The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: brooklynguy on January 16, 2015, 01:07:23 PM
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Does anyone know of any reliable source of information regarding how many extremely early retirees are out there (or how many aspiring extremely early retirees, a number which is probably harder to measure)?
I get the sense that this is a (rapidly?) growing movement, but maybe that's just my perception being skewed as an increasingly-more-involved member of this community. I recall seeing passing references here and there to relevant statistics, but I can't find any data after doing some quick searching. Even if there is no available source of information on what percentage of the population consists of extremely early retirees (or people who are attempting to become one), someone less lazy than me can probably arrive at a reasonable approximation by analyzing the relevant data that is available (perhaps including statistics regarding the readership of this blog?).
I'm intentionally not defining what I mean by "extremely early" retiree.
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The problem in your question is not just not defining extremely early, but not defining retiree. The IRP would have a heart attack.
For example, does Jacob of ERE count currently? Did he count before? etc.
I do think there are a lot more than there used to be because of the growing movement, but it might also be a measurement problem (we have more access to the stories, so we think there are more - similar to how people think the world is more violent, even though it's not, or how autism diagnosis is on the rise, but not necessarily the disorder itself).
Let's just count them.
Rootofgood... Gocurrycracker... BraveNewLife... MMM...Lacking Ambition...
;)
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Good point. I guess I should've moved the closing quotation mark to the end of the word retiree.
As much as it feels like this is a growing movement, in real life the concept of extremely early retirement seems alien to the overwhelming majority of people, so even if the ranks are growing I would guess we're still an exceedingly small percentage of the overall population.
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Extreme ER = to or < 35
ER > 35 but less than standard retirement age
I prefer to think of this as EFI and FI instead since as arebelspy pointed out so many continue to work in one form or another. I also suspect that due to what is often required to become financially independent at such an early age is not typical, it will forever remain a boutique lifestyle only few among us will achieve.
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Another related question is...
And how many ERE as a % read MMM? Now THAT is a question!
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Less than one in 1000 that do it on their own. There are plenty of FI by age 35 though.
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There are always people that manage to beat the system. The difference now is that those of us who try can now band together with the reach and relative anonymity of the internet.
But I don't the movement will ever truly balloon. One of the iron laws of living in a capitalist society seems to be that for most people, expenditures always rise to match income.
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The definitions don't match for the terms, and the individuals seldom match up enough to be categorized. I just think it defies the ability to quantify, even roughly.
If I wanted to quantify it I would give up on terms completely, and ask a question like "what percentage of the population have enough savings prior to the age of X where a 4% withdrawal would provide an amount equal or greater than their annual living expenses." We still wouldn't know an answer, but might be a question that *could* be answered. At that point everyone would start to quibble about the trust fund babies who have income for life but no actual savings, or those with adequate income from savings at this point but not enough to cover them as expenses rise in old age. It just defies our ability to quantify without extremely narrow parameters which then make the quantification of very limited interest or value.
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6
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I wonder how states come up with unemployment numbers, and if that can be used to answer your questions. While the population measured in unemployment figures is "not working but looking for work", you'd want "not working and not looking for work", filtered by some age restriction. That info must be out there somewhere.
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It just defies our ability to quantify without extremely narrow parameters which then make the quantification of very limited interest or value.
No, if someone were actually serious about finding out the answer, all that would be needed is a single-question survey conducted among a sufficiently large sample size to see how many people self-identify as an "extremely early retiree" (without defining the term).
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This probably isn't the angle you are looking for, but you might be able to tease some numbers out of this: http://www.nytimes.com/2014/12/12/upshot/the-rise-of-men-who-dont-work-and-what-they-do-instead.html
If you dig further into the series you can learn more about their methodology, etc.
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I'm not aware of a source of data, but I have yet to come across another individual in the flesh
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I'm not aware of a source of data, but I have yet to come across another individual in the flesh
I take that back. I've met Billy and Akaisha Khaderli. They retired 35 years ago at age 38 as far as I remember. So that brings us to 8 :P
And also Doug "Nords" Nordman who we were fortunate to have brunch with while vacationing in Hawaii
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The data that you want is available.
The Atlanta Federal Reserve Bank has a convenient tool here: https://www.frbatlanta.org/chcs/LaborForceParticipation.aspx
You can select "Reason for Non-Participating" and "Retired" to get a chart.
Note that the numbers are low, and are rounded to the nearest percent, so for more meaningful data, I've attached a screenshot of a pivot-table based on the downloaded data for the percentage of respondents who used "retired" as the reason for not participating in the labor force by age and year of survey.
Note: The other reasons respondents could select were "Disabled/Ill", "In School/Training", "Taking Care of House or Family", "Want a Job, but not Unemployed" and "Other"
The source data for this information is the Census Bureau's Current Population Survey, which I suppose is the answer to OP's question about a "reliable source of information regarding how many extremely early retirees are out there"
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Wait, I thought MMM was self employed :), not "retired" since he still seems to work just only doing the work he wanted
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The data that you want is available.
Thanks, ulrichw! Based on that data, it looks like 2.87% of the US population age 40 or below was categorized as "retired" in 2014, and 1.9% for age 34 or below (for some reason the dataset seems to exclude people exactly 35 years old; the bands skip from 30-34 to 36-40 -- is this a typo?).
Looking at the data over the 1998-2014 time period, there appears to be a definite upward trend in the number of extremely early retirees (and at the same time there was a downward trend in the number of traditional-age retirees). But it's hard to draw any conclusions about how much (if any) of this trend is related to the "extremely early retirement movement" as opposed to trust fund babies, etc.
I would guess that the overall number of extremely early retirees of the likes of MMM, RootofGood, Jeremy/Winnie (Go Curry Cracker), Nords, etc., are so low as to be negligible from a statistical perspective. So the jokes above about counting the number of extremely early retirees on two hands may not be so far from the truth. I wonder if this will change (or is already changing) as the message of extremely early retirement (and the resources on how to accomplish it) become more widespread.
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When you first open the forum and you get the list of sub-forums, at the bottom there are some stats below the "members online". Right now there are 660 people, 420 guests, and 180 members, some hidden, and I'm not sure what makes up the difference.
This is a pretty typical amount of people, I check it sometimes just for the hell of it. Some are lurkers who may never join, or who aren't likely ER candidates. Some are already "old-farts" and can't retire extremely early since they are already beyond 30, 35, 40, 45, whatever your definition. But a large portion of these are the regular contributors who have/will/plan to retire early, some extremely early. And this is just one of many forums devoted to this kind of lifestyle.
But my point is this: I believe you are correct brooklynguy in that the message is spreading, and the movement is growing. In 5-10 years there will not be a dozen, or 100 early retiree's, there will be thousands. I'm glad to be one of them, although I might not fit everyone's "extremely" definition since I will likely be early 40's.
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well as everyone has said, so much depends on what you consider "retired" and what you consider "early"
for example, my friend quit her job to be a SAHM because she and her husband (who still works) are basically FI. He could quit but he loves his job. Is she an ER?
Then there's my uncle who was forced into retirement (commercial pilot) at age 57 because of a heart condition. Is he "early"? Does it matter that he didn't want to retire?
I do see this as a growing movement, but it's still a fringe movement and my sense is that it will remain so. US savings rates have increased and debt has decreased, but the vast majority of workers still aren't saving anywhere near enough to retire before they are in their 60s. 401(k) participation is still abysmal, and the overwhelming majority of people don't max out their IRAs each year. All of which suggests that we won't see more than a small percentage (<<10%) retire early (before 59.5) in the upcoming decade.
Beyond that, who knows. Long-range economic forecasts are about as unreliable as forecasting the weather years into the future.
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Based on that data, it looks like 2.87% of the US population age 40 or below was categorized as "retired" in 2014, and 1.9% for age 34 or below
No, to get the "total percentage under 40 who are retired", you don't add up the percentages in the column (as a proof, ask what percentage of 76+ year olds are retired: add 82.72% + 88.46% = 171.18%?!) To get a precise number, you have to do a weighted average based on the size of each group (which are not equal). Using the downloadable spreadsheet, I calculated 0.57% retired for age 16-40.
That still seems kinda high to me...1 out of every 175 people in that age group are retired? I have about that many Facebook friends, most of them in that age range, and none of them are retired as far as I know. And since they're my friends, they're much more likely than the general US population to be in that relatively small highly-educated, high-earning demographic for which early retirement is possible.
