The summer before last, I attended a reunion of a group of friends from our high school days. There were 13 of us, plus spouses. We came back “home” from all parts of the country. Most of us had not seen each other for nearly 45 years. We now ranged in age from 62 to 70.
Interestingly, all but one of our group were still working full-time. Only one of us had retired. And, at age 62, this retiree was among the youngest of the group. He had already been retired for 7 years. I admitted to be a bit jealous of his suntan, his trim physique, and his abundance of free time.
He told me that, upon graduation from college, he had accepted a job as an industrial engineer at one of the large aerospace companies and had worked there for 30 years. He accepted an early retirement offer when it was made available to him.
“That’s his secret!” I figured. “Big company largesse!” The last of a generation of lifers—those who worked for one employer their entire career. That, of course, was the norm for our parents’ generation, but certainly wasn’t normal for our group of aging boomers.
I remarked that he must have had a really generous retirement package to be able to retire that young. I knew that he lived quite well, owning a lakefront home on several acres with no mortgage. He went on to explain that, although he did receive a retirement package, it was not really that generous, given that it was an early retirement offer. “Then, how did you manage to retire so affluently, so young?” I asked.
He told me his secret:
From the day he entered college, and started working part-time, he saved 15% of his income without fail. Whether it was an hourly job, or a salaried position, he set aside 15% of every paycheck, month after month, year after year. He invested those savings wisely. And, after 30 years, his accumulated savings will now support himself and his wife throughout a very comfortable retirement for as long as they live—a retirement that began in their mid-50s and will likely last into their 90s.
I am, myself, 66 years-old and still work full-time. I do so largely because I enjoy what I do but also, I must admit, I work because I have not saved sufficiently for retirement. I need to keep earning. I wish I had possessed the wisdom of my friend’s 15% rule and that I had exercised the discipline that he had to follow that rule from the very start of my earning years. I wish there had been Savology back then to point me in the right direction.