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4 Ways to Retire Early by Cheating

This article was written by in Career and Work, Featured. 21 comments.


Save for the last few years, the extreme early retirement movement was gaining momentum. If the American Dream was homeownership, saying, “See you!” to your boss with a more colorful word choice was the American Daydream. Who wouldn’t want financial freedom at age thirty, spending the best years of one’s life doing only what they want rather than trading time and effort for a paycheck, through age sixty-five or later?

For most people, the idea of ending the rat race, leaving the safe corporate world behind in favor of financial freedom for five to six decades of one’s life, is going to remain a cubicle daydream. Without extremely diligent saving and a lucrative short career or some luck with business, extreme early retirement is out of the question. There are a few ways to get around this conundrum, though, without the excessive frugality or selling your latest start-up to Google.

I was fortunate to be able to say, “See you!” to my corporate boss recently, and while it may look to some people who don’t know my life here at Consumerism Commentary that I was able to retire, nothing could be farther from the truth. This is just the next level of working, like when you move from strawberries to bananas in Ms. Pac Man. I’m working harder, but so are the ghosts that are chasing me. I’m not as paranoid as that sounds.

Here are some suggestions for making that early retirement happen. So there is a common understanding, I’m taking “retirement” to mean “living off savings without the need to trade time and effort for income.”

1. Marry someone who is willing to work while you sit on your backside. I love this suggestion because out of the many writers who claim they retired early, more than a few have someone in the family still generating income for the household. If they have published a book about retiring early, they haven’t really retired, either. You could write a book while sitting on the beach but it’s still work. It may be enjoyable work, but nonetheless, if that is your situation, you haven’t really retired because you’re working for an income. You may not be doing the high-stress work you once did, but it is not retirement.

We’re in a two-income-family world right now, and I know very few people who would be happy to work for a living while their spouse sits back and spends the money that is coming in. That isn’t to say there aren’t people out there for whom this plan works, but I expect in those cases, the person who is choosing not to work does not have the capability to earn as much as the individual who is working or is satisfied managing the household.

2. Marry someone who is independently wealthy. Retirement is generally seen as the reward of hard work over a long period of time, but if you have the ability to attract a partner who doesn’t need to work for a living to afford a family, it’s a legitimate choice. “The Millionaire Matchmaker” is a popular television show wherein a successful matchmaker works with clients, usually multi-millionaires and multi-millionairesses, to find partners for life. Patti Stanger is the matchmaking star of the show, and the show is based on her service for wealthy bachelors. The company’s fees are quite high, although women can join for free. Single men are looking for love, and they’re willing to pay for help finding it.

Wealthy single women are in a similar position; the desire for a rich partner doesn’t discriminate by sex. With wealth comes the opportunity to choose from among many. If you want to be chosen and therefore have the ability to live without working, find out how to be in the right places at the right times.

3. Find a job doing what you love. In theory, if you spend your time earning money by doing something you love, you’d never want to retire. You would continue working until the day you could no longer physically or mentally carry out your job function. If you reach this point, then you may also be at the point where enjoying your retirement is impossible as well. The solution is to think about what you would like to do when you’re retired and find some way to earn a living doing that. For example, if you like traveling, work for a travel agency or produce series like Michael Palin’s travel documentaries. Perhaps more in line with twenty-first century trends, create an insanely popular and profitable travel blog.

In this case you are still working, but in this cheat, you’re doing what you’d imagine you’d be spending your time with in retirement.

4. Live your retirement now. While the stoic are saving diligently for retirement, putting away every penny they can to max out 401(k)s, IRAs, and any other saving vehicle available, a good portion of us will never make it to retirement. Not everyone lives well into their eighties or nineties. If you have reason to believe you wouldn’t have the opportunity to make much of your retirement, either due to your medical issues, hereditary concerns, or risky lifestyle choices, and if you’re not concerned about the financial independence of those you leave behind, stop wasting your precious time and start living.

Even for those who live to be 100 years old, life is short. If you want to live a life without any regrets, don’t put all of your eggs in a basket that may never come. It’s risky not to save for retirement at all, but you’re also taking the chance that you will live long enough to achieve all that you want to do.