Anyway, what a kickass first post by ulrichw!
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No, to get the "total percentage under 40 who are retired", you don't add up the percentages in the column (as a proof, ask what percentage of 76+ year olds are retired: add 82.72% + 88.46% = 171.18%?!)
Oops. Apparently my laziness extends beyond the task of finding the data into to the task of properly analyzing the data. Thankfully we have kickass posters like ulrichw and yourself to do it for us.
That still seems kinda high to me...1 out of every 175 people in that age group are retired? I have about that many Facebook friends, most of them in that age range, and none of them are retired as far as I know. And since they're my friends, they're much more likely than the general US population to be in that relatively small highly-educated, high-earning demographic for which early retirement is possible.
It still seems kind of high to me too, but while our personal social circles may be over-representative of the MMM-style extremely early retiree candidate population, they are probably under-representative of the dynastic ultra-wealthy non-worker population who probably make up a material portion of that 0.57%.
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The data that you want is available.
The Atlanta Federal Reserve Bank has a convenient tool here: https://www.frbatlanta.org/chcs/LaborForceParticipation.aspx
You can select "Reason for Non-Participating" and "Retired" to get a chart.
Note that the numbers are low, and are rounded to the nearest percent, so for more meaningful data, I've attached a screenshot of a pivot-table based on the downloaded data for the percentage of respondents who used "retired" as the reason for not participating in the labor force by age and year of survey.
Note: The other reasons respondents could select were "Disabled/Ill", "In School/Training", "Taking Care of House or Family", "Want a Job, but not Unemployed" and "Other"
The source data for this information is the Census Bureau's Current Population Survey, which I suppose is the answer to OP's question about a "reliable source of information regarding how many extremely early retirees are out there"
Awesome link. Keep posting more like this, thanks!
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Based on that data, it looks like 2.87% of the US population age 40 or below was categorized as "retired" in 2014, and 1.9% for age 34 or below
No, to get the "total percentage under 40 who are retired", you don't add up the percentages in the column (as a proof, ask what percentage of 76+ year olds are retired: add 82.72% + 88.46% = 171.18%?!) To get a precise number, you have to do a weighted average based on the size of each group (which are not equal). Using the downloadable spreadsheet, I calculated 0.57% retired for age 16-40.
That still seems kinda high to me...1 out of every 175 people in that age group are retired? I have about that many Facebook friends, most of them in that age range, and none of them are retired as far as I know. And since they're my friends, they're much more likely than the general US population to be in that relatively small highly-educated, high-earning demographic for which early retirement is possible.
Anyway, what a kickass first post by ulrichw!
I'm going to ignore ages 16-20 b/c they are such a small group they probably won't affect the calculation much.
I was reading the data as the percentage of people who are unemployed who say they are retired, not percentage of people who say they are retired. So it would be 0.57% of unemployed people are between ages 16 and 40 AND say they are retired.
So we need percentage of people between 16 and 40 who are unemployed for any reason. Looks like labor force participation rate for ages 20-40 is right about 80%. So of the 20% of them not participating, 0.57% are choosing not to participate b/c they are retired. So I get about 0.011% of the population between 20 and 40 are choosing not to work because they are retired.
http://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf says that there are about 82.6 million people between the ages of 20 and 40. if 0.011% of them are not working because they are retired, then that gives us the magic number of, drum roll please...
Around 90,000 people in the US are between 20 and 40 years old and retired.
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Actually, I want to do better, I have all the information I need now with the age ranges off by a year here or there and population stats from 2010.
16-20 year olds:
0.2% of non-partcipants, 64% not participating, 20.04 million people = ~25,700 people (I don't know if I believe this one, I bet there were a lot of high schoolers who said "well shit, I'm totally Retired!!!"
21-25 year olds:
0.4% of 27% of 21.59 million = ~23,300 people
26-30 year olds:
0.64% of 19% of 21.10 million = ~25,700 people
31-35 year olds
0.66% of 17% of 19.96 million = ~22,400 people
36-40 year olds
0.97% of 17% of 20.18 million = ~33,300 people
41-45 year olds
0.91% of 18% of 20.89 million = ~34,200 people
46-50 year olds
1.53% of 20% of 22.70 million = ~69,500 people
51-55 year olds
4.08% of 23% of 22.30 million = ~209,300 people
and up from there.
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Based on that data, it looks like 2.87% of the US population age 40 or below was categorized as "retired" in 2014, and 1.9% for age 34 or below
No, to get the "total percentage under 40 who are retired", you don't add up the percentages in the column (as a proof, ask what percentage of 76+ year olds are retired: add 82.72% + 88.46% = 171.18%?!) To get a precise number, you have to do a weighted average based on the size of each group (which are not equal). Using the downloadable spreadsheet, I calculated 0.57% retired for age 16-40.
That still seems kinda high to me...1 out of every 175 people in that age group are retired? I have about that many Facebook friends, most of them in that age range, and none of them are retired as far as I know. And since they're my friends, they're much more likely than the general US population to be in that relatively small highly-educated, high-earning demographic for which early retirement is possible.
Anyway, what a kickass first post by ulrichw!
I'm going to ignore ages 16-20 b/c they are such a small group they probably won't affect the calculation much.
I was reading the data as the percentage of people who are unemployed who say they are retired, not percentage of people who say they are retired. So it would be 0.57% of unemployed people are between ages 16 and 40 AND say they are retired.
So we need percentage of people between 16 and 40 who are unemployed for any reason. Looks like labor force participation rate for ages 20-40 is right about 80%. So of the 20% of them not participating, 0.57% are choosing not to participate b/c they are retired. So I get about 0.011% of the population between 20 and 40 are choosing not to work because they are retired.
http://www.census.gov/prod/cen2010/briefs/c2010br-03.pdf says that there are about 82.6 million people between the ages of 20 and 40. if 0.011% of them are not working because they are retired, then that gives us the magic number of, drum roll please...
Around 90,000 people in the US are between 20 and 40 years old and retired.
The % for employed, and all the individual reasons for not employed add up to 100%, so if it says 2% of 36 -40 yr olds said they were retired, then that is 2% of the population, not 2% of the 17% that are not working....
It is indeed telling the reasons people say for not working.
"ill", "going to school", "homemaker", "retired", "Want a job but not unemployed", and "other"...
So anyone who has given up looking for work, as well as anyone who is passive income or considers themselves not employed due to seasonal work, and does not want to call themselves a "home maker" or "ill/disabled", only really has "retired" , or "other" as answers, and nearly no one chose "other" as their response. (perhaps because of the design of the query)
EXAMPLE
A depressed 32 yr old married male, out of work that has stopped looking after 2 years -- well, he may have an aversion to calling himself the equivalent of housewife if he has no kids, and may not choose "other", and may in fact call himself "retired" meaning that his partner, parents (or government handouts) are working to support him. -- he does not want a job...
What would a Drug or gambling addict self select into? .. What about competitive amateur athletes? What about a person starting their own business, but not drawing a salary yet and living off cc's and personal savings for now? What bout the student travelling the country for a year before starting to work?
This response "Retired" is therefore mixed up with others, so maybe that 0.57% number is accurate after all?
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I was reading the data as the percentage of people who are unemployed who say they are retired, not percentage of people who say they are retired. So it would be 0.57% of unemployed people are between ages 16 and 40 AND say they are retired.
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The percentage actually is the percentage of the overall population, not of labor force non-participants.
I've attached a screenshot of the non-pivoted data for 2014, and a spreadsheet containing the original dataset I downloaded from the FRB (in case you want to look at it yourself). As you can see, each row adds up to 100% and includes the labor force participants as a whole and the non-participants broken down by reason for non-participation.
Note that the spreadsheet does some of the work for you, because it gives the percentage of the overall population in each age range.
A note on terminology, too:
Even though "Unemployed" and "labor force non-participants" sound very similar, they are two different populations as used in most of the published statistics.
"Unemployed" are people who are not working, but are looking for work.
"Labor force non-participants" are people who are not working and are also not looking for work. This is a little tricky, because non-participants include people who might want to work, but have given up trying to find work for some reason.
By this definition there should be no retired unemployed people.
One reason for the potentially high-sounding number is that these are people who *say* they are retired, not necessarily people who fall into some strict definition of the term. For example, I probably would have said I was retired in a survey back when I took a year off from working in 2007, even though I intended to start working again.
