The Early Retirement Fantasy: Why the Reality's Not Worth It

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Retire by 30! Become financially independent in five years! From magazines to books to websites, tips for ways you can begin your retirement early are available in abundance. It's certainly an appealing idea. After all, who wouldn't like the idea of no longer having to spend the majority of their days working for The Man, sitting in a cubicle, eating tuna fish sandwiches for lunch. (Actually, I'd probably still eat tuna sandwiches even if I were retired.)

All of these authors and supposed gurus claim their advice will make it possible for anyone to retire early, even if they aren't currently bringing in a huge income. And the common answer for us middle-classers who aren't bringing in massive paydays is budgeting -- extreme budgeting. For example, some will suggests that all you have to do is find a way to live on 25 percent of your income and save the other 75 percent.

In theory, such an extreme lifestyle choice may seem doable, even desirable, if the result is retirement at age 35. But if you're considering trying to take that path to early retirement, here are a few reasons you might want to reconsider.

It's Not Sustainable

One of the pitfalls of extreme budgeting is burnout. When my husband and I were paying off our student loans, our budget was tight. And we found ourselves hating that budget because it had no wiggle room. That said, even then, we were by no means practicing extreme budgeting. We found it essential to factor in $20 a week apiece in personal spending money, a short and inexpensive yearly vacation, new old clothing when needed (hello, thrift shops!), and eating out (which usually meant takeout) once a month. Those small splurges kept us on track to continue saving. With extreme budgeting, there is no room for anything but the bare necessities, which is a plan that's generally set up to fail.

You're Not Living in the Present

Because the demands of extreme budgeting mean you'll be living on so little, what will you be living for in your day-to-day life? Sure, maybe you'll be able to retire 15 or even 25 years early, but think about those 10 to 15 years of never spending your money on anything. Is it really worth it to not go on a real vacation for 15 years? Is it worth it to not buy gifts for your spouse's birthday or Christmas or anniversary, for years and years? And if you have children, is it worth it for them to not be able to experience any extracurricular activities or sporting events because of the costs involved? It's one thing if you really don't have the money to enjoy as many of life's simple pleasures as you might wish, but inflicting that on yourself is like taking your quality of life, crumpling it into a little ball, and throwing it in the nearest garbage can.

Life After Retirement: It Doesn't Get Any Better Than This

OK, so let's say, despite all odds, you're successful in your quest to retire at age 30 -- OK, 40. Congrats! Now what? The retirement nest egg you've built didn't have the extra decades to benefit from compound growth that the accounts of those retiring in their 60s enjoyed. So that tight budget you've been living under the last 10 or 15 years? It will just continue, with the only difference being that you won't be going into the office each day. And most of those who claim to have "retired early" continue to find ways to earn money post-retirement, even if the work isn't full time. Otherwise, their quality of life would plummet, even with the extreme budgeting they have to continue.

Maybe you'd be able to claim that although you're still earning money with your labor in your "retired" state, you don't have to work if you don't want to. Well, yes, but would you be able to support the kind of life you want otherwise?

Add it up: While extreme budgeting in the name of achieving of early retirement may sound appealing, the reality is that the drawbacks far outweigh the benefits.

If you really hate working to the degree that you'd consider extreme budgeting for 15 years worth it, maybe the real answer is to find a different job or career. Better yet, if what you really hate is working for someone else, spend your free time finding a path toward working for yourself. Extreme budgeting and early retirement shouldn't have to be the only option. You can do better.

7 Best Places to Retire Worldwide If You're OK Going Full Expat
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The Early Retirement Fantasy: Why the Reality's Not Worth It

Medellin has a notorious reputation among Americans who know it mostly for its drug-laden past, but that hasn't prevented a huge expat population from springing up within city limits. Medellin is an incredibly walkable city, and its El Poblado district has Japanese, French, seafood and Italian restaurants within a block of each other.

Its health care system ranks near the top this list, while the cost of everything from housing to entertainment are a great fit for a fixed income. The average rental on a one-bedroom apartment in the center of the city is $650, while the average cost of buying a place is $1,050 per square meter. A taxi will get you anywhere in town for $2.50, while buses and trains can be found for much less. Plus, with the average high temperature topping out at 73 degrees, the average low coming in at 54 and a couple of rainy seasons in spring and fall, it's cool and comfortable.

