Economic Perspective: Retiring Early

NC State College of Agriculture and Life Sciences professor Dr. Mike Walden working in a recording studio.


“Today’s program looks at retiring early. Mike, it’s been reported that many young workers today want to retire early; maybe before they hit 50. Now I don’t know if there are relatively more people today who want to stop working early, but I do know much planning and sacrifice would have to go into meeting that goal. Give us an outline of a retire-early plan.”


“Well first many people say that this notion of retiring early, and it seems it has gained in popularity as related to the Millennial generation’s interest in thrift, and they do appear to be a little more thrifty maybe than previous generations. But that’s good because you’re going to need a lot of thrift to pull this off.”

“And really there are two problems here: saving enough money so that you can retire early, and then making sure you’ve got enough money once you do retire to live until your retirement years. So thrift is going to be the keyword here.”

“Many who have looked at this in a serious fashion say that if you want to retire, let’s say by 50, you may have to save 30, 40, maybe even 50 percent of your earnings which means you’re not going to have a lot to live on, you’re not going to have a lot of fun. You’re simply going to survive.”

“So then you have to set up a system, maybe it involves something called an annuity, where once you have that retirement pot at say age 50 to retire you’re able to draw down on that, and live reasonably well. But again you’re probably not going to live as well as if you worked until say 60 or 70. So you’re probably going to have to be thrifty even in retirement.”

“So recognize that this is a great goal for many people, but you’re going to have to make adjustments in your lifestyle both going into it as well as when you retire early.”

Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.

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