(Thanks, btw, for the positive feedback in this thread - I'll try to keep up the good work :)).
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I would guess that the overall number of extremely early retirees of the likes of MMM, RootofGood, Jeremy/Winnie (Go Curry Cracker), Nords, etc., are so low as to be negligible from a statistical perspective. So the jokes above about counting the number of extremely early retirees on two hands may not be so far from the truth.
Let's not forget the distinction between people who blog about something, and people who do that same something. I'd wager there are hundreds if not thousands of people gardening in the PNW for every person who blogs about it (http://www.nwedible.com/).
Why should early retirement be any different? If anything, I think the ratio of people doing it to people talking about it would be even higher for early retirees.
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Let's not forget the distinction between people who blog about something, and people who do that same something. I'd wager there are hundreds if not thousands of people gardening in the PNW for every person who blogs about it (http://www.nwedible.com/).
Why should early retirement be any different? If anything, I think the ratio of people doing it to people talking about it would be even higher for early retirees.
I wasn't drawing conclusions based on the number of early retirement blogs that exist, but based on the (admittedly unscientific, anecdotal) evidence, which I think suggests that extremely early retirement is exceedingly rare. It wouldn't strike me as all that unusual to come across a PNW gardener (even as a resident of the Northeast), but I think it is exceptionally rare to come across an extremely early retiree (apparently (based on Jeremy's response above), even for someone as immersed in that world as the creator of a popular early retirement blog himself).
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they are probably under-representative of the dynastic ultra-wealthy non-worker population who probably make up a material portion of that 0.57%.
I was initially ignoring this, because I figured "one percenters", though we hear a lot about them, are necessarily rare. Like, 1% or something. But then I realized that a much larger proportion of the "one percenters" are likely to be "retired" (50%? 80%?), and 50% of 1% is 0.5%. So maybe they are an important component. But then I reminded myself of the actual thresholds (pdf) (http://gabriel-zucman.eu/files/SaezZucman2014.pdf).
To be in the top X% in net worth:
1%: $3.9M
0.1%: $20.6M
0.01%: $111M
Certainly I could see 50% of the Top 0.01% being retired. But I'm not sure how many dynastic trust-fund kids under 40 would consider $3.9M a sufficient sum to declare retirement. Also, most of the people in these upper echelons of net worth are likely older than 40 anyway, so there isn't much overlap to create large populations. So now I'm back to thinking that dynastic wealth doesn't have a big impact on the numbers.
I was reading the data as the percentage of people who are unemployed who say they are retired, not percentage of people who say they are retired. So it would be 0.57% of unemployed people are between ages 16 and 40 AND say they are retired.
I initially read it that way too (and typed up half a post under that belief), but then downloading the spreadsheet revealed what others have pointed out: the "retired" percentage is a percentage of the entire population (at that age), not just the out-of-the-workforce population. But yeah, that's not what you would guess from the way their interactive chart is set up.
Let's not forget the distinction between people who blog about something, and people who do that same something. I'd wager there are hundreds if not thousands of people gardening in the PNW for every person who blogs about it (http://www.nwedible.com/).
Why should early retirement be any different? If anything, I think the ratio of people doing it to people talking about it would be even higher for early retirees.
I would think the ratio would be the opposite. Now that we're long past the age of non-monetized livejournal blogs where people just blabbed about whatever was going on in their life, I feel like rarer activities are more likely to be blog (popular) topics than common ones. Unusual things are more interesting to read (and write) about. I feel like 50% of long-distance bike tourers blog. Gardening? Who wants to read about that? Everyone does that. (off the top of my head I can think of at least 4 Facebook friends who garden vs. 0 early-retirees).
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Bolded above leaves out people who retired early many years ago and just accounts for people who are under 40 now and retired. If someone retires at 35, 30 years ago, and is now 65 then they wouldn't be in that data even though they retired very early (assuming they stayed retired) and would be in the "65 and older retired" group. No way to tell at what age they actually retired. So the number of extreme early retirees (and not sure what you put that age at - I retired at 42 and wouldn't consider that extreme ERE or even MMM style) may be much higher than any current "for this year only" data suggests.
That's true. We can use the historical data to try to approximate the total number of early retirees out there today (including people who retired early in past years but have since aged into "normal" retirees), but it would get tricky to try to deal with the year-over-year overlap in people not moving into a new age band.
It's probably sufficient to mine the current data to get a snapshot of the percentage of young retirees as of today; unless the early retirement rate has decreased over time, we can use that number as a proxy for the maximum percentage of early retirees in any given historical year.
So now I'm back to thinking that dynastic wealth doesn't have a big impact on the numbers.
This sounds plausible to me. So let's just use these Census Bureau numbers as aggressive estimates of the number of "extremely early retirees" in existence today, recognizing that there's probably a fair amount of over-counting because the self-selected "retiree" population includes some number of trust fund kids and/or people more properly categorized under one of the other "non-working" categories but who were reluctant to self-select into that group (there's probably also some level of under-counting--e.g., the MMM-style early retiree who self-selects into a "working" category because of his blog-running or carpentry side-jobs--but I think this would be more than offset by the over-counting).
And I'm going to assume that the omission of 35-year olds in the age bands in the government data was simply a typo.
So on that basis, the weighted average percentages are as follows:
0.474% of the US population between the ages of 16 and 35 is retired
0.565% of the US population between the ages of 16 and 40 is retired
I think it's a reasonable assumption that virtually none of the "retired" 16-20 year olds (0.2% of that age group) are "extremely early retirees" in the MMM-style sense, so here are the figures excluding the 16-20 age band:
0.563% of the US population between the ages of 21 and 35 is retired
0.657% of the US population between the ages of 21 and 40 is retired
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0.657% of the US population between the ages of 21 and 40 is retired
That's still like two million people.
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That's still like two million people.
More like 500k, using nawhite's census numbers above.
Still, like skyrefuge said, seems kinda high. Guess we're not that special after all.
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That's still like two million people.
More like 500k, using nawhite's census numbers above.
Still, like skyrefuge said, seems kinda high. Guess we're not that special after all.
Apparently I'm really bad at math.
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they are probably under-representative of the dynastic ultra-wealthy non-worker population who probably make up a material portion of that 0.57%.
I was initially ignoring this, because I figured "one percenters", though we hear a lot about them, are necessarily rare. Like, 1% or something. But then I realized that a much larger proportion of the "one percenters" are likely to be "retired" (50%? 80%?), and 50% of 1% is 0.5%. So maybe they are an important component. But then I reminded myself of the actual thresholds (pdf) (http://gabriel-zucman.eu/files/SaezZucman2014.pdf).
To be in the top X% in net worth:
1%: $3.9M
0.1%: $20.6M
0.01%: $111M
Certainly I could see 50% of the Top 0.01% being retired. But I'm not sure how many dynastic trust-fund kids under 40 would consider $3.9M a sufficient sum to declare retirement. Also, most of the people in these upper echelons of net worth are likely older than 40 anyway, so there isn't much overlap to create large populations. So now I'm back to thinking that dynastic wealth doesn't have a big impact on the numbers.
This is an interesting point. According to http://www.census.gov/people/wealth/data/dtables.html (Table 4), only 2.0% of households with a householder aged 35 or younger have a household net worth in excess of $500,000. And Table 1 shows that the median net worth of households with net worth in excess of $500,000 is $836,000. So 1 out of 4 of all households younger than 35 with net worth greater than $500,000 are retired? That seems improbable.
Note, I'm making a (large) assumption here that households with lower net worth aren't retired, since other major sources of retirement income are largely inaccessible to this age group: Social Security, pensions (which typically require longer vesting periods), and disability income (those people would presumably report as "disabled/ill" in the Census.
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So 1 out of 4 of all households younger than 35 with net worth greater than $500,000 are retired? That seems improbable.
If I'm correctly following how you arrived at that conclusion, I think you are conflating "households" with "people".
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So 1 out of 4 of all households younger than 35 with net worth greater than $500,000 are retired? That seems improbable.
If I'm correctly following how you arrived at that conclusion, I think you are conflating "households" with "people".
Good point. So that probably changes it to ~1 in 6 people under age 35 with household net worth over $500,000 are retired.
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Good point. So that probably changes it to ~1 in 6 people under age 35 with household net worth over $500,000 are retired.
Yep. That seems less improbable (as an aggressive estimate, for all the reasons discussed earlier in this thread).
