There’s a brilliance to dedicating yourself to a retire by 50 plan. The brilliant part that’s overlooked by naysayers is if you do it right, you can’t lose. It goes beyond the obvious financial aspects. It also allows us to mentally approach work with a healthier mindset. That then leads to enjoying both work and life on a higher level. 

I constantly thank my younger self for having the insight to go against normally accepted societal work and consumerist practices. My younger self instead pursued financial independence with the goal of retiring earlier than the traditional age. Something positive happens when we take control of our lives. Especially when we do so with our financial life. It provides a healthy focus and ultimately power. 

I was happy to read about how Millennials want to retire at 50. They’re now in or nearing their forties. I was 40 when I had the same burning desire. The article eagerly focuses a bit on the obstacles. It wasn’t easy for me to retire early and it certainly isn’t easy now. So what? Anything worthwhile is never easy. 

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Done Right, You Can’t Lose With A Retire By 50 Plan

This is what I found to be the best part. Even if you fail you’ve still won. Doing something is always ahead of doing nothing. Setting oneself up through a retire by 50 plan pays off long before reaching the goal line. It does take constant monitoring of not only progress but feelings about how we are living. 

One of the biggest naysayer talking points is having to waste your life in voluntary poverty in order to save enough to pull off early retirement. Here’s the problem with that nag. If done right there is no feeling of poverty or feeling of a deprived lifestyle. Naysayers should worry more about living in fear of losing a job. Fear of putting up with workplace garbage in desperation to work until old age. Fear of worrying about where to get money in an emergency.

We set ourselves up both mentally and financially while we’re doing it.

Frugal adaptability, living a non deprived lifestyle. 

Nobody should dedicate themselves to a retire by 50 plan that leaves them feeling they are living a deprived life. There will always be tradeoffs. The great thing is we get to decide for ourselves what we want and the way to get there. All is defined by us.

I found that we could still live an enjoyable life while cutting wasteful spending, eliminating debt, and setting aside money for our future. When my family or myself felt it went too far, we scaled back. When things changed and we could cut something that wouldn’t be much missed, we then did so. Frugality is different when you do it with purpose. It’s a major form of taking control. It will change over time in both what we do and how we do it.

My salary never made it to 6 figures. Frugality was a must to succeed with my retire by 50 plan. The lower the cost of my self defined happy lifestyle, the more I could save from our income to eliminate debt and invest. Creating a lower cost of living also means needing a smaller portfolio size to support it once retired. 

Divorcing our identity away from our chosen career.

It is too easy to get wrapped up in our careers. We educate, learn skills, gain experience, and work hard to advance. But it’s also easy to mentally frame our identity around our work and career accomplishments. Dedicating oneself to a retire by 50 plan starts the mental process of seeing our career as the means, not the ends nor our life focus. 

Starting my early retirement plan began my understanding that my work is transactional. It’s not a marriage of mutual interest or loyalty. It was always that way, but I found myself believing otherwise while leaning into my career over the years. 

I was painfully disappointed many times during my career thinking that it was a fair exchange based on long standing rules and promises. I wasted many years in obedience to a false employment perception and could see there are no real rules requiring the honoring of agreements when you have no power to enforce them. Getting our head straight about this aspect is the first mental step to work identity liberation. It will ultimately help us during our retirement transition once we ditch the rat race too.

The can’t lose fact: We will be far more financially ahead than if we had not made this decision.

Even if we miss our savings goals we’re miles ahead of where we would be if we hadn’t been on the retire by 50 plan. I was 9 years into my 10 year plan when the great recession hit. A year later at age 50 my target was missed because market conditions caused a diminished portfolio but I was way ahead of a lot of desperate working people in a time of constant layoffs. 

There is no way to know how we will feel, what we will be doing, or how the economy will be in the future. It’s a lot easier to come out on top if we stay on plan and have the options that come from living a financially disciplined life.  

