Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

Why More People Are Retiring Early Today Than Ever Before

• Ari Taublieb, CFP®, MBA • Episode 248

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More Americans than ever before are retiring early due to seven key factors reshaping our approach to work and retirement planning.

• COVID-19 accelerated early retirements with 2.6 million more people retiring during the pandemic than expected
• Average retirement age dropped from 64 in 2019 to 62 in 2022, one of the sharpest declines in decades
• The FIRE movement (Financial Independence, Retire Early) has grown by 300% in searches between 2018-2023
• Strong market performance created record numbers of 401(k) millionaires
• Remote work flexibility enables 40% of workers to retire 2-5 years earlier than previously planned
• 68% of Americans have reprioritized work-life balance with 47% willing to accept lower income for more freedom
• Health concerns prompted 25% of early retirees to leave the workforce sooner than expected

Advisory services are offered through Root Financial, an SEC-registered investment adviser. This content is intended for general informational purposes only and should not be construed as personalized investment, tax, or legal advice. Advisory relationships are established only through a signed agreement. Any examples discussed are hypothetical and for illustrative purposes. If client experiences are referenced, no compensation was provided and their experience may not be representative of others. Viewer or listener comments shared publicly are unsolicited and do not reflect the views or experience of Root Financial. We do not verify or endorse any statements made in public forums. Root Financial does not provide tax or legal advice. Tax planning topics discussed are considered in the context of broader financial planning and should not be relied upon as a substitute for professional tax or legal counsel. All investments involve risk, including possible loss of principal. Past performance is not indicative of future results. Watching or listening to this content does not create an advisory relationship. To learn more about Root or to explore working together, please visit www.rootfinancialpartners.com. 

If you want help with your early retirement, reach out to Root Financial Partners or consider the Early Retirement Academy to access planning tools and resources.


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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.

“Early Retirement – Financial Freedom” is a podcast produced by Root Financial Partners, an SEC-registered investment adviser. The content provided is for informational and educational purposes only. It should not be interpreted as investment, legal, or tax advice. I may reference planning situations based on real client experiences, but they’ve been simplified for clarity. Always consult your own financial advisor before making decisions.

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Speaker 1:

There are seven reasons more people are retiring early today than ever before. I'm going to walk through all of them right now and give you my insight as a financial advisor and host of the Early Retirement Podcast. So let's have some fun. Number one is the COVID-19 impact. So the pandemic accelerated early retirements significantly 2.6 million more people, according to Federal Reserve data, retired during the first 18 months of the pandemic than would have been expected from pre-pandemic trends. I am seeing this as a financial advisor. So many more people are prioritizing their health going. Hey, I don't know if sitting at home all day is best for me.

Speaker 1:

I now and I have a famous story that I've told before, which many of you know a woman who reached out and said she was really upset that she had $3 million. And I said look, I don't want to be mean here, but I just don't hear that every day and that kind of sounds bad because there's a lot of people who would love to have 3 million. So why are you upset? And she was upset because she didn't need 3 million. She thought she just needed more and more. And she kept saying I'm going to work one more year, one more bonus, one more project. And that happened for a few years and she had really bad sciatica, which I'm not too familiar with, but she was telling me it is excruciatingly annoying not painful, but excruciatingly annoying, which I think also is painful because she told me about that later. But she wants to hike in retirement is the point of the story. And now she's like I can do it, but it's just, it's going to be a lot more difficult and if I would have retired earlier, when I was in better health, I would have, I think, been a totally fine financial spot. So she was just beating herself up because she's like I think I have too much, which I don't hear that every day, but the point of the story is I don't need any of you. But the point of the story is I don't need any of you and my hope is that you're not sitting at work. I'm sitting recording this right now but that you're not sitting at work, just going.

Speaker 1:

Okay, it's me right now and I know that my spouse wants to travel in retirement, but I'm the one that needs to health, just so that one day, as a family, we can retire and do everything we want to do and more. And if that means I need to work 10 more years and not focus on my health, then that's fine. Don't do that. Yes, make sure financially you're in a good spot before you retire. But can you practice your health?

Speaker 1:

And the way I explain it to my clients is can you train for your early retirement? It's a fun way of thinking about it. Yeah, I'm going to train for when I hike and travel and it might not seem like a big deal, but, like you might be in an RV for a long time if you're going around the country, well, it makes sense to actually go. Hey, I'm going to like train, and now it sounds weird, but I have clients that are doing exercises, kind of like this, and you can see me if you're on YouTube or if you're listening on the app. You didn't see me do a weird little movement here, but it's like cat and cow at your desk. I have clients that are going. Hey, I'm training for my early retirement and it's a cool way of thinking about it. So that's number one.

