Retirement may seem a long way off for most people. However, there are some great alternatives that you can do right now so you can live for less, save and invest more money and enjoy life more.
The FIRE movement is focused on saving and investing 50% or more of your income and trying to be financially independent enough that you have the option to retire or not work as soon as possible, which typically takes about 10 years.
I recorded a video about my experience with the FIRE journey and how I hated early retirement. As a follow up to that video I think it’s worth exploring alternatives to early retirement because, frankly, not everyone wants to sit on the beach and drink martinis, which is the typical view of retirement. That is, doing nothing.
In fact, most people who retire early end up going back to work. The same goes for people who sell their companies or who are making a lot of money working. If you’ve ever wondered why LaBron James keeps playing the grueling and brutal game of basketball or why Jamie Dimond continues to run JP Morgan Chase or why Elon Musk runs so many companies and sleeps on the floor of his office, the answer is: they like it. The same thing goes for us.
As much as we talk as a culture about work/life balance and how dreadful Mondays are, people who are lucky enough to find a job they love, or even like, actually enjoy going to work. They enjoy being around people, being engaged in a meaningful product, creating something new, being part of a team, etc.
So if the idea of doing nothing in retirement (at any age) sounds dreadfully boring to you, listen up because we’re going to explore some alternatives that may be a better fit for adventurers like us.
The great thing about all the options on this list is none of them needs to be permanent.
A recent article in the Wall Street Journal talked about how we’re living longer and hopefully healthier and a 60 year career may become normal. However, not the kind where you climb the corporate ladder but change careers, take a break, switch jobs or even a totally different profession, become a freelancer and basically continually mix things up.
If working 60 years sounds dreadful to you, it may be time to rethink your concept of work. Let’s talk about some ways to make it more fun.
Sometimes you just need a break. Americans don’t get a lot of vacation days to begin with and most don’t even take half of them. No wonder so many people are burnt out. We’re working around the clock, even when we’re at home or on vacation we feel like we need to be available.
One solution is to find a company that appreciates work-life balance and doesn’t expect you to be constantly available. In fact, around the world shorter work days and work weeks are starting to become popular, which actually benefits both the company, by increasing productivity, and the employees by increasing their satisfaction and happiness.
Second, take all your vacation days and turn off your phone and emails. Your company will be just fine without you. Don’t let your ego or your boss tell you otherwise.
Third, take a long vacation or mini-retirement. There are companies that will work with employees taking some time off. If yours isn’t one of them, consider switching jobs and taking a few months or a year in between jobs. Of course, you need to save up for it, but it’s a great alternative to retirement.
My wife wants to take 3 weeks and hike the El Camino in Spain. With a typical career you can’t do that. Of course, it takes planning and saving, but it’s possible to work for a while and then play and go back to work.
Just take a break, reassess what you’d like to do with your time and then take time finding a job you like. That’s the benefit of having some F*** you money. The more F*** you money you have, the more options you’ll have to accept the kind of work you like.
Maybe you don’t have enough to retire, but strive to have enough to have more options much sooner.
I just saw a post from a company I follow that offered a job for 90 days. The post said it was an intense job and will be highly rewarded for the right person. This is going to become more and more common. Long gone are the days of working 40 years for the gold watch. The workforce is getting more mobile geographically and between companies and even careers.
Work on a project for a company for a time and then move on. Like a mercenary. If this is interesting, then you’ll need to focus on building skills that are unique and in demand so companies will seek out your expertise and you’ll be able to call the shots and work on your schedule and somewhat set your salary.
Did you know that 85% of colleges and universities offer sabbaticals for their professors? A sabbatical is paid time off, typically for a year. 10% of companies offer this as well, about half of them being paid.
Few people know this and take advantage of it. A sabbatical can be a great alternative to retirement and you can come back fresh from doing something else for a year.
I have a friend who loves to ski and camp and hike. He’s an outdoorsy guy who doesn’t do well in offices, cubicles and meetings. Instead, during the winter he’s a ski instructor and in the summer he’s a river guide. In between he takes time off to surf and explore.
There are a good amount of people who love to pick up extra work during the holidays or just work during certain events or seasons in their town. Like the Alaskan fishermen who work just during the season and go all out and then take time off.
Seasonal work gives you a lot of options to work hard for a few months and then take it easy.
Tim Ferris coined this phrase in his popular book “The 4 Hour Workweek.” It’s the concept of moving to a less expensive state or country to lower your cost of living to either save and invest more or live on less in retirement. As somewhat of an expat who has lived all over the world, I’ve seen firsthand people doing this. There are about 4 million Americans living abroad for a variety of reasons, including retirement.
Geoarbitrage is when you continue to work but do it in a different location, typically where the cost of living is much cheaper.
If you choose to continue working remotely or at a local company, the huge financial advantage is that you can really accelerate your savings and investing. It’s easier to boost up your savings rate if your expenses are low and your income is high. Consider making $80,000 per year and living somewhere that costs $15,000 to live. You can bank the rest and reach financial independence much sooner.
I wrote an article about some of the places I suggest spending some time in and possibly retiring to for less than $1000 a month. Here’s another one from Smart Asset.
Some of the popular countries are Portugal, Czechia, Malaysia, Costa Rica, Panama where you can live for a fraction of the price of many American cities.
From 2009-2014 I lived most of the year in either Paris or Rome. I spent the mornings in language school (I love languages and speak 6) and then the afternoon and sometimes evenings working. I had some of the best times of my life.
Experience the world through your own eyes and don’t take the media’s view of the world. Traveling and living abroad is much more doable than most would lead you to believe. Get started in a less expensive country and you’ll see how doable it is.
Whatever country you pick, remember to check the travel and visa requirements for your passport.
Living in a low cost of living place makes work more optional. If you have enough saved you don’t have to work or work as much. Also, you need to have less in your retirement portfolio because you don’t need as much to live, so financial independence is more doable.
For example, you can live comfortably in Thailand for $25,000 per year. Using the 4% safe withdrawal rate, you only need a $625,000 portfolio. Living in San Francisco where the cost of living is $60,000 per year on average, you’d need $1.5 million.
If you don’t feel like going to another country you can try one of the less expensive US states. According to CNBC they are: Michigan, Tennessee, Missouri, Mississippi, Kentucky, Oklahoma, Georgia 1
There are a lot of alternative options for the adventurous person that can spice up your life and make it easier to reach financial independence.
Hey hey. I'm Trajan. I'm a minimalist entrepreneur who loves exploring the world (42 countries), learning new things (7 languages) and trying to get better every day (working on my backsquat).
I write about entrepreneurship and building an optimized and happy life through systems, good habits and scientific research.
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