Can you afford to retire early?

Many Australians caught in the nine-to-five grind of working for a living, dream of the possibility to retire early. Spending their days travelling or playing golf or doing nothing much at all.

There’s even a name for it these days.

The Financial Independence, Retire Early (FIRE) movement

The FIRE movement is making more and more young Australians start to question exactly what it takes to retire early. Yet without winning the lottery or suddenly inheriting a fortune from a long, lost relative, how possible is it to structure your finances, so you never have to work again?

According to the Australian Bureau of Statistics, the average Australian retirement age is just 55.4 years[1]. This makes it seem that early retirement is somewhat the norm for Australians. However, this number is dragged down by partners who stop work while their spouses support them financially, and people forced into early retirement by redundancy or medical issues.

So, how plausible is it to stop working sooner rather than later?

The answer depends on how soon you start setting goals and saving for your retirement. Also the type of retirement you dream of, where you are hoping to live, and whether you have children or other dependents you need to support. It’s also more achievable if you can structure your life so you are still earning at least some income, whether from a positively geared investment portfolio, a hobby or something you love doing and would do anyway.

The Association of Superannuation Funds of Australia (ASFA) currently suggests a couple who own their own home require $62,000 a year ($640,000 in savings)[2], to enjoy a comfortable retirement in Australia. At the other end of the scale, some people are eager to retire overseas, to a country such as Indonesia, where living expenses can be a fraction of what they are in Australia.

The key to deciding whether you can retire early depends on just how determined you are to achieve it.

You need to think through your lifestyle requirements and work out if you need a simple caravan and campsite in rural or regional Australia, or whether you want a five-bedroom home in leafy metropolitan suburbia. You’ll also need to make sure your retirement savings are invested in quality assets that will continue to generate a strong, consistent level of income.

As your financial planner, we can help you with this.

A good tip is to keep your options open and your job skills up to date, in case you have a change of heart and decide you do want to go back to work, even if only on a part-time basis. In fact, you might be better off taking what is increasingly referred to as a mature age ‘Gap Year’ and try out what it’s like living overseas or spending all day on the beach before you quit your job.

While being permanently retired and free to live each day as you choose does sound wonderful, and it’s still important to set yourself goals while in retirement. As always, the earlier you start setting goals and putting financial plans into place to achieve your early retirement dreams, the better.

Here at Endorphin Wealth, we are not licensed or owned by the big banks and financial institutions, so the advice we provide is always in our client’s best interests. We have the advantage of being able to access a range of products from different providers that can be tailored to our client’s goals and needs.

For an obligation free conversation about your financial future, please contact us on 03 9190 8964 or at