Retirement is a myth for 80% of people.

Ever since you were in school, somebody at some point likely told you to stock away money for retirement. If you were anything like me – you nodded and agreed yet proceeded to do precisely nothing about it. Heck, even most go-getters probably capped off at opening a retirement account and perhaps putting a piggy bank’s worth of money into it; it just isn’t practical to tell young people these things because it makes no sense: “you want me to put away money I barely have to maintain my current needs for a faraway date that I don’t even know if I’ll get too?”

The classic young, wild, & free take. Lets not forget about that great spirit known as ambition: Who knows, maybe you’ll start a cozy business that sells for millions? Or find an already wealthy spouse? Get famous?

The future is so abstract, so many branching trees from here to there and each decision containing a seed of hope that it’ll be the one to catapult you to wealth & security. Not even accounting for opportunity cost:

“Why save now? I gotta get out there and take risks! Live life!” many will likely say. Grabbing the bulls by the horns.

I’m 23, so I’m not speaking this from an already retired perspective – but rather, contemplating the entire concept as a whole. Here’s what I know: In America, 53% of baby boomers have NO PLANS to save, and just 9% ish of middle income workers save 15% of their income for retirement (Source). This number drops down to 4% of people (who save 15% or more) for low income. This is a crisis situation, most people are literally banking on social security/safety nets + continued work to keep them going, which is also worrying because what if you get a chronic illness that prevents you from working? Or cancer? What if you get replaced by automation? Or worse, what if something happens to those social safety nets? (Unlikely, but not impossible)

Doing the math

*Disclaimer: I am not a financial advisor and all financial information provided here is purely for my own research purposes and is not to be construed as advice – merely food for thought, please speak with an actual advisor if you need urgent advice albeit I never would cause most of them don’t do shit unless you have money and tbh you can learn the basics yourself w/ a couple of books 🙂 *

This led me down a rabbit hole from that statistic alone, I started with: What is classified as middle income? (It’s between $50K-$150K). From there, if I assume I make the upper end of that at $150K (not even factoring in taxes which would significantly lower my savings rate) – that’s $22.5K / year (15%) saved under the most optimistic scenario for this income. Assuming you make that for 35 years from age of 30 (to not account for the early years of “finding yourself”/mistakes/climbing the ladder) that gives you $788K in savings , this is if you work till typical retirement age of 65 (with no raises, unlikely so you’d likely earn more but if you lose work for any extended period of time , that’s lost years) also, this is working 35 years without skipping a beat – very few professions can do that anymore.

After factoring in investments and going with a conservative 5% ROI on that portfolio. I should have 2.3M by the age of 65 using this retirement calculator. But wait – how much do I need per year?

That varies widely based on lifestyle but it ranges from 1 to 1.7M for most for their whole retirement. Phew! I made the cut! I beat my goal by $600K!

Ooooo yippie! What if I have a diligent spouse who makes as much and does the same thing? We could not only retire but live large!

But wait….

How many people make $150K per year? (Some say 9% of Americans will reach that number or higher, but remember- the % of Americans is even lower factoring those who actually take home 150K after taxes rather than raw salary before taxes).

So in order to get to this magical land of really happy cozy retirement and spoiling the grandkids, I have to potentially grind up a corporate ladder or business of some sort into the top 10% of performers nation wide and set aside at least 22.5K a year?

Admittedly – it’s not impossible for enterprising individuals who are exploring every avenue for income, putting in the overtime, etc. But when I write this, I’m thinking of the everyman – not Ivy Grads or Valedictorian types or innately driven ones with a direction – aka who’ve gotten themselves to the point of reaping these sorts of fruits. The everyman (or woman) is the one who’s battling family issues, never enough money, paying for children’s expenses, supporting their parents, upgrading their skills multiple times, potential divorces, etc.

Let’s not forget the ever illusive “lifestyle creep” that gets soooo many people who make this kind of money. Before you know it you are financing two cars, nice wardrobes, high quality food, etc , and also trying to put away at least 2-3 years of schooling for each of your children, and what about the cost of raising a child as a whole?

Fuel costs, Food Cost, Mortgage costs, Insurance costs, etc.

That truly is the great irony of being a top 10% earner, ahead of everyone and no one at the same time. Now look, a diligent and sharp family w/ dual earners in this bracket has nothing to fear. But by its very nature – 90% of families will not achieve what this family has, so why should I bank on this scenario as being the likely scenario?

If I drop this income down to even 100K (99K+ classifies the top 20% of Americans) – using the same retirement calculator above, I am left with 1.4M which puts us juuuust midway between our desired retirement goal of between 1- 1.7M. That’s right, making 6 Figures with a 5% ROI is still gonna put you slightly under our upper bound and that’s not factoring in inflation.

Also not factoring in expenses for children’s education, trips abroad, spousal support, potential divorces (which half of marriages end in), etc. And then lets reach into some more plausible earning potentials for most lower end/everyman type of folk of 80K a year – you simply wouldn’t have enough or be lucky to hover around the 1M mark when its all said and done.

That’s not to say you can’t have a cozy retirement, but you’re definitely gonna have to budget/ration accordingly as you’ve been doing for the last 35 years if you peaked at 80k/year. If social security pulls through, then you might be in a pretty solid spot for your monthly budget, just focus on the simpler pleasures in life and you just might squeeze through.

