Why Retiring in Your 40s Probably Isn't the Best Life Goal

This morning, I read a story in a German newspaper about a young guy whose goal is to be financially independent, so he no longer has to work, by the age of 30. He's 22 now and is working hard, limiting his expenses and investing his money to get to a point where he can live of passive income. When you read the article, it becomes clear that even he has to admit that achieving this goal in his 30s is unrealistic ¬– but 35 or 40 seems to be achievable.

He's not alone. I see stories like this all the time. They pop up in the news, both locally and internationally and promoted posts that promise to hold the secret of how to retire in your 40s have become a daily feature in my Facebook Feed (clearly I must meet the target audience criteria).

And it sounds great, doesn't it? Retire in your 40s, or maybe even in your late 30s. Who wouldn't want that?

Who doesn't like the idea of not having to work anymore if you don't want to?

However, to see the problem with this approach to life, you only have to read the rest of the news – especially in New Zealand this week. It started on Monday morning when the news reported that 13 people had died in car accidents over the past four days. That might not sound like a lot to those of you who live in big countries, but for little New Zealand, it’s a lot. But of course, that tragic news was overshadowed a few hours later when the volcano on Whakaari/White Island erupted while tourist groups where there. So far, eight are confirmed dead, and the nine that are still missing are presumed dead. Dozens of people are in hospitals with significant burn injuries and their lives forever changed.

That's just New Zealand this week. Read any newspaper anywhere in the world, and you're likely to read about good people dying way too young or having their lives permanently altered in some way.

You know where I’m going with this. Life is short!

You never know when you're time is up, or when some tragedy strikes and leaves you unable to do things you've wanted to do. So why would you want to spend your 20s and 30s working like a crazy person to maybe be financially independent by the time you hit 40, if you don't even know if you'll make it to your forties?

And it doesn’t even need to be a major tragic event. Sometimes it’s just life that gets in the way. I met a couple recently who had worked hard their entire life. When they were both in their late 50s, they decided to retire early and do all the things they've always wanted to do. They bought a motorhome and set out to see their own country and have all the adventures they've always dreamed of.

They’ve been doing that for over five years now and have been loving it. But both say they start to notice how their health is getting in the way. There are walks and hikes they would love to do, but they don't have the strengths and fitness anymore. I met them after I had just been out on my paddleboard and they said how they would love to give that a go but don't feel up to it anymore. They have family in the UK and said how much they would love to visit more, but the stress of the long trip is getting harder to take at their age – they now wish they had gone back more often in their 30s and 40s, but they were busy working.

They have the time and the money to do all the things they wanted to, and they are fit and healthy for their age, and yet it is just the simple fact of getting older that is getting in the way of doing all the things they want to.

They aren't unhappy, quite the opposite. They struck me as really lively, passionate and happy people with a great love for life. But they both also told me how they wish they had done more travelling and exploring when they were my age and still had the energy to do it all.

I hear that a lot. Older people often tell me they wish they had done what I do now when they were my age.

I don't know if it's just me who gets inundated with these "the secret to retiring in your 40s" ads and promoted posts everywhere I go on the internet or if everyone sees them. The number of stories you see in mainstream media about this would suggest it's a popular topic and life goal. But I don't buy it! I don’t think that’s a good life goal to have.

Don't get me wrong, I'm not saying you shouldn't save and plan for financial freedom. I'm not saying take all your money and spend it on anything that looks like fun right now. Statistically speaking, there is a good chance that we will make it to old age, so it's smart to prepare for it.

And if you can retire in your 40s, that’s awesome. Go for it! Maybe even aim for it, plan and work for it. Just as long as you don’t forget to live while you can.

Because there is one other factor you can't ignore. For the far majority of people, retiring early means they need to generate passive income from investments. And investments always come with risks. Simply putting your money into a fairly low-risk bank account won't generate enough passive income for most of us to live of (you would have to invest a LOT of money that way). Instead, most of us would be looking at higher risk investments that offer higher returns. But by their nature, they also come with a much higher risk of loses. You never know when the next financial crisis will hit, when the stock markets will crash or when the housing market collapses. You won't be the first person who loses a big chunk of their life savings overnight and to find yourself back at work for another decade just when you thought you had enough to retire.

So make sure you make the most of NOW. Maybe work and earn a bit less and build a work-life balance that you don't want to retire from in your 40s.

I, for one, have no ambition to retire in my 40s. Or my 50s. In fact, I can quite happily see myself still doing some work in my 70s. I’d rather work 20 hours a week for 40 years than 40 hours a week for 20 years. I actually think I would be less happy if I didn’t have to work at all. My work brings challenge and structure into my life and a certain sense of accomplishment and purpose that I would miss if I didn’t have it. But I don’t want work to be all I do. I want to make sure I have time to do the things I want to do now while I still can.

Of course, in a way, I'm lucky in that I have found work that I enjoy and that fits within my lifestyle. But luck is also almost always a result of choices, hard work and sacrifice.

If you don't enjoy your work right now, you have a choice. You can stick with it and work hard to save money so you can hopefully retire in your 40s or 50s (probably missing out on a lot of stuff along the way because you’re so busy working) or you can look for change. You can change jobs, learn new skills, or maybe just change the company you work for. You can keep evolving and working on yourself until you find work that is fulfilling and that you enjoy – and most importantly, that you don’t feel the need to escape from.

This might not be achievable for everyone, but for most of us, it is –if we try hard enough!

But regardless of whether you have or find a job you enjoy, here is the key point I want to get across with all of this:

Retiring in your 40s doesn’t guarantee happiness. You’re not even guaranteed to make it to 40. So what's the point in making it your main life goal?

I think a much better life goal that is much more likely to bring you happiness is to aim to create a life you don’t need or want to retire from – at least not in your 40s.

In other words, aim to find sustainable happiness now instead of spending all your energy working for something that may or may not ever happen – and even if it does, you don't know if it will actually make you happy.