Hustle- Chasing money will transition to chasing interests and passions.

When I was climbing the career ladder I felt like I had to put money ahead of all other decisions when it came to work. Work overtime, take extra shifts, second or third jobs, accept unpleasant tasks, whatever it took. I couldn’t turn away a chance to bring in extra money to make ends meet. Nor say no because it might tick-off the boss. As my retire by 50 plan was fully engaged with measurable progress it became easier to be choosy about what I would lean into. 

I still had a desire to accept opportunities to earn extra money or advance my position and salary. But I didn’t just accept anything because I no longer felt desperate to do so. I became focused on aspects I like doing, wanted to do, and wanted to learn more about doing. Within company work guidelines, I was mentally freed to easily reject any unpleasant assignment. I found that I was able to care less about management’s feelings and confident in knowing another opportunity that was better aligned with my goals would come.

Redefine retirement- Working in retirement is easier when retired in your 50s.

It’s time we redefine retirement, especially early retirement. Retirement is the absence of needing to work, not the absence of working. Having a retire by 50 plan allows us the time to earn skills and direct our attention to making ourselves attractive to opportunity if we choose to pursue them. Whether to start our own business or do as I did and seek opportunity into other fields that we had passion and interest in learning and doing. My early retirement work was very rewarding. The time working through a retire by 50 plan can be useful in preparing for this retirement definition shift. 

There’s no shame in missing an age 50 date.

Retiring by 50 is not easy for most people. Salary constraints, debt issues, economic shifts, market volatility, and the cost of living where one lives comes into play. Something all the naysayers lean into. The age 50 is a goal, not a measurement of failure if missed. The brilliance of this target is it gives us time to fine tune and define what success will look like while we’re on the path to try to meet it. Something that will shift as we live our lives, experience new things, and we age. 

The Nothing Tricky Financial Side of Things- The way I started my retire by 50 plan

There are all kinds of advice and metrics that are recommended on how to develop a retire by 50 plan or any financial independence plan. Some are basic and others seem extreme or unattainable because of our own unique economic factors. Personal finance is uniquely personal. When I started my FIRE journey there was little internet or anything on the internet about it. There were few books on the subject. Here’s the high-level approach I took.

Build an emergency fund.

The conventional advice is to save 6 months worth of expenses in an emergency fund. Great if you can, but if you can’t don’t let that stop you. 

I started with a target of 6 months housing, not full lifestyle expenses. In my case it was a modest mortgage payment. The idea was if I lost my job I could get by until getting back on my feet with unemployment or temporary work. 

Setting emergency savings goals at different levels was the way I approached this. I felt that it was important to cover the other necessary personal finance aspects too and not go all in exclusively on a full 6 month emergency fund first. I dropped this to a small monthly allotment until I could ramp up emergency savings amounts as the other retire by 50 plan goals were met. 

Eliminate debt.

One of the reasons I was slow to build a respectable emergency fund was I had debt to clear. We were good to avoid a lot of credit card debt at this point in our lives but with a family there were always the occasional large financial hit that caused me to tap an equity line of credit against the house. 

Our debt load was eventually reduced not only by a dedicated amount from income but also by savings from making lifestyle changes through frugality. Debt was a primary target of earnings to resolve first. One of my delayed emergency fund goal relief thinking was that if the worst happened I could still access needed money from the line of credit that I was paying off. 

Set and Work Towards Meeting An Overall Savings Goal 

I had dug into defining our lifestyle costs over a number of months while setting aside money. When it was time to figure out an overall retire by 50 savings target, I sought the help of a financial planner. I was not saving enough and wasn’t saving it in the right places or allocations to meet my early retirement goal. It was hard to squeeze more out but we found it was there all along. With having solid direction it was easy to dedicate ourselves to the plan.

The Goal Of A Maxed out 401K.

