This is a response to an AOL article that purports that early retirement isn’t worth it.

It’s Not Sustainable

“With extreme budgeting, there is no room for anything but the bare necessities, which is a plan that’s generally set up to fail.“

I agree with the premise, but not the conclusion. Yes, having no extra spending money at all is unsustainable. Why is that the definition of “extreme budgeting” and being able to retire early? That’s not my definition. $20 a week personal spending money and eating out once a month (as described in the article), is already extreme frugality to many. It depends on where you’re coming from though.

You’re Not Living in the Present

“[…] money to enjoy as many of life’s simple pleasures as you might wish […]“

The author of the AOL article defines life’s “simple pleasures” as going on a “real vacation,” buying gifts for your spouse’s birthday, Christmas or anniversary, and enrolling kids in extracurricular activities. But why should life’s simple pleasures cost so much?

Ah yes, consumerism. It’s obviously the issue here. Although a “real vacation” wasn’t defined, I assume it involves spending tons of money. In short,

• A real vacation doesn’t have to cost a lot of money.
• Buying gifts rarely gives pleasure to the receiver.
• Cheap extracurricular activities exist and should be used.

Vacations are fun because they’re about new experiences, about relaxing, about doing new things, and about being with people we love. All of those things can be accomplished while sleeping in a hostel instead of a 4-star hotel. Most of those things can be accomplished nearby instead of halfway across the world after an expensive flight.

Buying gifts is fine, but realize that gift giving is hard, creates more stuff, and ultimately is unlikely to make the other person as happy as they say it does. Ask yourself this, where are all of your gifts from years past? How likely is it that someone wants the exact thing that you’re going to give them? How likely is it that they want it right at Christmastime and haven’t already bought it for themselves? In general, people are notoriously bad gift givers.

After reading over this, as my wonderful wife always does, she insisted that I offer alternatives to gift giving, since I had the audacity to suggest not giving gifts at all. So here they are.

• If you’re crafty, make something.
• Write a handwritten letter telling the person why they’re great.
• Prepare a meal.
• Share an experience (hiking, skiing, a live show, a boat trip, go to a trampoline park, do a family bike ride, go on a hot air balloon ride, a train ride, an elephant ride, go swimming, volunteer, rock climbing, bowling, etc.)
• Give (get) a museum membership for the whole family.
• Make activity coupons. This is a homemade coupon book that can be used by the owner to do activities with another. Some coupons could be a massage (between adults), baking a treat together (from parents for kiddos), sweep the garage (from kiddos to parents), one free hug (anyone), one foot rub (anyone), one home cooked meal (anyone), a trip to the park (parents to kiddos), read a story (parents to kiddos), an ice cream treat (parents to kiddos), etc.
• Prepare a treasure hunt.
• Limit your children’s Christmas gifts to one thing they want, one thing they need, one thing to wear, and one thing to read.

These things work well for our family. We limit our kids’ gifts with the want/need/wear/read idea and we have a tradition of going on a hike together on Christmas day.

Extracurricular activities are great. If it’s going to break the bank though, it’s probably not worth it. I’m not sure how this made the list above. A YMCA membership is less than $30 per month ($35 in Hawaii) for a student. Some communities in the United States have recreation centers with free activities for kids.

It is possible to enjoy yourself and have fun without spending any money. If you search Google for “list of things to do for free,” there are 334,000,000 results. They’re not all winners though. Here’s a good one. Despite popular belief, you may have more fun doing something free instead of spending money on your typical activities. For example, you could spend $30 taking your family to see one movie for 2 hours, or you could see 30 movies for free from your local library.

Life After Retirement: It Doesn’t Get Any Better Than This

“[…] most of those who claim to have “retired early” continue to find ways to earn money post-retirement, even if the work isn’t full time. Otherwise, their quality of life would plummet, […]“

This is a common misconception. When you’re financially independent you can choose to work, or not. Yes, people can choose to work, for FUN! <Gasp!> It’s about having the choice, it’s not about avoiding work. If your goal is to never work again, fine. Otherwise, I’ll continue to assume your goal is to squeeze a maximum amount of pleasure out the life you have left.

With someone who assumes that “early retirement” means never working again, I have to wonder whether they’ve ever considered what they would do if money were not a concern. It’s like the high school guidance counselor scenario from Alan Watts. Find what brings you joy and do that. Financial independence is the freedom to do what you like with more security, less risk, and less worry. It creates more options and makes certain things easier. Watch this video for more explanation on this concept.

“Maybe you’d be able to claim that although you’re still earning money with your labor in your “retired” state, you don’t have to work if you don’t want to. Well, yes, but would you be able to support the kind of life you want otherwise?“

Yes. In those two sentences, either early retirement is misunderstood or the author’s math is wrong. The very definition of early retirement is being able to support the kind of lifestyle you want without working. Look at this handy calculator I created that succinctly displays the concept. On the calculator, when you increase the amount of money you’ll need for your lifestyle during retirement, more money is required to reach that goal. If you don’t have enough then you’re not ready for retirement.

“If you really hate working to the degree that you’d consider extreme budgeting for 15 years worth it, maybe the real answer is to find a different job or career.“

With the definition of “extreme budgeting” given above (never spending any money, ever), and the general dissatisfaction with life conveyed by the author, I have to agree with this statement. The point of early retirement isn’t to be as depressed as possible, it’s to enjoy life.

Listen, I know you think spending money makes you happy. It’s easy to feel that way – it’s what you’ve always done. Spending money feels safe, and warm, and it tastes like sweet five dollar coffee, but it’s not the only way. Safe, warm normality is not the best way to find happiness. There is more to life. You can do better.