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6 Secrets of Early Retirees


There are some people who want to work well into their 70s. Then, there are the rest of us.  Those of us who can’t wait to get rid of the boss lady, hit the golf course and just plain chill out for a few decades  – maybe with a smattering of part-time or volunteer work and some new hobbies thrown in. If you’re in this camp, a new study reveals how you can make it happen.

The Transamerica Center for Retirement Studies released a study showing what those who realistically plan to retire before age 65 are doing to reach their goals. “These aren’t trust fund babies,” says Catherine Collinson, president of the center. “These are everyday people with extraordinary habits.”

Below are the defining success factors of these soon-to-be “early retirees.”  They are more likely than the average person to:

  1. Save for retirement outside of just their workplace plan: 69% of early retirees do this vs. 60% of those who plan to retire after 65 and 49% of those who say they’ll never retire.
  2. Defer a high percentage of their salary into a retirement plan: Early retirees defer a median of 10% vs. 6% for those who plan to retire after 65 or don’t plan to retire.
  3. Start saving at a younger age: The median age early retirees begin saving is 25 vs. 30 for those who will retire after 65 and 31 for those who never plan to retire.
  4. Have a thought-out retirement savings strategy: 71% of early retirees have either a written plan (16%) or a non-written plan (55%), while just over half of those who plan to retire after 65 do and just one-third of those who will never retire do.
  5. Be very involved in managing and monitoring their retirement accounts: 71% of early retirees say they are very involved vs. 58% of those who will retire after 65 and just 45% of those who say they will never retire.
  6. Have saved the same amount or more since the recession began: 71% of early retirees are doing this compared to 61% of those who will retire after 65 and just over half of those who never plan to retire.

For more: The SmartMoney Retirement Planner


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    • I think the most important decision to retire early is to not have kids. You make more, and spend less.

    • My wife and I expect to retire in about 7 or 8 years, when we are around 57 years old. We do most of the points in the article. In addition, managing/avoiding debt has been a large reason for us. Not having consumer debt payments means being able to fork over larger percentages to our retirement plans. Living below your means and not buying the latest/greatest consumer goods keeps us out of debt for one thing.

    • Having retired this summer at 48, I can agree wholeheartedly with these findings. I became interested in money early on, and moved my passbook savings account to a money market fund when I was 17. That was also about the interest rate I was getting on that money market at the time! That little experience got me hooked. For the past several years, I deferred 20% of my salary to my 401k, split 50/50 between Roth and traditional 401k.
      My wife and I both also funded IRAs to the max allowed each year, and accumulated money in taxable accounts as well.
      I’ve never made the big bucks, but I ALWAYS lived below my means.
      That doesn’t have to mean big sacrifices though. We lived in decent houses, drove decent cars, had a computer or 2, TVs, cell phones, etc. We took vacations of some kind almost every year, and now have taken 2 vacations each year for the last 5 or so. Decide what you REALLY want in life, then make a plan to get it!

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.