Speaker 1:

Number two retirement age decline. So the average retirement age, according to Gallup surveys in the U S, drop from 64 in 2019 to 62 in 2022, that is one of the sharpest declines in decades. So when you hear early retirement you might be thinking what is that exact age? Well, it's not a perfect age. I like to say it's before 65. That's an early retirement because 65 is the traditional retirement age and that's Medicare turns on. And when most people think of retirement they think retire at 65 and not fun to talk about, but pass away at 90, 95. That's kind of my 30 year retirement, of which only so many of those years are really with your optimal health. So I like seeing that the average retirement age dropped from 64 to 62. So my only ask is it's fun to learn from each other.

Speaker 1:

If you're listening right now, send me a note. How old are you and when are you planning on retiring? If you're watching on YouTube, drop a comment below right now. Please let me know how old are you, what are your assets. You don't have to go through everything, but to be able to communicate with others it makes it really fun. So don't say your social security number, don't go crazy. But if you were to say, hey, I'm 61. I have 1.2 million, I want to spend 6,000 a month Anyone else in a similar boat you might have a lot of people that comment below that go yeah, that's me, actually, and you're not alone.

Speaker 1:

And so here's what we're thinking about and we're doing this, and I want this to be as collaborative and, hopefully, as what's the phrase that I like to talk about. I was trying, I was just thinking about it, I was telling someone about it recently, action bias of hey, I want you to listen to this and I hope it's entertaining, but I also hope that you go wow, I'm going to start doing that. Wow, I was always going to retire at 64. A lot of people retire at 62. Maybe I could do that. Let me look into that. What do I have to do to be able to retire at 62? So a little tough love there of hey, please drop a comment, but also please ask yourself hey, when can you be in a spot to make it happen?

Speaker 1:

Number three that I want to go through here is FIRE movement growth. So FIRE stands for financial independence. Retire early, and I don't really like the phrase because it is almost making you think like, okay, should I like work like crazy, like should I have two jobs just so I can retire early one day? There's a lot of people that are in their thirties that work like crazy to hopefully retire at 50. But then they're like I have no idea what I want to do with my life and I just sacrifice my health like crazy. So now I can't even fully enjoy it. So don't do that. I prefer recreational employment. Are you working because you want to or because you have to? And when can you get to a position where it's because you want to? So this FIRE movement, some Google trends here, a stat so searches for FIRE retirement increased by over 300% between 2018 and 2023.

Speaker 1:

So just the fact that people are thinking about hey, do I have enough money to retire early? Like, are there things that I don't know about? Are there strategies to and this is what I focus a lot of my time on, as many of you know tax, estate, withdrawal, healthcare If we optimize some of these things, it can actually be way more impactful than you working longer. So let me ask you this would you rather have an awesome tax strategy that is able to bring in $80,000 completely tax-free? Would you rather work a job that brings in $150,000, that, after tax, you're taking home $110,000 after 401k and taxes and insurance premiums, and I'll have people that go wow, I didn't even know that. If we can get really intentional and savvy on the financial side. We can then make sure you prioritize health and family and purpose and fulfillment. Now you can really have a holistic retirement that's allowing you to sleep at night.

Speaker 1:

I paused there because I'm thinking about how I want to phrase it, because I want to be very careful with you guys. I want to make sure that you can sleep at night without thinking did I miss something? Was there something I should have considered before retiring early? Sorry, makayla, that was a big burp, so I'm going to record that again. I want you to think at night when you put your head on your pillow was there something that I overlooked? And you will know the feeling and you know when you like go travel somewhere. And you will know the feeling. You know when you travel somewhere and you've got that feeling. Did I leave my keys or my wallet or my phone? It's normally right to that feeling. And if you know that you've gone through the exercises to go wait. So if markets go down and tax brackets go up and inflation goes up and I live till I'm 100 and it turns out I want to spend way more, I'm still in a great spot to retire early. Yeah, now I feel confident, I can do this. So, all of this to say the FIRE movement although I don't fully agree with what it stands for, it, is helping way more people consider an early retirement and look into these types of strategies.

Speaker 1:

Number four is just something we cannot ignore strong market performance. Market's growing helps people retire early. The strong bull market, despite volatility, which will always be there from 2009 to 2021, helped many Americans reach their retirement savings goal, and Fidelity reported that the number of 401k millionaires hit record highs in 2021 and is only continuing. So more millionaires than ever before. Obviously simple there, and I'm seeing that. I'm seeing a lot of people who reach out, who go yep, I've got 2 million bucks and I had 1.1, six seven years ago and markets have just been doing really well and I've stayed the course and I'm really confident. So strong performance. This is a big one and I was excited for this one, to tell you guys. So remote work effect, so ready for this. Nearly 40% of workers who gained remote work flexibility during the pandemic reported being able to retire two to five years earlier than previously planned, according to a 2023 survey by the Employee Benefit Research Institute. That is big.