Four seasons, lots of English speakers, all the Western amenities, entertainment and dining options that couples honeymoon here for ... that socialist universal health care that folks back home kept wailing about. Is there anything Pau doesn't have going for it?

Well, just consider the fact that you still have to pay for it all. The average cost of living here comes in at little more than $1,900 a month. That's not terrible by western standards, but it's more than the $1,530 you'd pay in Medellin. A whole lot of that cost comes from the nearly $1,300-a-month average cost of an apartment, which is roughly double what you'd pay in Colombia. Pau is still one of the most affordable places to live in France and is one of only two European locations on our list. That said, on a global scale it isn't exactly cheap.

It's a bit rainy and the average high temperature is in the 90s, but you're on an island in the Pacific living in one of the cheapest cities an expat can ask for.

Located along a sheltered coast on the island of Negros, Dumaguete avoids many of the typhoons, floods, landslides and tsunamis that plague other areas of the Philippines. The cost of living there comes out to roughly $920 a month, making it one of the cheapest places to live on this list. The real estate values help out quite a bit, as even prime downtown apartments can be had for $350 a month, while real estate goes for roughly $1,200 per square meter.

For that, you live in a beachfront, tropical climate with excellent health care, lots of activities and one of the best residency programs in the world. If you're there, have roughly $800 a month in income and are over 50 years old, you can live there with no required residency period and with a bunch of discounts as a result of residency.

The good news is that you can live really well here on $920 a month. The bad news? You're doing it in a city where the average high temperature is 99 degrees year-round and the average humidity sits at 85 percent.

Oh, and the nearby farmers burn their fields at the end of harvest season, making the air in town practically unbreathable.

That said, hillside Chiang Mai offers a lot for the money. An apartment downtown goes for a ridiculously low $400 a month, while homes can be bought for $1,100 per square meter. The high-quality health care and health-related services are huge bonuses, as are Western amenities and jobs for foreign residents. Many Westerners are employed in Chiang Mai in language schools, universities, medical facilities and tourist-related industries.

The country's Malaysia My Second Home retirement benefits program for all foreigners is a great draw, but so is the quality Internet access, cellphone coverage and roads.

If you can prove $3,125 in monthly income and make an investment in a local CD, you're going to be living on the cheap for the foreseeable future. The average monthly cost of living comes out to $1,070, with apartments renting for just $500 and homes selling for $1,700 a square meter.

George Town's population of 740,000 isn't exactly tiny, but it's small enough so that it's easy to make friends and meet people in a city where English is spoken just about everywhere. The health care is outstanding, the infrastructure is just about Western and the population of expats is around 40,000 -- a city unto itself.

Ecuador is Florida or Arizona for the expat community.

The country's retirement benefits package includes 50% off transportation, utility bills, international round-trip flights originating in Ecuador and tickets for cultural and sporting events. Foreigners can also enroll in the Ecuador Social Security medical program for $57 a month. Those over 65 also pay lower income tax. Oh, and there's no required minimum stay for residency.

At $1,010 in average monthly costs, Cuenca is also insanely cheap. Apartments downtown rent for $300 a month, with homes selling for $1,100 a square foot. Your neighbor is also likely to have a few stories to swap, as there are roughly 4,000 to 5,000 North American expats living in this small city. There are lots of restaurants and nightlife and just enough English spoken to ease the transition.

This Old World region on the Atlantic Ocean, home to more than 100,000 resident expat retirees, medieval towns, fishing villages, open-air markets, local wine and some of Europe's best sandy beaches. Dotted with cobblestoned streets and whitewashed houses with lace-patterned chimneys, surrounded everywhere by fig, olive, almond, and carob trees, it's a European dream location.

It has four seasons, including one of Europe's most sought-after summers, nearly no crime, strong infrastructure and universal, international-standard health care. That said, it isn't exactly overrun with English speakers, so you may want to brush up on some Portuguese before hunting for homes here. Still, with 42 golf courses in less than 100 miles and a cost of living that averages out to between $1,500 and $2,000 a month -- including rent at around $615 a month -- there's a whole lot of motivation to learn the language and stick around a while.

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