the process?

  4. Robert on March 25, 2015 at 7:02 am

    The main problem I have with these discussions is the term “retirement”. Clearly it can mean a variety of things, including when CPP is started, when a pension plan starts, when a primary career ends, when a final career ends. I do not know what Stats Can uses as a definition.

    I retired at 60, meaning my primary career ended. I have a few other things to challenge myself that I am pursuing, even though I loved my profession.

    I never aimed to retire, but to be able to live without working so that I would be free to work at things that did not pay. Personally I do not find ” findependence” a useful word. Plain English works better when clarity is important.

  5. RBull on March 25, 2015 at 7:19 am

    Interesting article. Especially the 1890’s part, and the retirement age of 65 started by Germany.

    I believe financial independence is the most common goal now. Retiring early seems to becoming less common. We’re enjoying ours at 55 but had no desire to do this at a much earlier age. Obviously there is no right age for anyone.

    However ideally it would be nice if more people could go when they choose. Unfortunately it seems increasingly fewer people implement a plan to allow them more flexibility with financial independence.

  6. Jonathan on March 25, 2015 at 7:34 am

    I agree with Robert on this. For me, retirement doesn’t mean doing nothing. Working life severely restricts a person’s ability to pursue other interests. I want freedom to do things that interest me while I am still sufficiently healthy. Through hard work and frugality I have earned this choice. Unlike the author, I am not the least bit worried about how I will fill whatever time I have left.

    The author’s dismissal of early retirement as selfish and self-indulgent is too judgmental. In the past, people feared that old age would bring poverty or make them a burden on their family. So they worked as long as physically possible. But why hold that up as a norm that should still apply today? Society has progressed. We are never going back. Boomer and Echo should bring us positive views about life’s possibilities, not this regressive scolding.

    • Boomer on March 25, 2015 at 1:04 pm

      @Jonathan: First of all I have nowhere indicated that I’m worried about how I will fill my time when I’m no longer working. Where did you get that from?

      Secondly, I’m not putting down early retirement for those who want it (although I agree with Robert above that another term could be found).

      What I don’t understand is the concept of extreme early retirement – those in their 20’s and 30’s. How could they possible accumulate enough funds from presumably a starting salary by being frugal and saving for what would be 50 or 60 or more years. Having a polo pony and taking helicopter flying lessons don’t come cheap. From his other comments this fellow seems to just not want to work – ever. You call it judgmental. I call it questioning.

      • Beth on March 25, 2015 at 4:07 pm

        That comment reminded me of some advice I read a long while back about planning for the type of retirement you want. Everyone things their expenses will decrease, but in some cases they’ll increase if you take up expensive hobbies and want to travel the world.

        By all means, achieve early retirement with a frugal lifestyle — but think about whether that frugal lifestyle is what you want in retirement.

      • Jonathan on March 25, 2015 at 4:58 pm

        Here’s where I got the notions that the author (Boomer?) disapproves of early retirement and is worried about how to fill time when no longer working:

        “My questions are, however:

        1. Who will do the work that will keep our country economically productive?
        2. What are these people going to do with themselves for 50 plus years?”

        Also, “self-indulgent” is a judgment.

        Sorry if I misinterpreted.

  7. Tom on March 25, 2015 at 10:11 am

    There are retirement options that are not self undulgent. I ended up retiring at 62 , the average, and i chose to fill a lot of the time in volunteering, i drive cancer patients, i help in a family place, i help out people in several other clibs and organizations. Join your city emergency team. And i help babysit my granddaugter so my daughter can work.
    By the way it is us boomers Grandparents that spearheaded retirement, not our parents, my parents retired in the 80’s when retirement was already establishd by cpp and work pensions and rrsps

    • Boomer on March 25, 2015 at 1:06 pm

      @Tom: I thought I had made it clear that I was referring to 20 somethings, not 60 somethings. You obviously have carved out an interesting and engaging life for yourself that you enjoy, and I commend you for that.

  8. Tawcan on March 25, 2015 at 11:52 am

    There’s early retirement and there’s financial independence. What I aim to achieve is financial independence so I have the options and freedoms to decide what I want to do when it comes to a job. I think my definition of retirement is different than other people. I don’t think when you retire you should stop working and sit on the beach all day, you should still work on different projects to keep yourself busy.