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There seem to be some assumptions here that I am not sure about:
- Retired people have a household income net worth of more than $500k - this is clearly false.
- No-one appears to have included "alternative lifestyle" types who often live on air - these people would inflate the numbers retired living on less than $500k.
- One of the early comments included the fact that MMM was not retired as far as the data is concerned, and so we should be looking at early FI people. Now, although I didn't know it, I was FI by 35 (ER was later because I wasn't aware that I was FI, or that FI meant ER was a possibility), and I have managed at least two people who were multimillionaires under 35, so they were FI too (I don't know why they worked, and they had both made their money themselves), so early FI might not be as unusual as some here think.
- It looks to me from your figures that early retirement is anything under 55 - when the figures start to be a significant percentage of the people, and even then is is only 1 in 10 between 55 and 60.
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I'm not sure how much I trust self-reported "retired" status in these surveys. I could imagine my younger self ticking the "retired" box in these surveys just because I'm annoyed at having to fill it out. What is retirement, anyway?
For me, a more meaningful metric is labor force participation rate for prime age men. CalculatedRisk has a recent post on the decline in the participation rate across all age groups: http://www.calculatedriskblog.com/2014/12/decline-in-labor-force-participation.html. There is a secular trend toward lower participation, as well as a cyclical component visible after the GFC.
It is a fascinating question for me. I think part of the explanation is women catching up to men in earning power. This allows a dual-income couple to save more, of course, but it also means it might make sense for the husband to take the role of stay-at-home parent. Another factor is asset price volatility, especially real estate and equities, which, as a by-product of increasing inequality, allows a lucky few to retire early. Yet another factor is the high cost of real estate in cities with good jobs. A dual-income professional couple in places like NYC/SF could conceivably save enough to retire to a lower cost location by the time they're ready for kids in their early 30s, but still not have enough money to avoid going massively into debt to buy a nice house in NYC/SF. It's probably too soon to see much of an impact yet, but Obamacare is also likely to contribute to lower labor force participation. Lastly, I believe the income based repayment plans on student loans will push some people into early retirement, such as RootofGood, since the repayment terms act as a 10-15% surtax on earnings.
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Extreme ER = to or < 35
ER > 35 but less than standard retirement age
I know I'm picking nits here, but I'd put the line at 40. Then I'd call the rest before standard retirement age "early." Basically you're putting people who are there at 35 in the same boat as those who do it a full two decades later. That's a lonnnnngggggg time.
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Extreme ER = to or < 35
ER > 35 but less than standard retirement age
I know I'm picking nits here, but I'd put the line at 40. Then I'd call the rest before standard retirement age "early." Basically you're putting people who are there at 35 in the same boat as those who do it a full two decades later. That's a lonnnnngggggg time.
I agree I'd draw the line at 40. Now I am biased, stopping working a few months before my 40th birthday. But damn it I told mom when I was in my 20s I was going to retire before I was 40, cause that sounded cooler. :D
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There seem to be some assumptions here that I am not sure about:
- Retired people have a household income net worth of more than $500k - this is clearly false.
This assumption underlies only beltim's estimate that ~ 1 in 6 people under age 35 with household net worth over $500k are retired (and not the overall estimates of the number of early retirees in the population), and beltim clearly stated that he was making this "(large) assumption."
In any event, I think it's a pretty fair assumption. Obviously not every early retiree (in the sense we're using here--namely, people who accumulated enough to feel comfortable declaring FIRE at a very early age) has household net worth exceeding $500k, but I would guess that the vast majority do. Notably, the Census data includes home equity as part of net worth.
(Note that I'm assuming the word "income" was a typo in your post, and that you meant to refer only to "household net worth")
- No-one appears to have included "alternative lifestyle" types who often live on air - these people would inflate the numbers retired living on less than $500k.
- One of the early comments included the fact that MMM was not retired as far as the data is concerned, and so we should be looking at early FI people. Now, although I didn't know it, I was FI by 35 (ER was later because I wasn't aware that I was FI, or that FI meant ER was a possibility), and I have managed at least two people who were multimillionaires under 35, so they were FI too (I don't know why they worked, and they had both made their money themselves), so early FI might not be as unusual as some here think.
As noted earlier in the thread, we recognize that these estimates are most likely inflated because various subsets of the population show up in the data as "false positives," which I think more than offsets the number of "false negatives."
Obviously, by intentionally failing to clearly define the parameters, it becomes impossible to be objective (and I don't want to become a profiler for the Internet Retirement Police), but I would say that someone like MMM who retired while maintaining some side hustles should be counted as an early retiree while someone who is FI without realizing it (and with no intention of retiring) should not be counted as an early retiree. In this thread, we're trying to estimate the percentage of the population that is FIRE, not FI (I have to assume the latter is substantially larger).
- It looks to me from your figures that early retirement is anything under 55 - when the figures start to be a significant percentage of the people, and even then is is only 1 in 10 between 55 and 60.
If I were forced to draw a bright line, I would tend to agree with NICE! and clifp that 40 is the cutoff for "extremely early retirement" -- I think 55 is more like "traditional early retirement." Not that it matters what I or anyone else thinks on this point.
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You don't need $500K to retire. A $3K/month disability check can be enough.
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You don't need $500K to retire. A $3K/month disability check can be enough.
Like I said, they would presumably be counted in the "disabled/ill" category.
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I was essentially retired from age 16, but didn't get really serious about it until I was in grad school (age 22). I was definitely retired until age 30 or so. I didn't do much of anything, traveled the world a couple times over, had almost no responsibilities, drank and partied like a lord, and lived on a tiny fixed income (grad student stipend). This all unraveled, however, when I foolishly graduated, un-retired and went to work.
These days, having enjoyed a decade or so of fulfilling retirement in my 20s, I'm happy to settle back, work and otherwise take it easy and be bored.
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I was essentially retired from age 16, but didn't get really serious about it until I was in grad school (age 22). I was definitely retired until age 30 or so. I didn't do much of anything, traveled the world a couple times over, had almost no responsibilities, drank and partied like a lord, and lived on a tiny fixed income (grad student stipend). This all unraveled, however, when I foolishly graduated, un-retired and went to work.
These days, having enjoyed a decade or so of fulfilling retirement in my 20s, I'm happy to settle back, work and otherwise take it easy and be bored.
That seems like a good way to go about it, as long as you didn't dig too big of a hole and can still be FI within 15 years or so (a 50% savings rate with no debt level).
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One of the iron laws of living in a capitalist society seems to be that for most people, expenditures always rise to match income.
Only capitalist societies, huh? That must be why the importance of saving for the future instead of spending it all now is the basis of old pre-capitalism fables like "The Ant and the Grasshopper" or mentioned in biblical texts from thousands of years ago. Sorry, but leave politics out of this. Human nature and the tendency to live only for the moment has been around for as long as humans have been around, and their folly has been written about for as long as humans have been writing.
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Extreme ER = to or < 35
ER > 35 but less than standard retirement age
I know I'm picking nits here, but I'd put the line at 40. Then I'd call the rest before standard retirement age "early." Basically you're putting people who are there at 35 in the same boat as those who do it a full two decades later. That's a lonnnnngggggg time.
I agree I'd draw the line at 40. Now I am biased, stopping working a few months before my 40th birthday. But damn it I told mom when I was in my 20s I was going to retire before I was 40, cause that sounded cooler. :D
So close! Best case scenario estimates I will retire at 41.
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I guess technically one can define ERE as they please, however the basis for my suggestion was not arbitrary. This is how Jacob over at ERE defines it and from my perspective it is hard to argue with his credentials on the matter...
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I guess technically one can define ERE as they please, however the basis for my suggestion was not arbitrary. This is how Jacob over at ERE defines it and from my perspective it is hard to argue with his credentials on the matter...
IDK, I think many don't agree with many of his definitions on relevant words. :)
Just claiming words early doesn't make it authoritative, IMO. In terms of "ERE," sure. In terms of calling an early retirement "extreme," maybe not as much. I'd say someone who retired at age 36 retired extremely early.
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So close! Best case scenario estimates I will retire at 41.
Have you done a case study? Maybe the wise mustachians here can help you chop a year and one day off that estimate?
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So close! Best case scenario estimates I will retire at 41.
Have you done a case study? Maybe the wise mustachians here can help you chop a year and one day off that estimate?