Speaker 1:

From working remote, people are able to prioritize health and they're able to still have their compensation in a way that allows them to fund their 401k and do what they want to do, but it's giving them more time to go. Huh, is this to me the best use of my time? Sitting at home doing this job that I maybe don't love? Others of you are like, hey, this doesn't apply to me, I love my job. Okay, well then, this point's not exactly for you. But for those of you who do work from home, who are ready to go, I want to do something different.

Speaker 1:

Look, this ability to remotely work is allowing people to still go. You know what? What if I were to travel and do my work? What if I were to at least consider scaling back, working part time but staying remote? It's giving opportunities and that's all retirement, early retirement is about. It's about trade-offs what trade-offs make most sense to you. You might not be miserable. You might go. I don't know what I would do if I didn't have my job. So, actually having my job is awesome. I wish I could do it two days a week or three days a week to almost practice retirement. See what I would really like. Others of you go. Well, my job doesn't have that option, but I would love to know how much longer I needed to work and if I knew that was only three more years of remote work. That's different than having to go into the office for the next three years. Maybe I will retire earlier. So remote work was a big effect.

Speaker 1:

That's number five. Number six this is interesting shifting values. So this post-pandemic survey showed 68% of Americans have reprioritized work-life balance, with 47% ready for this saying they're willing to accept reduced income for more personal time and freedom. Now, before I look up some of these stats online, I will guess myself because it's fun. It's like when you go. I don't know if any of you do this, tell me if you do in the comments, but I will go look at homes and my fiance and I will try to guess the price. It's just fun. We like looking at big, fancy homes. We don't want one. They're too big, too much maintenance, but too much maintenance, but it's cool to think about. So I was guessing there'd be maybe 15%, maybe 20% increase. 47% of people are like I'm happy to have reduced income if I could have more time and freedom. Time is the only non-renewable currency. That's what people really want. So that was number six. And then number seven is health concerns. So the pandemic prompted about 25% of early retirees to cite that health concerns and workplace safety were their primary factors in their decision to leave the workforce earlier than planned. So what I talk about is retiring on your terms, not getting laid off and having that be why you retire. Sometimes that's the case and sometimes it's the wake up call.

Speaker 1:

I personally left my first career when COVID happened same career, financial planning, tax strategy, things like that but different employer. I left that employer when I was offered a package to leave and then it was the greatest decision I ever made and aside from, of course, proposing to my fiance in case she's watching this right now, but you guys get my point. So I left and I was over the moon. My life has been so much better, so much more purpose, so much more meaning. I love what I get to do every day. I get to communicate with all of you guys. I mean, I have the best job in the world, but that was something that got prompted by someone who reached out to me, someone at this company who said hey, we're now offering an agreement that, if you would like to leave the company, you can. Here's what this entails blah, blah, blah.

Speaker 1:

So it was someone nudging me. I didn't just go. You know what. I've had it, I'm going to do it. Here's something else. I needed that nudge and so for a lot of people, this healthcare, this pandemic, that was their nudge. So what I wish I would have done if I could go back, because I wish I would have left my previous employer earlier, because now I know how great my life is now. Now, could I have known that? No, but that's what I tell myself now. So my point here is don't wait for something to be the nudge, whether it be another pandemic or whether it be, you know, a company waiting to offer you a huge severance package which mine was not huge, but just severance in general. Maybe it's this right now, maybe it's you literally. Hearing this is making you think, hey, maybe I'm in a good spot. And I've always kind of wondered I'm on the line? How do I know I'm over the line? So this is something that I take very seriously. So I want to at least consider and ask you to consider hey, maybe this could be your nudge. So those are the seven interesting statistics that are causing more people to retire early today.

Speaker 1:

If you want help with your early retirement, this is what we love to do, so I encourage you to reach out to work with us at Root. You can go to our website, rootfinancialpartnerscom. You can use the description in the link below of this episode and you can go there and you can see the steps to start working with us. And then, of course, another option is the Early Retirement Academy. That is just. If you want access to software and some tools that help our clients start to plan their retirement, that's great. If you're, I'd say, anywhere from three years out from retirement, but you want to start planning for it getting really intentional, so you might be 20 or you might be 40. And then most people start working with us anywhere from one to five years out when we want to start crafting their actual income plan, so it's ready to go for their retirement. So that's it.

Speaker 1:

I love getting to record these. Thank you guys for tuning in, as always and allowing me to record these. Please drop a comment below like share, subscribe. This helps more people find the show and I appreciate it. See you guys. Thank you all, as always, for listening to the Early Retirement Podcast. I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years and that is because I love getting to do this.

Speaker 1:

Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney. Please be smart about this. None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here. Guys, please be smart about this. Appreciate you listening, as always, and you can, of course, submit a question on my website, earlyretirementpodcastcom, if you, of course, want me to address a specific case study or topic. I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it, at the very least give you some insight. That's it. Thanks, guys.