But as I look ahead to the future: questionable job markets, recessions that are honestly bordering on depressions in terms of cost of living for many of our poorest folks (many barely got out of 2008 and that was before Covid-19), automation that’s gonna have a massive impact for countless professions in the coming decade, climate catastrophes/natural disasters on the horizon, etc.

when not even our traditionally cushy well paid doctors and lawyers might be able to get out of it unscathed….

And the government/financial companies still want to look at me dead in the eye and tell me that retirement planning is logical? I don’t know who’s actually more irrational – retirement planners giving this advice or young people who ignore it.

It’s a pipe dream for average people. For the typical 60K/year individual who will hover to 80K very slowly over the course of their career and cap out somewhere around there: At best it’s gonna be a very restrained/dull retirement if your children move out and away, at worst – its Walmart greeting / odd jobs while not being sure your social security is gonna cover the food + Power Bills/Rent.

And this is provided that you STILL sacrifice 30+ working years for your corporate overlords from the age of 30 (minimum, many start sooner) to find a stable gig (those positions are dwindling year by year)…

If you do achieve the necessary goals then you likely have made HEAVY sacrifices for countless years to do it – you sacrificed your youth just to survive the end….and on your deathbed, would you be proud of that?

What a shitty return. And in a bleak future with massive uncertainty to boot unlike those who retired in the late 20th century with a world that was only going upward with the internet, phones, and funky haircuts.

Like damn, seriously? I just can’t believe it.

Which got to me thinking, if I wasn’t one of the top 10% lucky ones, what would I do?

New Measures

This is what originally led me down the path to simple living, alternative forms of work, and alternative measures to Keystone Measures of Wealth. I come from a lower income immigrant family, not only is there not enough money to go around – much of our culture relies on everyone supporting everyone else. Kids help out with parents if they are financially short, family lives nearby to assist or simply go back home and enjoy a reduced cost of living in many cases.

I can hustle and bust my ass off (which I fully intend to do)- but for the world that’s coming, I have no idea if I’ll actually reach my 150K/year of comfortable living. I can’t live without a contingency to a glaring problem – I’m not one of those people who can simply drown themselves in their pleasures and forget about it.

I sat down and this is what I came up with….

The Alternative Retirement

If I couldn’t retire traditionally, what could I build over my life that would still give me some semblance of peace that I still took care of the problem?

I realized, the better goal for age 65 or sooner is: To do low strain work that I’m passionate about that can replace my essentials income/take care of the bills. (at the very least, obviously if I make more I’ll take it)

Why does your doctor in his 70’s and even 80’s still show up to his clinic or to the university assisting in research?

Partly: because its a low strain position, his mental faculties stay sharp and he’s doing his passion, social interaction, still makes a high income, and gets out of the house/on the move. It’s honestly a decent way to live into your late 70’s and then perhaps a permanent retirement is in order for the remaining decade/two decades if he makes it to 100. Larry King recently passed away and he kept going into his 80’s.

How could Larry King do it? Passion for the work + very low strain work (interviewing people)

What’s even more ironic is that you don’t have to look very far to find instances of those who retired very early or right on schedule being bored outta their minds – when you perform so hard for so long, it starts to get ingrained into the fabric of your being. Also leading to a heavy withdrawal phase from the drug that was your job.

Perhaps you always wanted to be an artist or learn languages and volunteer abroad or perhaps start acting in your 50’s. Maybe even medical school to chase the dream of being a doctor. Whatever your “thing” is, it’s probably best to live a life that amplifies your ability to do it.

It’s no longer about saving money to sit and mope about the lack of things you can do. It’s about saving that money to get out there in a totally different direction that fills you with energy yet again. Keeps you young. I think anyway, THAT is the tactical alternative retirement I can 100% hit no matter what (barring illness of course) because all it requires is time and effort.

Both of which you have at any age.

And why wait?

If you are in your 20’s/30’s – have a dream passion of sorts, who’s to say to you can’t go for a free seminar / network with others who like to do that same thing and get started right away at even an 1H/ week or better yet, 1H /day. Here you are plugging away at your 50K/60K year gig…. after the numbers I ran, you might be realizing that having some alternatives/contingency to traditional retirement might not be a bad idea…and what better solution then the one where if you can’t invest excess financial resources – invest some time so your future self can live with a bit more peace of mind.

Can you become a master by corporate retirement? Would people pay you for your work? How satisfying would that be?

Many folks already save so they can open a business in their old age, this is another path but why not look into the business you want to open – today? What it takes to get there? Common hurdles to tackle?

It sounds silly, but one way or another you will likely reach old age – its still mostly up to you what that old age looks like. I don’t care how broke you are – if you have the internet then you can make a better retirement for yourself.

In Summary: Put Skills & Mastery into what you really want to do if you could do anything you wanted and by the time retirement hits you at least have one thing to fall back on for the next 20 years give or take. Better yet, don’t wait till retirement and start when you feel confident enough and just see what happens! I’m personally trying to have to have at least a decades worth of money set aside (on simple living budgets , not a consumerist 80K/year retirement one) as a working target so I’m not 100% reliant on these passion skills if the economy goes down. Try to pay off your house ASAP if you can. If you are poor or from a lower income bracket, there are no promises anywhere that you’ll make 150K/year – but that doesn’t mean you are sitting on your fingers just waiting to accept your miserable fate. Hustle down every avenue- go hard! Or Hustle – to live simple!

Life is bigger than the corporate race. Be better than that. Whenever possible.

Thank you for reading.

Image credit, too lazy to edit: Vishnu Kale , Francisco Arnela , Jerry Wang ,CDC

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