I haven't done a case study! But maybe I should. I've been jotting down relevant information and plans in my journal as I figure it out. But a case study might be a great idea. :)
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I think the numbers in this thread are not reliable, perhaps even within an order of magnitude. People don't always tell the truth, or interpret the question correctly on surveys. And they could easily just check the wrong box by accident (the average person isn't very good at following directions). So if you're looking at differences as small as tenths of percents, you are getting HUGE errors there. And definition of "retired" is in the eye of the beholder anyway, so there's more deviation from what some of us would think of as "retired". Some people receiving disability or SSI would consider themselves retired. They would lose their benefits if they did get work. Some young hipstery types call themselves retired, but they don't have any money and will have to work at some point. Some people might be temporarily "retired" for whatever reason.
Also, I think a very small percent of the 0.01% would consider themselves retired. A lot of them are hedge fund managers, CEOs, chairmen of the board, investors, etc. It's really easy to "work" when you're just deciding where to put your excess money. People who are driven enough to accumulate a few hundred million bucks didn't stop when they had enough for a reason.
It's an interesting question. But I think a good answer is "an incredibly small percentage", and likely much, much less than 0.5% of those <40 who retired by saving their own money.
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I think the numbers in this thread are not reliable, perhaps even within an order of magnitude.
Yeah, the amount of unscientific assumptions that went into these numbers basically completely undermines whatever accuracy they might have had anyway. But they're still interesting, as the best educated guess that the formidable collective research and analytical powers of the forum could come up with.
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We should figure out a way to at least determine the # of early retirees (and "extreme" early retirees) in our small community. Even here, I doubt the #s are more than 10-20%.
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We should figure out a way to at least determine the # of early retirees (and "extreme" early retirees) in our small community. Even here, I doubt the #s are more than 10-20%.
A poll!! Probably been done here before but may get "polluted" with the "I'm not ER yet but will be when I'm 30 so checked that box" set. Have to both define ER (working full time still? Not working at all? Or just semi-ER with a PT gig?) first and then put a scale of ages. I think if you put a poll with a "not working at all and age" there will be very few ERers. If you put in a poll with "still working at something and age" you'll gets lots of ERers here.
I¨ll give a tease, but at the same time truth when you did not get it earlier if I remember that how you feel in health and looks matter. I want to retire when I feel like a 30 year old and look like a 30 year and I do look much younger then I am.
However lets get back to numbers... I admire Robert Kioysaki who retired at age 47. Considering he is much older today and very alive I would say 47 is very early though I am not sure I would call it extreme.
What it comes down also that people like me and arabelspy and many other forum members could retire much sooner but we don't want to live even near frugal life no instead we want wealth, richdom and luxury.
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... I admire Robert Kioysaki who retired at age 47....
ok, I just gotta call BS on this notion that Kioysaki has been 'retired' in any shape or form over the last 15 years. All jokes about the Internet Retirement Police (IRP) aside, he doesn't pass the sniff test. Financially Independent? sure. Retired? No.
Also, I don't admire him at all.
What it comes down also that people like me and arabelspy and many other forum members could retire much sooner but we don't want to live even near frugal life no instead we want wealth, richdom and luxury.
In case you missed the memo, MMM isn't about frugality.
I'll leave it up to 'Rebs to decide if he is aiming for a life of 'wealth' and 'luxury'.... i suppose those words could mean vastly different things.
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EREs don't want this to become a movement that gains sizeable mass because the Tax Man always wants to be paid. As soon as noticeable dents in income tax revenue became apparent you could kiss the 5-year Rollover IRA Ladder and other "breaks" like that goodbye. Take enough of that away and ERE would become very very difficult.
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... I admire Robert Kioysaki who retired at age 47....
ok, I just gotta call BS on this notion that Kioysaki has been 'retired' in any shape or form over the last 15 years. All jokes about the Internet Retirement Police (IRP) aside, he doesn't pass the sniff test. Financially Independent? sure. Retired? No.
Also, I don't admire him at all.
What it comes down also that people like me and arabelspy and many other forum members could retire much sooner but we don't want to live even near frugal life no instead we want wealth, richdom and luxury.
In case you missed the memo, MMM isn't about frugality.
I'll leave it up to 'Rebs to decide if he is aiming for a life of 'wealth' and 'luxury'.... i suppose those words could mean vastly different things.
Good then MMM is not about frugality I think I have got that impression mostly.
When it comes to Robert Kioysaki retired at age 47 that is according to his own words. Everyone knows he has done lectures and been landlord at least after that and done other stuff but I think that has been voluntary he likes to be famous and becoming more rich and likely not so much work as a fulltime normal employee.
As for Robert Kioysaki I know he is disliked by many and that is why I love to bring him up as a teaser lol. I do like him however Casey Serin was a sad story, but it does not end well for everyone and Casey Serin did lie about his wealth to the banks when he tried to get mortgage loans. I have never lied to a bank about my financial situation if I try to get an apartment loan i.e mortgage.
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We should figure out a way to at least determine the # of early retirees (and "extreme" early retirees) in our small community. Even here, I doubt the #s are more than 10-20%.
A poll!! Probably been done here before but may get "polluted" with the "I'm not ER yet but will be when I'm 30 so checked that box" set. Have to both define ER (working full time still? Not working at all? Or just semi-ER with a PT gig?) first and then put a scale of ages. I think if you put a poll with a "not working at all and age" there will be very few ERers. If you put in a poll with "still working at something and age" you'll gets lots of ERers here.
I¨ll give a tease, but at the same time truth when you did not get it earlier if I remember that how you feel in health and looks matter. I want to retire when I feel like a 30 year old and look like a 30 year and I do look much younger then I am.
It's not that I didn't understand you when you said that looking and feeling younger then your age matters, I just don't think it matters in terms of being FI or RE as neither will effect your financial goals.
Ok then we have less confusion. I have nothing against you and you have nice funny Avatar picture:). I meant the Avatar comment as a compliment.
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When it comes to Robert Kioysaki retired at age 47 that is according to his own words. Everyone knows he has done lectures and been landlord at least after that and done other stuff but I think that has been voluntary he likes to be famous and becoming more rich and likely not so much work as a fulltime normal employee.
It's the "in his own words" that I do not trust. I can declare myself retired this evening... until I go back to work tomorrow. He's even said he 'came out of retirement' after 3 years. But I don't really care if people are ER or just FI - it's the false marketing that gets me.
I also don't trust that Rich Dad/Poor Dad was a work of non-fiction, even though he listed it as such. IMO his accumulation of wealth through Amway was unethical, and he's an incredible self-promoter. His tirades against education irk me and I completely disagree with a lot of his statements like how investments will make you poor (or in his words "how stupid can you be" to put your money in the market).
As I said, I absolutely believe he's FI by any reasonable measure. But he hasn't just occasionally given 'voluntary' seminars, and definitely worked 'fulltime' in his own enterprise throughout his 50s and into his 60s.
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What it comes down also that people like me and arabelspy and many other forum members could retire much sooner but we don't want to live even near frugal life no instead we want wealth, richdom and luxury.
While it's true I could have ER'd much earlier if I didn't want such a large ER budget, I'll still be done by 29, so I'm probably not the best example of someone who's waiting to ER to build up more.
I'll leave it up to 'Rebs to decide if he is aiming for a life of 'wealth' and 'luxury'.... i suppose those words could mean vastly different things.
I absolutely am!
But my standard of wealth and luxury wouldn't be considered such by most Americans (though it would seem quite lavish and extravagant to many people in third world countries).
I live in tons of abundance, wealth, and luxury. :)
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When you first open the forum and you get the list of sub-forums, at the bottom there are some stats below the "members online". Right now there are 660 people, 420 guests, and 180 members, some hidden, and I'm not sure what makes up the difference.
This is a pretty typical amount of people, I check it sometimes just for the hell of it. Some are lurkers who may never join, or who aren't likely ER candidates. Some are already "old-farts" and can't retire extremely early since they are already beyond 30, 35, 40, 45, whatever your definition. But a large portion of these are the regular contributors who have/will/plan to retire early, some extremely early. And this is just one of many forums devoted to this kind of lifestyle.
But my point is this: I believe you are correct brooklynguy in that the message is spreading, and the movement is growing. In 5-10 years there will not be a dozen, or 100 early retiree's, there will be thousands. I'm glad to be one of them, although I might not fit everyone's "extremely" definition since I will likely be early 40's.
