
Note: This is a long post (3000 words) but it can easily save you years of your life, so take a lemonade break halfway through if you have to.
When I was a TV-watching child in the 1980s I’d see a lot of commercials for something called “Freedom 55.” It was a financial planning service, offered by a life insurance company, but at the time I didn’t know what any of those things were. I knew what retirement was though. I also knew that companies in commercials always try to make themselves sound as good as possible. So the message I took from those commercials was that age 55 was an ideal age to retire, a few years earlier than the norm.
That stuck in my mind as a pretty universal benchmark, throughout my gradeschool life and working life, and it was steadily reinforced by how the working adults around me talked about retirement. It was something for old people.
I pictured the typical career-fueled life as settling out into three distinct phases: pre-work, work, and post-work.
Pre-work lasts about 16-23 years, while you live off of your parents, student loans, or both.
Work, the longest phase, lasts about 40 years. During this time you earn an increasing amount, and so as you soldier on through these four decades, you can afford an increasingly rewarding lifestyle.
Once you are in this phase you also begin to save some of your income for the next phase. The gold standard benchmark here, culture taught me, was 10%. Save 10% of your income for retirement, beginning as early on in the work phase as is feasible for you, and you’re cruising. Almost everyone recognized this benchmark too, yet almost everyone described it as being hard to do. I found it hard. Read More
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