Who came up with the number 65 as the retirement age for workers? While the law says companies can retire employees at 65, no law says people have to work until they reach that age.
There’s so much more to life to enjoy—why wait for retirement at 65? Imagine all the travel you can do in your 40s or 50s, the joy of seeing your family grow, spending leisurely time on your hobbies, reading books you’ve previously had no time for. When the pension was invented hundreds of years ago, people worked until they couldn’t anymore. With pension or the retirement fund that employees get from their companies and their personal plans, retiring at 65 became possible.
In the past decades, however, workers have been retiring much earlier to enjoy a life of travel, leisure, and one that’s free from work stress.
The FIRE (Financial Independence, Retire Early) movement was inspired by the 1992 book Your Money or Your Life by financial gurus Vicki Robin and Joe Domingues, which teaches people to change their relationship with money. It gained traction among millennials who wanted to eschew the traditional corporate life so they could enjoy living life.
Here are 5 ways get into the FIRE movement.
Because they want to stop working full-time early, they save up to 70% of their annual income and live on small withdrawals from their accumulated money. FIRE is not just for people who earn six figures a month. While it helps reach your goal earlier if you’re saving a more substantial 70%, it can also work with whatever you are earning now which will hopefully go up over the years.
FIRE is not just about financial independence, it’s also about consuming less while living a better life for yourself and the environment. “Endless desire is one of the pitfalls of human nature, and one of the first things you need to cure if you want to get ahead more quickly,” according to Your Money or Your Life. It also leads us to spend without thinking on things we don’t really need. A new designer bag? A weekend in a five-star hotel? These things can quickly deplete your bank account.
The upside of living frugally is that you’re fattening up your bank account and can put your money instead on investments, such as FWD Life Insurance’s Dollar All Set Higher, which invests your money in its pick of global funds or you can choose from a set of funds that suit you best. Another product that looks out for your financial wellbeing is Set for Life, which lets you grow your fund for lifetime protection and invest in diverse funds that have potentially higher returns than a traditional savings account.
FIRE movement inspired many millennials to avoid the path their parents took—working in offices and jobs every day that they didn’t really like—to buy a house, cars, and other things that millennials reject. The Harris Poll found that Google searches for “Financial Independence Retire Early” rose 96% from 2013 to 2018. Many millennials have embraced the movement to save, invest and quit the workplace.
This is a generation that, according to Blueboard CEO and co-founder Taylor Smith, prefers experiences to possessions. Millennials “aren’t spending our money on cars, TVs and watches. We’re renting scooters and touring Vietnam, rocking out at music festivals, or hiking Machu Picchu.”
Anyone planning for early retirement or financial independence should make sure that their plan is reasonable, doable, and leaves some wiggle room for what could happen, like health issues, tax hikes—or that the plan may be too extreme as your needs change over the years. This is why it’s good to have a back-up plan. One product you can consider is FWD’s Manifest, which lets you grow your money while giving you life protection so that whether it’s for your dream house or retirement, you can manifest your dreams with more ease and confidence.