  9. Ron on March 25, 2015 at 11:56 am

    I do believe in financial independence. That’s why when I retired at 54 I returned to work full-time five months later. I’m using this time to pay down the mortgage and other debts and plan for what I really want to do on my second retirement. I wasn’t really prepared for retirement then and without any clear objective, my time is better spent in the workforce for now.

  10. DivGuy on March 25, 2015 at 1:18 pm

    I think the concept of retirement as preached by Freedom 55 is outdated. Actually, the word retirement doesn’t mean much and all at the same time. I want to reach financial independence and do what I think is fun as a “work”.

  11. Beth on March 25, 2015 at 4:13 pm

    I’m aiming for financial independence. I’d like to keep working — I enjoy it — but I think people who plan to keep working indefinitely aren’t being realistic. I know people who were forced to retire early due to downsizing, disability or poor health. Or perhaps they retire to look after a loved one.

    Often times we don’t get a choice. Sometimes we have to make hard choices. Having financial resources means having options and having more choices.

  12. Alan on March 25, 2015 at 4:29 pm

    I know a couple who retired at 55 and have enjoyed an active and fulfilling retirement. Now that they are in their late 60s they are finding they have to watch how they spend their money, and have even chosen not to pay their property taxes, being content to leave a tax lien on their property to be paid when the property is sold. It works for them, but I hate debt and it wouldn’t work for me.

  13. DIANE on March 25, 2015 at 5:16 pm

    I retired in 2005 and now 10 years later, I wish I had waited. Unless you have many friends who are retired to do things with, then life can be boring. You need to keep very busy as a single person. Just saying, one needs lots of friends, and things to do, to keep preoccupied. Just saying, Think about what is so much fun, that you want to retire at a young age, especially if you are single and all your friends are working. It can become lonely and repetitive and boring. Trick is to keep on moving to be happy. And sometimes, that is not an easy task in itself.

    • tom on March 26, 2015 at 1:59 pm

      Yes, before you retire you have to think about what to do with your time. Plan not just the financial side but even more important is what to do with yourself. There are loads of things to do, but if you do not feel like doing anything but work, don’t retire (or work for home depot or what not part time)

      • mamma di on August 22, 2015 at 10:23 pm

        Yes. Great points but.. Please spell check. Cannot bear to read the misspelled words and run-on sentences. Thanks!

    • sue on April 6, 2015 at 5:08 pm

      Completely agree, so many men are obsessed w early retirement, my take is increased insecurities, constant internet connection w bad news, economic changes are common the only change is bad news (companies, colleagues) could get spiralled in seconds, too many noiss, tgen they get panick, more stress, modern men! I pity anyone who lives poor just to get a million before 30, 35, 40. You lost job, you will find another job, prob not something that would impress his linkedin followers, but work is the utool to live long, together w managing stress..I love saving but not to the point of frugal, I spend money for people I care, not to impress them but to celebrate spending time together and enjoy it. I think too many men are sadly dragged and obsessed with security, come on dont you have a slight experience that whatever happened you did finally overcome?

      • Tom on April 6, 2015 at 10:24 pm

        Sue, please do some spell or grammar checking before you post. I would differ , in my experience it is the women that are most anxious for security and stop working not the men. This may just depend on the type of person

  14. Mrs SSC on March 27, 2015 at 8:45 am

    My husband and I recently came to the realization that we aren’t trying to ‘retire’ early… but instead have a fully financed lifestyle change. Move from hectic, long-hours at the office, to a slower pace where we can really focus on raising our children, while possibly working a job we are passionate about (for me, teaching)

  15. Sean Cooper, Financial Journalist on March 27, 2015 at 4:46 pm

    I think the term “retirement” needs to be… well retired! I much prefer Jon Chevreau’s “findependence.” Who wants to work at a job you hate until age 65, count down the days? Not me!

  16. Gerard on March 29, 2015 at 7:41 pm

    If I’m reading Canadian actuarial tables right, 16% of *everybody* dies by age 65.