I thought it would be interesting to reply to this post from 2015 with current 2017 numbers, to see how things have changed..
right now there are 681 Guests, 223 Users, 17 Hidden. So it seems the guests have gone up by a lot, and the users by a little
Funny.. I always imagined there to be way more people in this
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When you first open the forum and you get the list of sub-forums, at the bottom there are some stats below the "members online". Right now there are 660 people, 420 guests, and 180 members, some hidden, and I'm not sure what makes up the difference.
This is a pretty typical amount of people, I check it sometimes just for the hell of it. Some are lurkers who may never join, or who aren't likely ER candidates. Some are already "old-farts" and can't retire extremely early since they are already beyond 30, 35, 40, 45, whatever your definition. But a large portion of these are the regular contributors who have/will/plan to retire early, some extremely early. And this is just one of many forums devoted to this kind of lifestyle.
But my point is this: I believe you are correct brooklynguy in that the message is spreading, and the movement is growing. In 5-10 years there will not be a dozen, or 100 early retiree's, there will be thousands. I'm glad to be one of them, although I might not fit everyone's "extremely" definition since I will likely be early 40's.
I thought it would be interesting to reply to this post from 2015 with current 2017 numbers, to see how things have changed..
right now there are 681 Guests, 223 Users, 17 Hidden. So it seems the guests have gone up by a lot, and the users by a little
Looks like guests have gone up 62% and registered users have gone up 24% in two years. That's not too bad of growth. The growth rate itself has definitely slowed down from the early years, but now the absolute numbers are so large it's hard to keep up, even with slower growth.
10% growth on tens of thousands is much bigger than 100% growth on hundreds.
Funny.. I always imagined there to be way more people in this
That's at any one instant. How many check in once/mo? How many just check the blog?
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Funny.. I always imagined there to be way more people in this
That's at any one instant. How many check in once/mo? How many just check the blog?
Then of course there's those of us who just stay logged in "forever" and are listed as being online, but read posts once every couple of days.
I'm curious to see some sort of breakdown of the number of posts/day and posts per day per unique user.
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Then of course there's those of us who just stay logged in "forever" and are listed as being online, but read posts once every couple of days.
I'm curious to see some sort of breakdown of the number of posts/day and posts per day per unique user.
Even if you check "stay logged in," you're only counted active if you've been on the site in the last 15 minutes (clicked to open a thread, posted, etc.). If you open the forum in a tab and leave it open, you won't be listed 20 minutes later, as you aren't an active user or "online" at that point.
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Then of course there's those of us who just stay logged in "forever" and are listed as being online, but read posts once every couple of days.
I'm curious to see some sort of breakdown of the number of posts/day and posts per day per unique user.
Even if you check "stay logged in," you're only counted active if you've been on the site in the last 15 minutes (clicked to open a thread, posted, etc.). If you open the forum in a tab and leave it open, you won't be listed 20 minutes later, as you aren't an active user or "online" at that point.
huh. g2k. any stats on the number of posts/day/user or anything like that?
Just curious mostly....
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any stats on the number of posts/day/user or anything like that?
Just curious mostly....
| Yearly Summary | | New Topics | | New Posts | | New Members | | Most Online | | Page views | |
| 2017 (YTD) | 7810 | 254697 | 4357 | 1463 | 76775841 |
| 2016 | 14215 | 438185 | 6594 | 1205 | 123815757 |
| 2015 | 16970 | 416478 | 8796 | 1162 | 89990615 |
| 2014 | 15073 | 311363 | 9234 | 1093 | 65085921 |
| 2013 | 8388 | 143272 | 5402 | 463 | 26704825 |
| 2012 | 3123 | 46253 | 2595 | 199 | 6208454 |
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I wonder how states come up with unemployment numbers, and if that can be used to answer your questions. While the population measured in unemployment figures is "not working but looking for work", you'd want "not working and not looking for work", filtered by some age restriction. That info must be out there somewhere.
That I can answer. A friend whose husband was unemployed explained this to me, and I was surprised.
You are "unemployed" if you are currently collecting unemployment checks from the state. On the other hand, if you've been out of work for five years and your unemployment benefits have "run out", you are no longer "unemployed". You may not have a job yet, and you may still continue looking for a job, but if you've exhausted your unemployment benefits, you are no longer "unemployed" according to the state.
So "unemployed" really means collecting checks, not that you're out of work.
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I wonder how states come up with unemployment numbers, and if that can be used to answer your questions. While the population measured in unemployment figures is "not working but looking for work", you'd want "not working and not looking for work", filtered by some age restriction. That info must be out there somewhere.
That I can answer. A friend whose husband was unemployed explained this to me, and I was surprised.
You are "unemployed" if you are currently collecting unemployment checks from the state. On the other hand, if you've been out of work for five years and your unemployment benefits have "run out", you are no longer "unemployed". You may not have a job yet, and you may still continue looking for a job, but if you've exhausted your unemployment benefits, you are no longer "unemployed" according to the state.
So "unemployed" really means collecting checks, not that you're out of work.
It's usually defined as "not employed and looking for work," whether you're getting benefits or not.
If you have no job, and have given up looking, you don't count. But just cause you have no benefits, if you're looking, I believe you count.
Someone correct me if I'm wrong, please. :)
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I wonder how states come up with unemployment numbers, and if that can be used to answer your questions. While the population measured in unemployment figures is "not working but looking for work", you'd want "not working and not looking for work", filtered by some age restriction. That info must be out there somewhere.
That I can answer. A friend whose husband was unemployed explained this to me, and I was surprised.
You are "unemployed" if you are currently collecting unemployment checks from the state. On the other hand, if you've been out of work for five years and your unemployment benefits have "run out", you are no longer "unemployed". You may not have a job yet, and you may still continue looking for a job, but if you've exhausted your unemployment benefits, you are no longer "unemployed" according to the state.
So "unemployed" really means collecting checks, not that you're out of work.
It's usually defined as "not employed and looking for work," whether you're getting benefits or not.
If you have no job, and have given up looking, you don't count. But just cause you have no benefits, if you're looking, I believe you count.
Someone correct me if I'm wrong, please. :)
There are a bunch of different ways you can look at it.
https://unemploymentdata.com/what-is-u-6-unemployment/
"The six classifications of unemployment that the Bureau of Labor Statistics tracks are:
U1 is Percentage of labor force unemployed 15 weeks or longer.
U2 is Percentage of labor force who lost jobs or completed temporary work.
U3 is Official unemployment rate per the International Labor Organization definition. It occurs when people are without jobs and they have actively looked for work within the past four weeks.
U4 is U3 + “discouraged workers”, or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
U5 is U4 + other “marginally attached workers”, or “loosely attached workers”, or those who “would like” and are able to work, but have not looked for work recently.
U6 is U5 + Part time workers who want to work full-time, but cannot due to economic reasons, i.e. the economy is bad so their employer cut their hours and they can’t find other work."
You could also look at those "not in the labor force"
https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm
In 2014, 87.4 million people 16 years and older neither worked nor looked for work at any time during the year. (See table 1.) Of this group, 38.5 million people reported retirement as the main reason for not working. About 16.3 million people were ill or had a disability, and 16.0 million were attending school. Another 13.5 million people cited home responsibilities as the main reason for not working in 2014, and 3.1 million individuals gave “other reasons.”
Which goes along with labor force participation rate
https://www.forbes.com/sites/aparnamathur/2016/05/25/the-concerning-drop-in-workforce-participation-and-role-of-family-friendly-policies/#396387905c6c
The civilian labor force participation rate has dipped to 62.8%, the lowest level in nearly 30 years. Excluding the unemployed who are looking for work, the share of the population that is actually employed is an even lower 59.7%
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I wonder how states come up with unemployment numbers, and if that can be used to answer your questions. While the population measured in unemployment figures is "not working but looking for work", you'd want "not working and not looking for work", filtered by some age restriction. That info must be out there somewhere.
That I can answer. A friend whose husband was unemployed explained this to me, and I was surprised.
You are "unemployed" if you are currently collecting unemployment checks from the state. On the other hand, if you've been out of work for five years and your unemployment benefits have "run out", you are no longer "unemployed". You may not have a job yet, and you may still continue looking for a job, but if you've exhausted your unemployment benefits, you are no longer "unemployed" according to the state.
So "unemployed" really means collecting checks, not that you're out of work.
It's usually defined as "not employed and looking for work," whether you're getting benefits or not.
If you have no job, and have given up looking, you don't count. But just cause you have no benefits, if you're looking, I believe you count.
