The conversation around abolishing the police is one our country should have, but the “police” I am writing about today and the issues surrounding them are admittedly much lower-stakes. While the actual police force has a lot to atone for, the folks I’m talking about do something that’s simply annoying: they crack down on definitions of early retirement.
Who are the early retirement police?
Most people can get onboard with the “FI” (financial independence) part of FIRE. Of course it makes sense to save enough money to be able to support yourself independently. However, most people balk at the “RE” (retire early) part. After all, if you write books, keep a blog, open a coffee shop, become an entrepreneur or earn money after “retirement”… well, can you really call yourself retired?
Many say you can’t work and be retired, and they have been branded by Jacob from Early Retirement Extreme and Mr. Money Mustache as the Internet Retirement Police. However, these people are everywhere, not just on the Internet, so I call them the ERP—The early retirement police.
The ERP argue vehemently against people’s claim to retirement. They say because someone chose to do something productive or make money from it, then they aren’t really retired. Frankly, this is a pedantic claim that does more harm than good, which is why I want to make a call to abolish the early retirement police.
How do you define retirement?
Retirement is a relatively new concept, which is part of the reason there is so much confusion around what it really means. If you take the dictionary definition, you would see that the ERP have a fair point when they say most early retirees are not retired:
The definition says you have to cease to work. This may seem pretty cut and dry, but when you investigate a bit further, it’s anything but. It brings us to the next question we could posit: what does it mean to work?
How do you define work?
The definition of work is the true sticking point for anyone rooting out the true meaning of retirement.
1. activity involving mental or physical effort done in order to achieve a purpose or result
The first definition includes most things that make life worth living. If you quit your job but spend your time golfing all day, you are technically working! It takes physical effort to play 18, the purpose is to beat your previous score and the result is improved health. If you decide to knit your grandchild a sweater, you are by definition working. It’s mentally tricky keeping track of each stitch, and in the end you have a beautiful result: a gift to wear. If we go by the first definition of work, nobody retires, not even the 70-year-old banker who left his career to spend more time gardening (after all, being a gardener is a profession in-and-of itself).
2. a task or tasks to be undertaken; something a person or thing has to do.
If we agree that as a society, there exists some type of retirement, then it is helpful to pursue the second definition: something a person has to do. [emphasis added]
This is where early retirees stake their claim: “I am retired because I don’t have to work.” Once a person is financially independent, they can decide if they want to go into an office or onto a beach. Whichever they choose, ultimately they don’t have to do it if they don’t want to, so ‘the drudgery of work’ doesn’t apply.
Definitions can be fluid
It’s not so simple as to point to a dictionary and say “case closed” with a new phenomenon like retirement. People used to work until they died! It wasn’t until relatively recently that advanced economies decided to guard against poverty in old age. Governments started working out ways to pay pensions and other benefits to allow employees to leave their business and retire. American Express offered the first retirement plan in America in 1875, and Social Security followed in 1935.
“Growing prosperity also meant more people could afford to stop working late in life.”
by The Seattle Times
It just so happens that now, more people are able to afford to stop working earlier in life as well. With the dictionary definition lacking, sociologists search for other ways to define retirement.
The Three Definitions of Retirement
According to sociologist Robert S. Weiss, there are three ways to define retirement: economic, psychological, and sociological.
Those who bemoan FIRE as a deceptive scam take on the economic retirement definition: “The economic approach [to retirement] assumes that a person older than his or her mid-fifties is retired if he or she does not work, or at least does not work for money.”
Clearly early retirement under this definition is impossible, because it assumes a person retires before their mid-fifties! In addition, this definition brings up the complications about what it means to work, and gets around it by claiming that even if you work, you at least should not earn money from it. You can be retired if you volunteer your time at a local non-profit, but not if you join the board. You can spend your days surfing at the beach, but I daresay you lose your retirement card if you start up a surfing school!
The fact is that if someone is over the age of 65, it’s much easier to consider them traditionally retired, even if they work in some way. Since many early retirees can be younger than fifty and most continue to “work”, they are immediately disbarred from this narrow definition of retirement.
The second method for defining retirement is called “psychological retirement.” This method says that if you think you are retired, then you probably are. This is the definition that most FIRE proponents go by. The defining factor is not about whether or not you work (because you probably will work in some capacity!) but whether you have the freedom to decide what that work looks like.