If you’re willing to stretch the truth or take a different approach to living and earning money, you don’t have to wait until your sixties to retire.

Photo: Telstar

Updated December 22, 2011 and originally published January 13, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 21 comments… read them below or add one }

avatar tigernicole86 ♦55 (Newbie)

Oh, retiring early. A pipe dream for us 20 somethings right out of college. I can understand the approaches to all of the and I know some lucky people who have this because of their spouse/significant others who didn’t have to take out college loans(or are getting paid rather nicely to go to college). With the last option, my family tends to live into their 80s and beyond. Gah!

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avatar Early Retirement Extreme

You missed the sentence “Without extremely diligent saving and a lucrative short career or some luck with business, extreme early retirement is out of the question.”, of course Flexo didn’t expand on it since it wasn’t the point of this article, but …

5) With a diligent savings program and a median income short career, you’d have a very robust chance of retiring extremely early without cheating. It is indeed gaining momentum.

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avatar Investor Junkie

Related to this is passive income businesses you hear on some blogs and infomercials.

My neighbor once said to me I want to own a business that doesn’t require a lot of work. I almost died laughing when they said this. What business doesn’t require a lot of work (and/or capital)??

http://investorjunkie.com/4204/passive-income/

I argue there really isn’t such a thing as passive, only residual income. Are there businesses that make money while you sleep? Yes. Passive? No. That is the lore of late night infomercials.

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avatar Mike

It will be interesting to see if the definition of retirement is altered in the next 50 years. With the way that medicine, healthy living, etc is going, we may all be living until we’re 100. If we do, can the true “retirement age” be 55, 62, etc.? I think more and more people are going to end up either (a) working throughout their entire “retirement” period, or saying “Bye!” to corporate america and living a more entrepreneurial lifestyle at a younger age, when “work” doesn’t seem like “work.”

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avatar skylog ♦368 (Nickel)

you bring up a very good point mike, there very well could be a dramatic shift in many aspects of what “retirement” truly is in the near future.

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avatar SteveDH

I’m very lucky to have been situated (by birth – I guess) through the transition phase of our evolving retirement system. I’m old enough to have defined benefit plans (2), Social Security (2), but not so old that I didn’t get a chance at a 401(k). As companies drop defined benefit plans in favor of just 401(k) and cash contribution retirement plans, retirement planning needs to evolve and evolve quickly. Since income is not keeping up with the need for saving outside the diminishing benefits scenarios, more and more people will face longer working careers and less time in the “golden years”. Even the foundation of my retirement (USAF and its Medical Insurance) is under assault by those who want to push pensions out to an older and older age. CFPs need to base their strategies on the evolving “retirement” future.

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avatar tbork84 ♦1,867 (Half-Dollar)

The last option is fantastic. I certainly know my share of people who feel that they shouldn’t bother saving because who knows if they will live long enough to make use of it. I may be a bit on the pessimistic side, but planning on not living long enough to enjoy the fruits of your saving and labor, that is a stretch.

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avatar gotr31 ♦224 (Cent)

The best advice was to do what you love or at least just enjoy the ride. If you are always chasing the horizon you will never get there, even if you have money socked away.

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avatar brianahasmoney ♦367 (Nickel)

I plan on doing #3 and #4. I’m on a mission to do what I love, which includes living my retirement now. I can travel. I can be home. I can do whatever it is I want to do. Thanks to the 4 Hour Workweek (which I still need to finish reading) I can finally break out of the rat-race mentality and do what I love and waste no more time!

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avatar skylog ♦368 (Nickel)

i laughed out loud at number one, then i thought about it, and i think i actually know some people who are living this “dream” and using it as a viable option.

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avatar krantcents

I retired at 38 yrs old the first time. My wife kept working because she loves her career and it provided medical insurance. I returned to work for a variety of reasons, one of which was I was not prepared for retirement. For the last ten years I am in semi-retirement, teaching Business and Computers in high school. I love what I do (95%) most of the time. I think I am much more prepared for retirement this time and expect to retire in 2017.

