What does it mean to 'Retire Early'?

[Offgrid Organic Farmer]

What does it mean to 'Retire Early'?

I have read many threads here where people are targeting their 'early' retirement to line-up with when they are mid-60s and start getting Social Security.

How is that 'early'?



You save and invest for years, and you want to retire someday. I get that. You project your finances into the future, and you see that when you start receiving SS payments, then you will suddenly be able to retire. But how is that 'early'?

 

[HFWR]

Not much different from those with 7-8 figure portfolios wondering how they’ll ever get to retire, or worrying about their SWR to the third decimal...

Even though this is an early retirement forum, many of the topics are pertinent to others not blessed with “early” retirement.

 

[Gumby]

Are you currently happy with your life? If yes, then don't worry about whether you fit someone's definition of "retired" or "early". Conversely, why does it matter to you how old someone else is or whether they are really "retired"? I say, let's all pursue our bliss and wish for others to pursue theirs. Happiness can abound if we let it.

 

[youbet]

Even though this is an early retirement forum, many of the topics are pertinent to others not blessed with “early” retirement.

Well put.

Indeed, retiring in your mid-60's, as OP said, isn't really retiring early. Even at 58, when I fully retired, I didn't really consider it early. But that doesn't mean that those of us who didn't pull the plug in our 40's or early 50's can't be contributors to discussions or benefit from what others share.

 

[Midpack]

Are you currently happy with your life? If yes, then don't worry about whether you fit someone's definition of "retired" or "early". Conversely, why does it matter to you how old someone else is or whether they are really "retired"? I say, let's all pursue our bliss and wish for others to pursue theirs. Happiness can abound if we let it.

+1. I could care less what someone else calls "retired" or "early" - but I realize there are some here who must have some official definition, and are put off if someone else has a different definition. I can't imagine why, but knock yourself out if you do. If pressed I’d say anything before 65 is early, but I wouldn’t spend a second debating it. As for “retired” - whatever.

 

[Calico]

I'm just going to save myself the time I would have spent reading this thread:

 

[youbet]

+1. I could care less what someone else calls "retired" or "early" - but I realize there are some here who must have some official definition, and are put off if someone else has a different definition. I can't imagine why, but knock yourself out if you do...

I tend to agree. I find the only inconvenience created by the varying definitions is that initial responses and reactions might be made based on misunderstood circumstances. An example might be when someone refers to themselves as retired early with no issues and later reveals that he/she has a high-earning working spouse. That's all fine but when someone states that healthcare and income are no issue even without SS, pension or FIRE portfolio without mentioning the working spouse, it gets confusing or even misleading. So, define things how you wish, that's fine with me, but clearly state your personal circumstances so we know where you're coming from.

 

[Red Badger]

Are you currently happy with your life? If yes, then don't worry about whether you fit someone's definition of "retired" or "early". Conversely, why does it matter to you how old someone else is or whether they are really "retired"? I say, let's all pursue our bliss and wish for others to pursue theirs. Happiness can abound if we let it.

+1.

Also, retirement for many borders on subsistence living. I see that where I volunteer. Some made poor decisions, other were dealt a sh!tty hand called life. Some were let go in their 50's during the great recession, and a mortgage, car payments, and routine bills evaporated their already cratered 401K. I think anyone who retires financially secure with reasonable health has "won the game," irrespective of age. YMMV.

 

[Gumby]

I tend to agree. I find the only inconvenience created by the varying definitions is that initial responses and reactions might be made based on misunderstood circumstances. An example might be when someone refers to themselves as retired early with no issues and later reveals that he/she has a high-earning working spouse. That's all fine but when someone states that healthcare and income are no issue even without SS, pension or FIRE portfolio without mentioning the working spouse, it gets confusing or even misleading. So, define things how you wish, that's fine with me, but clearly state your personal circumstances so we know where you're coming from.

That is a very fair request.

 

[ShokWaveRider]

I would say anything earlier than 65 pretty much. We retired when I was 50, I consider that early.

 

[Mdlerth]

What is early? How long is a rope?

In the HR Policy Manual on Retirement at my Megacorp, it specifically states that the Standard Retirement Age, at which time an employee may retire and begin drawing benefits, is 65. Under certain conditions, an employee may terminate before age 65 and still be eligible to commence some benefits under a provision called the Early Retirement Program.

Therefore, by one definition from an authoritative source, "Early" Retirement is anything before one reaches 65.

This distinction isn't just a semantic exercise, it has legal repercussions. Some of the company benefits become vested, such that they can not be withdrawn by later generations of management trying to save a buck. The Standard Retirement benefit is a vested one, the Early Retirement provision is not.