Someone correct me if I'm wrong, please. :)
'Rebs has it mostly right. The headline "unemployment rate" that is determined by the Bureau of Labor Statistics (BLS) defines unemployment as Individuals who are willing and available to work, and who have actively sought work within the past four weeks. Those with temporary, part-time or full-time jobs are considered employed, as are those who perform at least 15 hours of unpaid family work
This is called the "U-3" (Unemployment 3) number that every major newspaper published when it says "the country's unemployment rate dropped/rose to x.x%"
It does not matter how long the person has been out of work, only that they have actively sought work in the last month.
Also important, this number is just one of six figures the BLS puts out each month. Each calculates a slightly different labor statistic. For example, the U4 rate includes "discouraged workers" - those that would like to work but have given up working and assume there are no jobs around. The U4 will always be higher than or equal to the U3 number.
U6 includes marginally attached workers + part time workers + those who have been discouraged and given up work. Lately people have started referring to this as the "real unemployment rate" - BUT, it's no better nor worse than U3; it just measures different things.
Unemployment has nothing to do with whether you are collecting unemployment checks or not. The data is based on monthly surveys taken by the Current Population Survey (CPS), and contacts ~60,000 households/month. It is NOT based on the number of people collecting unemployment insurance (UI) as this would skew the data against people who, for various reasons, either cannot or do not receive unemployment.
www.investopedia.com/terms/u/unemploymentrate.asp#ixzz4mWCYuhnE
(http://www.investopedia.com/terms/u/unemploymentrate.asp#ixzz4mWCYuhnE)
edit: DRAT! anonymouscow beat me to it! And this took me so long to write!
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Before this question can be answered, I think we need to nail down what is considered early and what is considered extremely early. But even that is not straight forward.
For early retirement, I would say that if you are younger than the earliest age when you can generally start collecting Government provided retirement benefits, you are considered early.
So for the American MMM forum members, before age 62 you count as early. 62 being the earliest age you can generally* start collecting SS benefits.
*If you start collecting due to disability, collecting deceased spouses benefits, ect, I think it's still considered early if you are younger than 62.
Other countries that have defined benefits have different ages for eligibility, so for that country, this figure could be different. I know nothing about the benefits system in Canada and Australia and I know we have a large number of members from those countries so they can chime in.
I think extremely early is actually easier to define as I think the best metric is someone who has retired X years before they can collect the Government provided retirement benefits. As we are labeling it 'Extreme' I think a good ground rule is 20 years earlier. So, based on the US SS age, if you are younger than 42, you are considered Extreme.
42 is also the answer to Life, the Universe, and Everything. Coincidence? Probably.
I think this is a pretty reasonable basis when one considers that typical American High School graduation is when you are 17-19 years old. If you immediately attend college and graduate with a 4 year degree, you are looking at 21-23 yrs old. That puts 42 at the halfway mark between when you leave school and the earliest most people would count on being able to retire. To retire before this generally implies a pretty significant devotion of time and energy to figuring out what you want to do with life beyond the typical, and working towards it with sustained energy, especially considering the debt loads many students have now.
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In the UK I would say the vast majority who retire do so around the 60-65 mark. The people who stop between 55 and 60 tend to be public sector, police, fire, council etc. Some blue chip types etc. Tend to be the higher paid section of society.
Under 55. I would actually say its quite rare. So in the UK 55 is considered "early".
State pension age is 67 but probably going up to 70 ish here soon. Personal pension age is 55 but likely to go to 60.
So in the future anyone who wants to retire early will have a much longer gap to fill. If you retire at 45 now you have to fill a gap of 10 years. If the changes come in then it would be maybe 15 years.. 33% more. Ouch.
I also suspect state pension to be means tested at some point in the future.
All this means, IMHO, that early, very early and extreme retirement dates will actually get older in years to come. 55 is early now, but it could well be more like 60 in a few years. Very early might be 55 where it used to be 50 or even 45. The goal posts keep moving!
We might also expect a reduction in life time allowance, removal of the 40% tax band etc - which is a backwards step but there you go.
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The problem that occurs if they keep increasing the age you can retire is that many people do not retire by choice. They retire because their health is not good enough to keep working, they lose their job and can't find another one or they need to care for a sick spouse.
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In the UK we have free healthcare though and state pension is 8k PA.
I guess the govt are looking at it from the angle that life expectancy is going up not down.
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Just very roughly making up numbers, let's say most people retire at 62 +/- 3 years. (This is roughly true in the US I believe: half of people are retired by 60 - 65, but it's hard to track).
Then for your definitions it's a matter of picking how stringent you are:
Say early retirement is below that off: so 59 or younger.
For extreme early retirement, decide if are you a three sigma or six sigma person:
three deviations: 53 or younger is extreme (you can round to 55 if you want)
six deviations: 44 or younger is extreme (you can round to 45 if you want)
Sounds as good as any definitions to me. And I haven't had a chance to talk about standard deviations and abuse statistics in a conversation for a while.
So how extreme is extreme? (Keeping in mind that I made +/- 3 years up for the sake of convenience)
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I don't think it'll be a normal curve, it'll peak much higher toward the middle and have fairly narrow tails.
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Being newly 27 here and aiming for another 4-5 years, I fall into the "ERE" category.
I don't know a single person going on a similar path IRL, and I do consulting and meet swaths of new people at each client site. This is a subject that we actually talk about occasionally, mostly positively.
Keeping in mind, I work in highly paid corporate offices.
I can't imagine the number is very high. My guess is that even most people on THESE FORUMS won't FIRE before 35. The ones that do actually make it are reasonably famous to "us"
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Just very roughly making up numbers, let's say most people retire at 62 +/- 3 years. (This is roughly true in the US I believe: half of people are retired by 60 - 65, but it's hard to track).
Then for your definitions it's a matter of picking how stringent you are:
Say early retirement is below that off: so 59 or younger.
For extreme early retirement, decide if are you a three sigma or six sigma person:
three deviations: 53 or younger is extreme (you can round to 55 if you want)
six deviations: 44 or younger is extreme (you can round to 45 if you want)
Sounds as good as any definitions to me. And I haven't had a chance to talk about standard deviations and abuse statistics in a conversation for a while.
So how extreme is extreme? (Keeping in mind that I made +/- 3 years up for the sake of convenience)
I like 3 sigma. That makes me an extreme ER'er. 😆
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Everyone I know who retired extremely early ended up going back to work, either out of choice or necessity. One could even argue Pete has been pretty hard at work on the blog which provides him such a fabulous income. So, it seems it is not that hard to retire extremely early, it is hard to retire early and stay retired.
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Everyone I know who retired extremely early ended up going back to work, either out of choice or necessity. One could even argue Pete has been pretty hard at work on the blog which provides him such a fabulous income. So, it seems it is not that hard to retire extremely early, it is hard to retire early and stay retired.
IRP?
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Everyone I know who retired extremely early ended up going back to work, either out of choice or necessity. One could even argue Pete has been pretty hard at work on the blog which provides him such a fabulous income. So, it seems it is not that hard to retire extremely early, it is hard to retire early and stay retired.
IRP?
Maybe, maybe not. Doesn't seem like he's questioning that they were retired, but is saying some unretired. Under Pete's definition, that's unpossible, but I don't think anyone with a different definition is automatically IRP. :)
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Everyone I know who retired extremely early ended up going back to work, either out of choice or necessity.
How many extremely early retirees do you actually know in the flesh? To the best of my knowledge, I know exactly zero (other than those I've met through this forum). Despite the enormous growth of the FIRE blogosphere and increased coverage in mainstream media channels over the last several years, I would guess that the percentage of the overall population consisting of extremely early retirees (or even aspiring extremely early retirees) remains exceedingly low.
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How many extremely early retirees do you actually know in the flesh?
I know two couples work retired in the 1990s (in their 30s and other early 40s) because they felt they had enough. Each lasted 3-5 years before returning to work full time after watching their investments fall in 2000. I also know two guys who started a huge cable tv channel in the early 1990s and sold it for megabucks in their early 40s. Both moved away from Hollywood to raise families but both went back to work within a couple years. I know several colleagues who elected to retire in their early 50s from my employer with huge packages but all went work consulting or with other companies after a while. Another friend involuntarily retired in the late 80s when real estate busted. He went on food stamps while trying to find work but died of alcoholism at age 49. I know another guy who I think is retired now at age 50 but his wife still works and has a huge income. I also know a couple who retired in their mid 50s two years ago who are still retired but the wife has a major health issue they are fighting. I don't see her returning to work but imagine her husband could if she doesn't make it. That reminds me I know another lady senior executive who did retire in her mid 40s to care for her sick husband. They had saved millions. He passed away and she eventually returned to work. I know a physician who retired around age 55 but works full time managing his family foundation; in retrospect he was sort of working for fun all along considering how wealthy his family is.
