Hello everybody, it's Sam from financial samurai and in this episode I've got my wife Sydney here We're gonna talk about the ideal age to retire to minimize regret and maximize happiness So if you know my story, I left at 34 years old several months before my 35th birthday in 2012 I was working in finance for 13 years and I decided I had enough because I was burned out I saw the glass ceiling above my head where I couldn't get promoted to managing director even after probably three to five years because There are already a couple managing directors in the satellite office in San Francisco and my direct boss in New York's City who was the head of the desk wasn't even a managing director yet So he had to get the managing director and that would take probably one or two years And then after you know, three to four years of proving myself more Maybe then I would have said so there were no guarantees So instead of complaining, I just said hey, let's try to negotiate a severance To get the hell out so I can do what I want to do Which was to write more on financial samurai and to travel more and just take a break And what about you Sydney?

How did you exit? Work, how did you retire? I? ended up retiring at 35 after about a year of Thinking about it and being pretty miserable at work I got passed over for a promotion that I really thought I was gonna get And then I just started to have too much stress I always had stress on and off at the job But it got to the point where I was never getting any kind of a break.

I was working long hours I was working on the weekends While also trying to do some side hustling So I was really just burning myself out and I ended up having a nervous breakdown And cried myself to sleep one night and that's when I realized okay. This is it.

This is not working for me anymore I need to figure out a way to change things so you and I started talking in depth about what what I could use to strategize a way to negotiate my own layoff and So I started the conversation Basically the next day with my HR manager and then my own direct manager and the negotiation process took about Six weeks roughly there was a lot of back and forth But it all worked out in the end.

I was able to reduce my hours and still get full-time pay I think I was working about three days a week And I ended up training two people to replace me which proved that I was doing the work of more than just one person All in all it was like getting a 60% raise for six months the remainder of time I spent there because I ended up working only three days a week.

So 40% hour For 40% less use me and getting the same pay. So it was it was a great way to exit I was really happy and then you got a severance. Yeah of several months worth as well So in retrospect, did you think that leaving at 35 was good age?

yeah, and one of the main reasons I feel that benefited us is because I Wasn't stressed anymore once I left and then we were able to start our family About a year or so later. So that was huge. That's huge for us, right? so, you know, I came up with this chart in terms of Trying to be more objective regarding the ideal retirement age and I came up with four variables income freedom potential and return on education Now when we try to figure out minimizing regret and maximizing happiness We don't want to retire too early because we might regret not recognizing our full work potential For example, or we might you know, basically waste our time getting all that education I mean, what's the point of going to college and then maybe getting a master's and then a PhD Only to retire in your 30s or early 40s.

That seems kind of like a waste and Then on the income side You know the biggest the highest earning years are usually in your 40s and 50s So there's all these variables that I you know put together and we thought about to figure out what that ideal Retirement age is and the conclusion that I came up with is that the ideal retirement age is 41 to 45 And the reason why based on these variables is one I scored income as a 9 9 in the sense that you've been working for 20 plus years already And so you've already kind of tasted what high income is like you've tasted whether Making more money has made you happier or not But if you retire in your 30s, for example or 35 You might not fully know what it's like to make a high high income In terms of freedom freedom.

It just kind of depends on where your home life is and how much respect you get at work You know between 41 and 45 you should have a lot of respect from your peers If you've got 20 plus years of experience, I know my respect increased I got no respect in the finance industry when it was in my 20s I mean clients and respect me colleagues didn't respect me.

So so by the time you get to your 40s you get some More respect a little bit of freedom in terms of potential. I think there's maximum potential once you leave your job In your 40s in your early 40s because you've got the experience. You've got the energy you got the wisdom You've probably got the capital.

And so the potential is to do other things that you want I mean, you know retiring doesn't mean in my mind doing nothing retiring from a day job means putting that chapter behind and Just doing something creative or something. You really really wanted to do or you know volunteering or whatever it is And then finally return on education in your 40s So you have worked for 20 plus years and you've gone to school for less than 20 years So I like the ratio of working longer than the number of education years You've got otherwise it just seems a little bit off.

So Cindy, what do you think about? The ideal retirement age. What do you think? Is that? Proper range and what do you think about my belief that the age range is 41 to 45? I think it's a great range and I would agree with that. I think it's again Retirement is something that's personal.

Everybody's different. They've got different career interests and trajectories I think you know for the grand scheme of thing I think that's a great window because again, you've put your education to work you've should have hopefully done well with your income potential by that point and I Think people really start getting the itch at around that age to do something different Yeah, and so that's that's the thing and maybe you're not retiring.

Maybe the other word is you're you're going for a career change You know you wanted to job jump into a different completely different field that you've always been interested in But you were too afraid because you just didn't have the experience or the capital or the connections And so by the time you're in your early 40s, you gain a lot of confidence I definitely felt I got more and more confident as I got older, especially once I hit 30 I felt like hey, I have arrived.