  17. Naomi (Logic_Lady) on March 30, 2015 at 4:17 pm

    I strongly disagree with this article. I am in my 20s and expect to retire around age 35. I think part of the problem is you are defining retirement too narrowly; a lot of what you classify as financial independence I would also consider early retirement. For example, if I am financially independent and quit work to write a novel or putter around my garden, I would consider myself in early retirement.

    To answer a few of your questions:

    I don’t think it’s selfish to stop working in my 30s. Most jobs aren’t saving the world anyway. If I don’t have to work for a living, I will have to time to make a real contribution to society, for example by volunteering.

    Who will do my job when I’m retired? Well, I’m sure there are plenty of people younger than me who will be graduating and looking for jobs. By retiring, I am creating a new job (obviously my job isn’t entry level, but someone will be promoted to fill my job, thus creating a vacancy in a lower level, and so on, eventually creating an entry level vacancy). People who never retire are hurting others because they prevent jobs from opening up. I think of it as not hogging a job once I don’t need it.

    For someone making a reasonable starting salary with reasonable raises, it is absolutely possible to save enough money to live off. It does not require “extreme frugality” or making big sacrifices. It does require being mindful of my budget and not spending money on stuff that doesn’t make me happy. Someone who saves 50% of their income can retire in 17 years. I know that sounds like a lot but for many people it is doable if you don’t get sucked into the consumerist trap. My current savings rate is actually higher than my goal (I save over half my income). The best part is if you are reasonably frugal you increase your savings and decrease the amount you need to live off in retirement at the same time.

    What do I plan to do when I retire early? I plan to have a kid or two–it will be nice to have the option to stay home without depending on someone else’s income. I may buy a house and spend some time renovating it or doing landscaping myself. I want to travel. Take some classes for fun. Learn a new language. Write a novel or two. Volunteer. Work if I want to, not because I need to. I will live frugally, and I find that this actually makes me happier (shockingly, always being up to date with the newest iPhone isn’t the key to happiness) and does not detract from my enjoyment of life. I will take bike rides and have picnics. (not necessarily in that order)

    I don’t hate my job but I don’t love it either. There are parts of it I love, but it can also be stressful and demanding. Unless someone is going to pay me to do whatever I want all day, I don’t think there’s any job that will be perfect. It might be nice to explore other careers, and I might do so either before or after I have enough money to retire. However, just because I don’t hate my job, doesn’t mean I want to keep doing it when I don’t have to; how many people would work for free?

    I have no interest in polo ponies or helicopters, but I think that everyone needs to decide what is important to them and budget accordingly.

    As for the correlation between early retirement and early death, some other commentators have already pointed out that it doesn’t establish causation, and there could be any number of possible explanations (including the fact that healthier people are able to work longer). In addition, it’s not clear that there is a correlation at all. More than 16% of all people die before age 65.

    • Robert on March 30, 2015 at 5:28 pm

      Well that is a refreshing post you created. I have no idea how you are able to have such a young target age, but I like the ideas and the attitude!

      I myself lived on 40% of my gross as a habit. I retired much later but had a nasty divorce and 3 kids to tend to.

  18. Edie on April 27, 2015 at 6:45 pm

    Hear, hear to the post by Naomi. My husband are in our early 50’s and live relatively frugally, but don’t feel we’re missing out on anything. We are debt free and looking forward to his retirement in ten years or so – financially he could do so sooner, but that’s the right timeline for the contributions he still hopes to make at work. I left my career almost 10 years ago to be a stay at home mom and do not regret it. At all. I’ve had no trouble staying busy with volunteering, pursuing interests and taking on some part time work when it made sense and was something I enjoyed doing. But I truly believe that had we known more about saving and investing when I was Naomi’s age, we would have both ‘retired’ 10 (or more) years ago. I’m a big fan of Mr Money Mustache (www.mrmoneymustache.com). his blog is packed with great advice on pursuing this goal and why one might want to. For your family, for the environment, for your community, for your health… and the list goes on. Good luck Naomi!

  19. abdul Durrani on July 30, 2015 at 4:38 pm

    I am 75 ans still work as a consulting engineer and educator, I do not work full time but part time and this keeps me healthy and motivated. I will keep on working as long as my health lets me carry on. I traveled all over the world as part of my work and money is not an issue thanks God.