I can also think of a handful of people who never really had conventional jobs because they have large incomes from oil and gas royalties but most of them also had some form of daily work (one worked in an art gallery, another made furniture, several others ran retail businesses or invested in commercial real estate).
My father retired at 55 with a great pension and health benefits. He immediately found a menial job and later a consulting gig. My mother is over 80 and still working.
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How many extremely early retirees do you actually know in the flesh? To the best of my knowledge, I know exactly zero
I met one, as a starving student while travelling the world, long before I ever had a real job. How do you think I got started on this path in the first place? We met on a beach in Australia and it wasn't ever clear to me if his female companion was his wife or just some hanger-on he picked up along the way.
The next year I met a couple in the 40 who had quit their jobs in Arizona and sold their house to buy an RV and drive around New Zealand. They figured they might have to go back to work in the 60s if the market didn't hold up, and were totally fine with that. They were basically taking their retirement early, while they were still healthy, and fulfilling a lifelong dream. It just happened to require that they abandon the safety and security of their oppressive office jobs, and break the mold of workaday routine that binds most people into small lives.
One of my primary motivations for retiring early is to be that roll model for other young people.
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I think some people return to work because of the social interaction or needing something to do. My Dad retired at 53 because of ill health and then my Mom by 59 because she had to take care of him by then. I bet this happens more then you would like to think. I was fully retired for 7 months before deciding to work on a p.t. basis for myself and teaching an online college class. I only know 2 couples that retired in their 40's and never went back to work. I heard through another person that both ended up sorry in their 60's because their $ wasn't going as far and they could not do the things like travel, eat out etc that their friends were doing.
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Everyone I know who retired extremely early ended up going back to work, either out of choice or necessity.
How many extremely early retirees do you actually know in the flesh?
I know one couple. They sold a company and retired maybe 15 years ago. They both have enough hobbies and have no desires or needs to return to work.
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I don't think it'll be a normal curve, it'll peak much higher toward the middle and have fairly narrow tails.
You are most certainly right (and I was making up numbers). Chart, from this article (http://time.com/money/4584900/ages-people-retire-probably-too-young-early-retirement/):
(https://timedotcom.files.wordpress.com/2016/12/161201_limrachart.png?w=560)
Turned into a more conventional presentation, because I dislike the above visualization:
(http://i.imgur.com/rtxdea1.png)
(There's some errors in the first graph, they duplicate labels, and the totals add to more than 100%, I made some guesses at the edges to clean it up)
There's a very small group of very early retirees (<55), a bump of early retirees (55-60), a big spike of conventional retirees at (61-65) and then a longish tail of older retirees. It's asymmetrical and you are right that it is not normally distributed. Big question above is how LIMRA get's their data, I couldn't find exact details, but most work I've seen before looks at census burea data and then makes guesses/estimates based on labor force participation, but they usually exclude very young (below 50 or 40) from counting as a retiree.
To the earlier point, even if it's not normally distributed, you can calculate mean and standard deviation based on the population data, but you can use it to extrapolate less without knowing what the distribution looks like. It's 65 +/- 7 based on the chart above (and some 1st degree approximating by me), but almost certainly not normal.
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What scares me about this almost decade long Bull Market is that most ER'er have no concept of what a Bear Market is and how it WILL affect your life and finances. Most (even on this forum) will need to return to work. Seen it happen 3 times now in my investing life but this is a crazy long run in the equities market.
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What scares me about this almost decade long Bull Market is that most ER'er have no concept of what a Bear Market is and how it WILL affect your life and finances. Most (even on this forum) will need to return to work. Seen it happen 3 times now in my investing life but this is a crazy long run in the equities market.
I am more concerned about the proposed budgets that don't include home maintenance, and the number of posters who consider car repairs unforeseen emergencies.
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I'm aiming for barebones FI by 30 but will likely take that new status and use it to spend time on more fulfilling entrepreneurial ventures.
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I have friends (married couple) that just retired at 37, and another set of married friends that should cut the cord in about 5 years at 42. To me anyone under 40 would be extreme early retirement.
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What scares me about this almost decade long Bull Market is that most ER'er have no concept of what a Bear Market is and how it WILL affect your life and finances. Most (even on this forum) will need to return to work. Seen it happen 3 times now in my investing life but this is a crazy long run in the equities market.
I am more concerned about the proposed budgets that don't include home maintenance, and the number of posters who consider car repairs unforeseen emergencies.
Or thinking that if they can live on 20k in their 20s and 30s, they'll be able to live on the same budget in their 50s and beyond. They have no idea what might come in terms of their own health and vitality, or what unexpected events will occur.
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What scares me about this almost decade long Bull Market is that most ER'er have no concept of what a Bear Market is and how it WILL affect your life and finances. Most (even on this forum) will need to return to work. Seen it happen 3 times now in my investing life but this is a crazy long run in the equities market.
Meh, im accumulating for a long time still so bring on the Bear! Even for those who are ER'd atm, though.
Isn't this site's underlying message that, we are smart, adaptable people that are willing to optimize our lives with little regard to the short term... We`re Mustachians! Market goes to hell, we use the combination of cultivated skill sets + incredible world we live in to make enough that we dont need to pull to much out.
I mean ffs, its not like you need much money by normal standards to live a good life if you have no debt and a willingness to not waste. Even just a small 15-20k a year or something could mean you have to pull out just 50% of what you normally would(less for some people).
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What scares me about this almost decade long Bull Market is that most ER'er have no concept of what a Bear Market is and how it WILL affect your life and finances. Most (even on this forum) will need to return to work. Seen it happen 3 times now in my investing life but this is a crazy long run in the equities market.
Meh, im accumulating for a long time still so bring on the Bear! Even for those who are ER'd atm, though.
Isn't this site's underlying message that, we are smart, adaptable people that are willing to optimize our lives with little regard to the short term... We`re Mustachians! Market goes to hell, we use the combination of cultivated skill sets + incredible world we live in to make enough that we dont need to pull to much out.
I mean ffs, its not like you need much money by normal standards to live a good life if you have no debt and a willingness to not waste. Even just a small 15-20k a year or something could mean you have to pull out just 50% of what you normally would(less for some people).
Given that people on this forum are accounting for BEAR markets using the SWR's I can't see exactly why it would be the end of FIRE for us all? Seems a little doom-and-gloom if you ask me.
If it turns out to be worse than the worst yet, AND you retired right before it, the sequence of returns could ding you pretty hard, but again, we are talking about an awfully unlucky subject.
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If it turns out to be worse than the worst yet, AND you retired right before it, the sequence of returns could ding you pretty hard, but again, we are talking about an awfully unlucky subject.
The often-overlooked nature of the SWR success percentages is that they do not apply to subjects, but to years. If 2017 is going to be one of the 4% failure years, then every single person who retires on 4% this is going to fail together. It would be a 100% failure rate for the class of 2017. See the difference?
Yes, those folks would be unlucky, but they would all be unlucky together at the same time, and that doesn't feel like luck.
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Isn't this site's underlying message that, we are smart, adaptable people that are willing to optimize our lives with little regard to the short term... We`re Mustachians!
Absolutely, but this message has gotten diluted as the site's ranks have swelled. So it always warms my mustache to hear an invocation of core principles, which bear repeating amid this board's current climate of undue pessimism and advancing consumerist creep.
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I agree with the above posters about how anyone who moves even 20% down the path to FIRE and implements some of its principles will be very well placed to weather any financial storms that come our way over the next few decades. This point has been made many times on this forum, and also in a post or two by MMM himself.
Having said that, I and I think most of the people here know that nothing is certain, and there is a chance (not large but it's there) that our stash will be too depleted at some point in the future that we will essentially 'fail' at FIRE. I personally don't consider this 'failing' as the several years to several decades you had in the meantime of living life on your terms were hopefully more than worth it.
Most err on the side of caution - I think a lot of the people who FIRE from this forum will see after a decade or two that they could have gone earlier.