The first rule I accepted regardless of my income level was If your employer matched a percentage of your 401K savings, then you have to at least do that. Mine at first was a measly 100% match of my first 3% of 401K savings. Not doing it was leaving money on the table. I started at this small percentage earlier in my career but bumped it up to 10% which was where I was at when I chose a retire by 50 plan. 

While I was still working on the other goals, I began adding about half the amount of my yearly salary increase to 401K allocation increases. As debt was cleared and emergency fund goals were met I was eventually able to set aside the allowed 401K maximum yearly allocation. When the IRS raised the allowed threshold I also increased my allocation. It is important to invest early because time is our greatest ally and the more we have invested the more time helps us. 

Maxed out IRA and Roth IRA strategy. 

My wife and I never made enough money to limit our participation in side funding an IRA or Roth IRA alongside 401K savings. Once I was meeting 100% funding of my 401K I started funding an IRA and Roth IRA. I initially split the yearly maximum IRA limit between the two types for both my wife and I. 

Because contributed Roth IRA amounts can be accessed if necessary without penalty or tax, I later funded the yearly maximum amounts into our Roth IRA accounts instead of splitting it with IRA contributions. I saw the Roth as another emergency fund source although that was not its primary retire by 50 plan objective.

Began non-retirement account savings and investments.

I eventually added a non-retirement investment account. I chose a stock mutual fund through a financial planner I was using.

Leveraged my skills for better pay. 

I became a courageous salary negotiator. My journey and shifted goals toward early retirement allowed the time to open my mind to see things from a different place. I went from going with the flow at all costs to advance my career, to challenging management misdeeds to secure the higher income that I earned so I could further feed my retire by 50 plan. 

This also reduced workplace disappointment. It was replaced with the strength to demand what was promised if I held up my end of any bargain. My growing portfolio and financial confidence provided the power to leverage my skills and accomplishments. 

Having my well won financial backing allowed me to stick up for myself without fear of job loss or worry about any quiet firing tactics. 

Establish an early retirement funding strategy.

My portfolio was primarily behind 401K and IRA accounts. That meant getting required retirement funding at age 50 without early withdrawal penalty by using a SEPP 72t arrangement. This substantially equal periodic payments scheme allowed me to start receiving monthly checks from my IRA at age 51 without penalty and only paying normal income taxes. A sort of  backdoor approach to fund early retirement. When I took on paid work I would live off of my retirement income. Then i’d invest all of my work earnings back into my net worth. 

Having an early retirement healthcare strategy.

Of all the early retirementment costs that await us, healthcare is most likely the trickiest. What I paid when I first retired 13 years ago and what I pay today is beyond any of my planning.

This one is tough because things can change over the duration of our early retirement journey. The way I see planning ahead for a retire by 50 date is to stay informed about early retirement healthcare, learn the ins and outs of the ACA, and vote in your future’s best interest. 

If There Is A Trick, It’s This-

The trick is to have the discipline to knock out the primary goals and increase retirement savings as soon as you can get to it. But at the same time finding a happy medium living your defined efficient and enjoyable frugal lifestyle. If the word frugal is a turnoff, use purposeful.

It is a choice to live a life of optimism based on actions taken instead of just hoping it somehow works out. It’s optimism based on our financial investments and investments in ourselves through solid personal financial discipline.

The best part of being dedicated to ditching the rat race while young is we get to determine what lifestyle meets our needs and allows us to still live a happy life. We can practice and refine it over time. There are no hard rules and if you screw it up it just means a retirement delay. Understanding what our enjoyable retirement lifestyle would be like and what it would cost provides enormous motivation and confidence in knowing we have a solid financial target.

The brilliance of a retire by 50 plan goes beyond actually reaching the goal. It is the way that it trains our brain to see life, spending, work, and power differently. We can improve our lives while on the journey. Even if we fail to hit our financial target by age 50 we still win. We are closer than if we hadn’t and it’s surely better than failing a risky work until 70 retirement plan.