Why You Shouldn't Plan to Retire at Age 65
Most traditional retirement advice columns I read are written as a guide to retiring in your 60s. Although the advice contained in these columns may be useful to some, I think that no one should count on retiring in their 60s — you should plan to retire earlier.
A typical retirement guide advises that you should have the equivalent of your salary saved up by age 35, and two times your salary saved up by 45. These are good goals if you plan to work until you are 65 or later, but personal issues like an illness could easily take you out of commission. Additionally, because there is really not much job security anymore, even if you wanted to keep your job for 40 years, there is no guarantee that you will be able to. It is best to save as much as you can while you have a steady income so that you can retire early if you are forced to.
For those who have a pension, it is still a good idea to save as much as you can because pension programs are being cut by many companies, and even governments, due to lack of funds. There is also no guarantee that you will be able to work until your pension is vested. I have heard of situations where employees were fired just a year or two before their pensions vested. If these people were betting on the pension and did not have personal savings, then they could no longer afford to retire.
Personally I am not planning to retire at age 65 because I just think the idea that most people have to work 45 years or more is ludicrous. I feel that these traditional retirement planning guides reinforce the idea that you must work until you are past 60, and that is just not something I plan to do. I plan to retire much earlier than that and spend more of my life as I want it.
Personal finance is personal, and you have the choice not to follow the masses. You can retire early if you want to, but it will take a mindset that is considered abnormal by the mainstream.