Difference Between Financial Independence and Retirement
Financial independence and retirement are used interchangeably, but there are some subtle differences. Financial independence is usually applied to people across their entire lifespan. Those who cashed out $5 million worth of Facebook stock at the age of 30 are financially independent just like those who saved $5 million in their retirement funds by the age of 65.
Retirement, on the other hand, is a term often used to describe someone in the last quarter of their lives e.g. ages 65 and up. Sometimes people are involuntarily forced into retirement due to employment circumstances. This is why some folks get so hot and bothered if you aren’t in the upper ages but say you are retired. They don’t think you deserve retirement because you’re not old enough! The reality is all of us would rather be financially independent earlier, so we have more time to enjoy our wealth. The older we get the more we are willing to trade money for time since we have less of it.
There are studies that show death comes quicker after retirement due to alack of purpose. With the internet and so much good we can do once we have our free time back, I can’t see how anybody would ever feel permanently lost in retirement. Try volunteering at a charity or mentoring a child if you start feeling aimless. Everybody could use a helping hand.
Retiring early is a blessing because our bodies still allow us to climb the steepest Mayan steps and start the most daunting businesses when we are younger. Hopefully this post gives you some inspiration to get up a little earlier, save more after-tax income, and take calculated risks to retire early as well. The feeling of being able to do whatever you want is priceless. Just know that once you’re retired you may very well want to go back to work.