I've got experience Respect me. I know what I'm talking about And by the time you hit 40, you definitely know a lot about what you're talking about And here's the thing although the ideal retirement age I think is 41 to 45 because you're young enough and a lot of you still have a lot of energy to do whatever you Want if you love your job, which I did not love my job after 13 years I say by all means Continue to work whether it's 250 years old or 260 years old if you're truly blessed and love your job The issue is I think about 70 plus percent of people are disengaged from their jobs They would rather do something else, you know They ship it in they come in the latest possible time without getting too criticized and they try to leave as Soon as possible or right when their boss leaves and so I think if we're all honest with ourselves, I Don't know that many people who truly truly love their jobs.

Do you? know I think it's rare that's why if you do love your job hold on to it and Maximize it. Yeah, hold on to maximize it because I see a lot of people who actually do make a high income You know, we're talking multiple six figures maybe seven figures and they're just burnt out Well, the other thing to think about is that not many people have the opportunity to make that type of money You know around five hundred thousand dollars and above is a top 1% income so if you're lucky enough to have a household income above that or an individual income above that I Would I would really encourage you to try to take a sabbatical or maybe you know change?

Roles in at your firm or take things down a notch a little bit Take all your vacations and try to really milk that Maximize that income potential for as long as possible until you really really can't take it anymore Because the other thing I've learned is that once you leave that kind of income, it's very hard to get it back Especially if you've been out of the workplace for more than I would say two or three years Once you're out of the workplace for three years Your value really starts to decline because your network and your connections get diluted Technology changes technology changes your skill set gets outdated So you've got to figure out if you do decide to come back to the workforce You've got to figure out how to keep that skill set fresh and your connections fresh.

So that's a good hedge That's a good piece of advice if you decide to retire early or earlier than the normal 60 65 age range Keep in touch with all your previous clients all your previous colleagues your friends go out to lunch dinner drinks When the pandemic is over and just keep that connection and keep your skill set up Otherwise, well, it's as a hedge just in case you decide to go back to work the other thing I want to share about retirement is that you might find yourself to be busier than ever in retirement because suddenly you have 10 to 12 hours a day on average to do whatever you want You tend to logically and rationally go do those things you really really want to do So don't feel like you're gonna be bored Well, you might be bored for the first six months as you try to figure out your new way of life But I promise you folks that you will figure out something that you really love to do and do it with the greatest of passions Especially the younger you retire.

So for example My wife and I we decided to travel to around 30 new countries. We took cruises around Europe and we went to Asia After we both were retired and it was awesome Yeah, it was really great and we saw places like Angkor Wat and Cambodia. The temples were just unbelievable We saw old friends in Kuala Lumpur, Malaysia.

We went to st. Petersburg, Russia I mean, these are all great great trips that I've really appreciated in my mind in terms of value And especially now that it's not easy to travel or we don't want to travel right now. I mean these trips were wonderful What else did I do?

I worked on my tennis game a lot I'm an avid tennis player and I was able to get bumped up to a 5-0 level USTA ranking and that's a really tough ranking because it's all filled with Division 1 X college athletes and then of course I Spent a lot of time writing on financial samurai Three to four times a week and it was really really fulfilling and it still is really really fulfilling Because it's really fun to learn about new things interact with the community, you know, build a brand build a website These are all fun things to do that.

I probably just do for free I mean traveling playing tennis writing. These are all enjoyable activities that I like to do and Then of course as Sydney said we were able to finally successfully start a family Which is frankly the greatest thing we've ever done so far I mean we feel so blessed and I'm telling you folks if you're trying to start a family and it's not Happening it might likely be due to the stress you feel at work It's so funny that you know after years and years of work.

We start getting used to this type of gnawing stress every single day and You know these chronic health issues and pains We just kind of start living with it and it's only after you Leave your job if you have obviously enough capital to sustain your lifestyle That you you notice Wow life Shouldn't be that stressful all the time or we've been bottling up all that stress All so often every single day for so long Alrighty.

Well, I hope you enjoyed this episode about the ideal age to retire There is a great survey in the post which has over 5,700 entries and I'll tell you that the first place vote is 51 to 55 years old is the ideal age range to retire followed by 46 to 50 followed by 41 to 45 in retrospect, I Personally believe that leaving my day job at 34 was too young Because I felt a little bit rushed even though I was able to negotiate a severance that paid for about five years of living expenses I still felt rushed because I didn't I didn't have that nice going away party For example, even though I was at my firm for 11 years.

I wasn't able to relocate to another office and try something new I wasn't able to go, you know to a competitor and get some kind of guaranteed compensation And I wasn't able to go on many business trips and just feel great that ah, this is my last year of work How relaxing is that?

You know when you apply to college I remember in high school and if you got in early I don't know if I got in early but man those people who got in early were able to just coast for the last Yeah, you know four or five months I mean that is what I would have liked to retire at least one year later at 35 or 36 Really save more money experience more and just mentally knowing that the end is nigh, right?

It just feels psychologically better So so just really think about things folks Retiring doing what you want is a really personal decision. I think 20 years of doing something and Is enough I don't think anybody will will look down upon you after 20 years of experience and for you to try something new And so I say no regrets live life with no regrets obviously think about Making calculated decisions and discuss and listen to people who've done it before because you cannot really Ascertain and and pinpoint all the different things that will happen to your life You just can't you just got to do the best you can.

Yeah Alright folks. We'll talk to you later and I'll see you guys around Thanks everybody. And if you like this episode would love a positive review because it helps keep us going