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avatar Bogey

I could say maybe retiring after 20 years in the workforce, assuming the markets cooperate just a bit. I wouldn’t have to live a completely boring life either. There really are some great benefits for living in the central united states. The costs of living relative to my income here is a pretty nice ratio. It also helps that in the 4 years since graduating college my income has doubled, and my salary coming out of college wasn’t too bad.

I have a hard time thinking I would enjoying my hobbies as much if I retired around age 45 and pursued them full time. One of the reasons I really like to play golf is that I don’t get to do it all that often.

Its sort of like going out to eat. If you only do it occasionally, its a treat, but if you do it every night, it becomes routine and the perceived value diminishes.

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avatar Jackie

I’ve got to disagree with you on extreme early retirement being out of the question now. It’s definitely not, but the “extreme” part of it is what makes it still doable. You can live on very, very little if you plan things out to do so (and are willing to risk being bankrupted by a lack of health insurance, or live somewhere where health care is a right.)

For me retirement will be more a way of saying “I’ve stopped depending on having a full time job AND I’m traveling around the world more regularly.” But I imagine I’ll always be poking into various things that make money if possible, because I enjoy it.

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avatar Early Retirement Extreme

I’d recommend a high deductible health insurance plan. Losing tens or hundreds of thousands, i.e. all the savings that made early retirement possible, over a hospital visit is not worth it. HDHPs only cost $100/month, so you’d only need to save and invest $40,000 to support the premiums perpetually.

However, do make diet and exercise part of the plan to keep outlays low. 70% of health expenses are now lifestyle related—it’s ridiculous.

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avatar Jerry

Jackie’s right about being bankrupted by a lack of health insurance. Only when it becomes a right will it be a possibility for people to lead comfortable lives.

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avatar Will @ HackingTheBank.com

I think that for many people (or maybe just me?) the job we would love to do either doesn’t pay well, or is risky. In order to get to that point we need to make the correct financial decisions while in the rat race.

I like the fact that you chose to define retirement in the same terms I use. When I first talk to friends about retiring in my 30s they immediately tell me that I’ll get bored. Most don’t seem to correlate retirement with being financial independent, but rather with being old and not working (which I guess is the traditional definition).

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avatar Laure ♦198 (Cent)

My dad retired at 62. I imagine I will work until I drop, whenever that might be.
I appreciate your pointing out that an author who writes a book about retiring early is still working. I hope to someday be able to have sufficient investments to be able to change what I’m doing, rather than frantically trying to make enough to pay my student loans plus still live.
Also, although you make the point regarding two-income families…I know licensed professionals where one spouse is staying home to care for children/home….usually where many children (6+) are involved. Financially, there comes a point where child care, etc. would be more expensive than what even a professional would bring in, and this point seems missing from your post.

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avatar eric ♦1,549 (Half-Dollar)

Find someone grotesquely rich….check. :D

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avatar DonnaFreedman ♦55 (Newbie)

I haven’t had a square job since November 2002. For two more years I was freelancing but had a still-employed spouse who brought in significantly more than I did. Then I left the marriage and haven’t worked a regular job since, except for one summer fill-in at my old newspaper job.
I guess I’m a mix of #3 and #4, because although I’m still freelancing it’s work I love (writing) and it’s work I can take anywhere as long as I am organized. That’s where the #4 part comes in: I’ve been traveling a lot since obtaining my university degree, spending only about three months at home in 2010. It looks as though 2011 is shaping up along the same lines.
In order to make the books balance I have to sacrifice in other ways. But I love my life the way it is and as long as I can afford health insurance and retirement savings I’ll keep living it in this way.

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avatar Ceecee ♦53 (Newbie)

There is some merit to #4. It’s great to put money away for old age, but to find a balance of how to live now as well. You might need some great memories to look back on….who knows. (Donna Freedman has the right idea!)

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avatar Kathryn C

Just got this as a RT from Rob_Bennet…missed it originally.
Hold the bus, you’ve been working in the corporate world until just a few months ago? I thought CC was your full time gig. Wow, I’m not trying to sound like a brown-noser but I’m very impressed. I think I need to pick up my Tim Ferris books again.
I’m curious what the final straw was that made you comfortable with ditching “The Man.”

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