 

[youbet]

In the HR Policy Manual on Retirement at my Megacorp, it specifically states that the Standard Retirement Age, at which time an employee may retire and begin drawing benefits, is 65. Under certain conditions, an employee may terminate before age 65 and still be eligible to commence some benefits under a provision called the Early Retirement Program.

Therefore, by one definition from an authoritative source, "Early" Retirement is anything before one reaches 65.

This distinction isn't just a semantic exercise, it has legal repercussions. Some of the company benefits become vested, such that they can not be withdrawn by later generations of management trying to save a buck. The Standard Retirement benefit is a vested one, the Early Retirement provision is not.

The age requirement varies from employer to employer however. Some employers, especially public employers or the military, have lower age requirements for so-called "full retirement," standard retirement" or "normal retirement" (whatever it's called at your place). At my Mega, you could begin your pension at 55 with reduced benefits or wait until 65 for full benefits with a sliding scale in between.

You have a specific definition for your employer. I think the semantics come into play when talking about a more generalized definition of retirement in general and early retirement specifically.

 

[The Cosmic Avenger]

I agree with your sentiment, as 65 has long been the standard (and sometimes mandatory) retirement age, but it may be that people are stretching the definition of "early" because they see more and more people having to work well into their 70s and beyond just to make ends meet. It doesn't make it any more appropriate, but that sobering fact bothers me more than the possible misuse of the term.

 

[martyp]

My arbitrary definition would be anyone who doesn't need to work before the earliest age you can collect US Social Security, 62 years old. This leaves room for those who have achieved financial independence but are still doing something they love while technically earning a paycheck. In my case I formally retired, by my choice, from my workplace at 55 years old in 2011. Certainly by the reaction from the people around me, my family, former work colleagues, friends and acquaintances I would say I retired early.

 

[youbet]

My arbitrary definition would be anyone who doesn't need to work before the earliest age you can collect US Social Security, 62 years old. This leaves room for those who have achieved financial independence but are still doing something they love while technically earning a paycheck. In my case I formally retired, by my choice, from my workplace at 55 years old in 2011. Certainly by the reaction from the people around me, my family, former work colleagues, friends and acquaintances I would say I retired early.

What's the difference between "technically earning a paycheck" and "earning a paycheck?"

 

[martyp]

What's the difference between "technically earning a paycheck" and "earning a paycheck?"

I mean that you don’t need the money. You are financially independent. That doesn’t mean you can’t do something that results in people paying you.

 

[Boose]

I visit this site for the perspectives and info shared by Americans who have retired before reaching Medicare age. That, to me, is early retirement - having to figure out how to pay for everything that your employer covers when you're working, and the government takes care of when you're old.

 

[scrabbler1]

In response to another thread back in April, I wrote this about different age ranges for various levels of early retirement:


"I would say there are different levels of early retirement. At 65, you are eligible for SS and Medicare. At 62, you still eligible for SS but not Medicare. At 59.5, you can tap into your tIRA but are not eligible for SS or Medicare. At 55, you can access your 401k if you have just separated from your job but can't access SS, your tIRA, or Medicare. Before 55, you can't easily, if at all, access your tIRA, 401k, SS, or Medicare, forcing you to rely solely on your taxable account for several years while buying HI through the ACA (like me)."

 

[Pumko]

M

 

[FI_RElater]

What's the difference between "technically earning a paycheck" and "earning a paycheck?"

l get "paid to stay away" (ie, pension)... is that "earning a paycheck"? (I sure had to "earn" the benefit over a few decades!)



{AFA "early"... I retired at 59... not exactly "early" by many on the forum... hence username. }

 

[Dtail]

I would say anything earlier than 65 pretty much. We retired when I was 50, I consider that early.

+1
We retired when I was 57. Could have been earlier if I knew back then what I know now. Still nothing better.

 

[Nemo2]

Early Retirement? Any time prior to 4:00 a.m.

 

[harllee]

I retired at age 52, DH retired at age 50. We are now both age 68. Health insurance before Medicare was a big problem for us (pre ACA) but other than that we have loved every minute of retirement. I think with ACA for health insurance it would be much easier for people to retire before 65.

 

[Chuckanut]

For most people (not only those who visit this noteworthy site) I believe retiring before their SS Full Retirement Age is early. I retired slightly before I hit 62, and thus consider myself comfortably in the area of early retirement. However, I realize compared to those who retired in their 50's I am a old guy.

Only once did I have a member of this site tell me I was not retired early enough to claim FIRE status. His opinion was noted.

 

[MRG]

We're on an early retirement forum yet there's no consensus about what is "early" or "retired". I'm okay with that, time to go watch it snow.[emoji3]


My impression is early comes before your FRA and retired is not exchanging work for a paycheck.