I know retirees that worked their entire lives in the medical profession, but in retirement they run a successful vineyard. Their lifelong passion for wine fueled a retirement dream that brings in some money and takes a lot of work. Yet they still consider themselves retired, and so do their peers.
Similarly, J.D. Roth from Get Rich Slowly says, “When asked, I often say that I am retired. (Or, at the very least, semi-retired.) Yes, it’s true that I’m currently spending 40+ hours per week running this website. It’s also true that I hope to make money from it. Despite this, I consider myself retired. That’s because I’ve (unknowingly) been using the psychological approach to defining retirement.”
Alternatively, several people who are considered part of the FIRE movement still eschew the “retired” label for themselves, like Jillian Johnsrud:
We are 33 and 38 respectively. And after a crapload of hard work, saving, investing, fixing up rentals, putting in some years with the military, we are work optional. I never really cared for the term retired. It just doesn’t seem to fit us. It implies to me that a person is done working. Truth be told, we really like work. All kinds of work. We like working in the garden, with our ducks, remodeling our rentals, volunteering, oh yeah, and our herd of 5 kids. They are a bit of work too!
J.D. Roth and Jillian Johnsrud both have lots of financial freedom, but under the psychological definition of retirement, we would only consider J.D. retired, because he considers it so. When someone like J.D. uses the psychological definition while the ERP use the economical definition, sparks fly.
The sociological definition of retirement
The third definition of retirement is whether or not other people see you as retired. This is where the the Early Retirement Police barge in to assert themselves.
It’s difficult to consider a young person as retired. Weiss shares the experience of a retired lawyer, “He said he was delighted to reach his mid-sixties…Not until then could he be sure his claim to retirement status would be accepted.” Likely a lot of early retirees will be similarly relieved to hit a certain age and be able to turn “I’m a consultant,” or “I work from home,” to a more honest: “I’m retired.”
Other people are a poor measurement of retirement, because they don’t have the full picture of anyone’s life. This problematic way to define retirement is what gives the ERP false authority on deciding who is and who is not retired.
You can retire early and still earn money
Another common refrain from the early retirement police is that early retirees are only retired by becoming “the product” and selling the idea of early retirement to others. Essentially, their lifestyle is bolstered by others’ dreams to retire early. Here’s one example of a tweet that could be leveled directly at me, someone who plans to retire at 32 and who currently runs a blog talking about it:
I’ll start by saying I respect Kristen a ton, she runs one of my favorite podcasts By The Book and authored a book to help people start their own podcasts. I don’t think she’s wrong in this tweet, either. There are scammers out there claiming early retirement who are still financially dependent on their income. This is 100% disingenuous and has a dark multi-level marketing illegitimacy to it. I also agree with Kristen that the “So can you!” claim is fallacious as it doesn’t take into account personal privilege.
However, I see similar accusations pitched at early retirees who also just so happen to have a blog, a podcast, or other social presence. The difference is whether or not the person who claims to be retired is financially dependent or independent. For the financially independent creator, there is nothing wrong with earning money from their work, as it imbues the finished product with value. Nor does earning money detract from their retirement status. This harkens back to my earlier point: they don’t have to do it, and that makes all the difference.
It’s good to be critical of people with questionable motives. There’s a lot of value in realizing when someone is selling you a dream and not a reality. Financial independence is the underlying key to retirement. Before claiming someone is ‘not really retired’, ask yourself, if you took away the e-courses, advertisements, sponsored hyperlinks, cookies, and pop-ups, would the person still be financially independent? That’s the measurement for early retirement– not the distracting bells and whistles of hobbies that also earn income.
Why focusing on “retirement” definitions misses the point
People who are quick to point a retiree’s working partner or side income are rightly concerned that a claim to retirement is misleading the public. They are right to be wary, and luckily there is a simple way to get to the root of the issue. After that, arguing about retirement only serves to undermine the story of incredible accomplishment.
If you could be considered retired without your working spouse, side income, or other extra benefit, then by all means continue calling yourself retired. The early retirement police’s loud whistle distracts from the impressive story: even if you take away a retiree’s blog, podcast, or Etsy shop, they could still continue living off of their investment income happily.
It’s important to share information that bolsters a FIRE journey so people can get a complete picture. Let others continue to share their financial independence stories, and also how their spouse continues to work, how they earn income from side projects, and their qualifications for tax deductions. All of these things add context to an awe-inspiring story, whether or not they are reproducible for everyone else.