    • Tom on August 1, 2015 at 10:57 pm

      Abdul, you sound like you have a nice job. Most people do not have such a job. Most cannot have the fortune. I had a good job, but it couldnt be parttime, and i couldnt travel or have control over my work, so i left early.
      Before one retires they should think about what one will do during the period.

  20. Dave on October 23, 2015 at 5:55 pm

    Well I hope to retire (semi) in about 2 years at the age of 58. I still have a young daughter to get into college so I’m committed to get her started, and I have a bit of debt to pay off that I don’t want in retirement. I would love to stay on (at my descretion) the job I have but the system here just wont accomidate regardless of the value I bring them. I bought a cheap place in a village in an area that I like so I can live on minimal income(my defined pention plan). I was keen on the idea of living in a developing country for the winter, but the real figures just don’t seem to be anywhere near what I’m told or read about. So I suppose I will have to be content with taking a short winter holiday and toughing out the rest of winter. But hey I’ve taken up writing so maybe it will be all good stuff.
    PS I think that no blue collar working stiff can possibly retire before age 55, at least I have never seen it done.

  21. Mike Pennell on February 12, 2016 at 11:55 am

    I have just “retired” at the young age of 52 after 35 years of service in the military. I know that I can get along with my half pension due to the fact that I have been mortgage free since I was 35 (buying and selling 10 homes helped a lot). I have been told by many that I am too young to retire. I have a BA and Masters but am now attending classes at a College to get a certificate in adventure guiding and pursuing qualifications to become a sailboat skipper. I know that if I live within my means I can accomplish my goals of travelling the world as I have saved enough to buy a sailboat and my pension will take care of expenses. The key was paying off the mortgage as quickly as possible in addition to putting away money for the future. I can now begin to tap into my RRSP, TFSA and other investments to enjoy my retirement. I plan to drawdown my RRSPs before I hit 60 since once I take CPP I will be in a higher tax bracket.One more note on what made my early retirement all possible was RESPs, they were the best investment bar none, a guaranteed 20% minimum return on my money and I put both of my kids through university/college from the RESPs. Start early, plan, have a goal and you will have success and should you desire you too can retire early. I must also say that having a mandatory retirement age of 55 was a huge incentive as well.

    • PIERRE DUCHAINE on October 13, 2016 at 11:21 am

      good post. I am all for early retirement, albeit not as early as you.

      Regarding you using your RRSP before 60, I do not believe that you are not correct. My understanding is that your CPP will never be affected by your income, whenever you want to draw it – however the OAS might be (partly) denied at 65 if your income is too high. (The reason is that CPP is funded by your accumulated contributions while the OAS is government money) .
      So you will have an extra 5 years to cash it in and convert it in saving, TFSA or use it.

      Correct me if I am wrong (pduchaine@gmail.com) – because this is my plan – retire early with a deferred pension using my RRSP before 65 so I do not have to give back (claw back) my OAS.

      • Tom on October 13, 2016 at 3:04 pm

        Pierre , that sounds much like what i want to do.
        Although, correct me if i am wrong, but if you have a lot of rrsp, you can defer your cpp and oas to as late as 70. Not just 65 and then get a larger cpp and oas

        • pierre duchaine on December 17, 2016 at 7:39 pm

          You are correct.
          However, I believe that the earliest the best.
          What will help is the possibility to transfer pension income to my wife and if need be, I will convert my remaining RRSP into a RRIF and then I can split with her to lower my total income line used to calculate the OAS clawback.

  22. derek holmes on December 16, 2016 at 2:59 pm

    I pulled the plug at 55 on a job I liked. I like retirement more. Don’t ever remember getting up at ten years old and wondering what I was going to do all day. Still don’t do that. A job pays the bills. I do not think it defined me. Paid off house, money set aside for kids University education, no debt of any kind. When I hear that shrill question, ” what are you going to do all day? ” I translate it into what it really means,” how come you get to retire and I don’t?”
    Didn’t see you each year in Hawaii. I was camping with the kids. I am really lucky, haven’t been conditioned to the point I consume for happiness. Never watched TV either and that sure helped. So keep working and buying stuff you don’t need. Just keep that certainty of death thing in the back of your mind.

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