I am positive that I will have pushback when I retire early. Though I am saving up my own salary and my plans only involve money I have personally made and invested, I am confident that people will look at my life and attribute my success to other things, like my working partner. I hear it now:
“Her partner is a doctor, she’s only retired because he is still working!”
“She could only retire because she doesn’t have kids!”
“Not everyone has a British passport to fall back on if healthcare in the U.S. goes to hell!”
Here is where I could point out that I am saving up $1.2 million on my own salary and investments. I would still be financially independent if my partner and I had never met. In addition, I have doubled my projected expenses in case of extenuating circumstances (like kids). And yes, a British passport is a unique part of my own citizenship, but I am still planning by factoring in long-term U.S. healthcare costs to my early retirement plans. All these accusations do is distract from the overall message: it’s possible to save and invest enough to escape the rat race before the age of 65.
Why don’t we just drop “early retirement” from FIRE altogether?
If you’re onboard with the financial independence aspect but hate the thought of “retiring early” like Carl from 1500 Days, well, you’re not alone. Most people say the same thing, asking for a rebrand or bemoaning how “FIRE” is unfortunately too catchy to drop.
Beyond the marketing appeal and headline puns available from the acronym FIRE, the early retirement aspect is important. Many people adore their jobs, but for those who peer into the future and sweat from an existential dread about 45 more years of work ahead of them– simply searching for the words “early retirement” will help them find resources that will help with their finances and lead them to financial independence.
Still, many folks skirt the ERP saying things like, “I retired from full-time work” or “I am work optional.” These are creative solutions that work if retirement must stick to its rigid definition. I think the definition is starting to wiggle out of its neat dictionary confines, much to the chagrin of the ERP.
Retirement can be perplexing
You may say, “Who cares what other people say about how you live your life?” If you can consider yourself early retired, you have better things to do than bristle at the accusations of naysayers.
As Tanja writes in her article on The False Distinction Between Financial Independence and Early Retirement,
“We as the personal finance community have bigger encouragement to offer and bigger myths to dispel than arguing the semantics of financial independence versus early retirement.“
I agree, and ultimately this is a conversation to help us examine what “retirement” and “work” means to each of us. It can help us realize there are other paths in life. FIRE is about choosing the work you love, not halting work altogether.
Therefore all retirees, young and old, should be encouraged to work. Most traditional retirees “work” in some capacity. Doing laundry, cooking food, raising kids or grandkids, serving on boards, all of these things are work but don’t always conjure up a businessperson in a suit. The sociologist Weiss points out that even in retirement, he and his colleagues remain engaged.
I find retirement perplexing, even as I write about it. The freedom to do anything includes the freedom to remain engaged as well as the freedom to do nothing. And yet there is something special about the style in which I, as well as former colleagues who are now retired, remain engaged, to the extent that we do. Whatever our ultimate goals– to leave a legacy, to complete a life’s work, to contribute to our society, to keep busy– we are not trying to establish ourselves in our careers. That is done, over.
– Robert S. Weiss (born 1925, age 95 years), The Experience of Retirement p.4
Just because retirement can be perplexing doesn’t mean we shouldn’t talk about it. Those who have retired early are done trying to establish themselves in their careers, but that doesn’t mean they are done with work.
Abolish the early retirement police
Saving up enough money to retire early is life changing, not just because you can stop working. It’s life changing because you can start working on things that matter to you. You can work when you want to work and how you want to work. You can leave toxic situations without worrying about the economic fallout. You can pursue your childhood dreams like The Mad Fientist, who applied to be an astronaut.
The problem about nitpicking about whether or not someone is retired because they are still working is that it completely misses the point! If someone saved and invested and improved their life— it’s a story worth sharing. If they still work, have a spouse who works, have a pension in place, or even have popups on their blog, they can still be retired. Those things are ultimately distractions from the fact that they became financially independent and managed to design a life for themselves.
Abolishing the early retirement police means broadening and updating the definition of retirement. If you consider yourself retired and have the means to stop ‘working’ if you so desire, you can call yourself retired! Vigilantes who claim otherwise are ultimately wasting their time and distracting from the true pearl of FIRE: when you are financially free, you have the option to shun obligations, pursue passions, and work how you want.
What do you think?
What is the difference of financial independence and early retirement to you?
Would you still work if you were financially independent?
If you could write a new definition for retirement, what would it be?
Share in the comments below!