Is 30 A New Retirement Age?

Well it sure seems that way. I keep reading posts after posts of people who want to retire in their 30s. Is this even possible?

It depends on what early retirement means to you. For example, if early retirement simply means reaching financial independence and living a free and frugal life while doing something meaningful then that is definitely achievable. However, if early retirement implies sitting at the beach all day and spending money like there is no tomorrow then you may need to win one of those hundred plus million dollar lotteries.

Early retirement or let's just call it financial independence is a more reachable goal than most people realize. However, it does require some discipline and short-term sacrifices while focusing on long-term goals. This means you may have to postpone buying that luxury car or a vacation to Europe and may have to live a frugal life for many years, but at the end it would be all worth it.

I recently read a story about a 24-year old who lives off a van to save money on rent while working as a software engineer making $90K a year at Google. Living in a van does seem extreme at first, but after reading his reasoning behind it, it does make sense to why he chose to live in a van. You can read more about him from the link at the bottom of this article.

This Google engineer is not alone in taking such extreme measures to save more money and reduce expenses, it seems there is a flood of young people who are getting tired of living in fear of layoffs and depending on their employers. They want freedom to live free and do what they want and not become a slave to the corporate world.

The point is that people are actually doing this 'early retirement' or 'financial independence' thing and it's very achievable if you have a good plan and willingness to make some short-term sacrifices for the long-term gains.

It also seems there is a recent uptick in more and more engineers wanting to quit their jobs and careers to live a simpler and frugal lifestyle. Even though they are making pretty good money, six figure salaries in most cases, they are not happy in their chosen career paths. Why is that?

I believe this is a result of lack of long-term prospects for the engineers and high burnout rate, especially in the very fast paced computer and high-tech industry where I spent my last 20 years before retiring early.

Yes, I can relate to these young engineers who are longing to retire early or become financially independent. I was fortunate enough to work for 20 years in a career I loved, but then in the last few years I started to become unhappy, mainly due to lack of inspiration, vision, and leadership from the company's senior management. There was one misstep after another, it's almost as if the leadership had no clue what they were doing. And this is not the worst part, the worst part is when they make the lower level employees the escape goat by laying them off. BTW, this behavior is not just limited to tech industry, we just saw a recent example of this at one of the largest banks in the US.

In the tech industry, the young engineers or should I call them millennials are paying attention as they see what is happening in the industry. They have seen the plight of older engineers and how companies are treating their long-term and loyal workforce. These young engineers understand that there is no corporate loyalty or job security anymore and gone are the days when they could work for one company their entire work life and retire with a nice pension and benefits.

Companies are becoming more and more stingy in sharing profits and stocks with their general employees while handsomely rewarding senior and executive management who are to blame in many cases for making bad business decisions.

For the regular employees, the good old days of job security and handsome benefits are long gone. The only way now to do well is to become financially independent and control your own destiny in terms of where you work or what you do.

As for the high-tech companies, they need to understand that they can't just hire anyone to do the advance technical jobs. High-tech companies need smart and creative minded people who would push harder every day to find new solutions and technologies for ever increasing complex problems. They need people who would put their hearts and souls into their jobs to make the company successful. This only happens when employees love their jobs and love and trust the companies they work for.

It takes years and even decades to build experienced and highly capable engineering teams, but it only takes a single day to destroy it all with a knee jerk layoff. I have seen it happen. It sucks for the effected employees, but more so for the company and its investors as there are long-term effects on remaining employees' morale and productivity.

As an investor, one of the things I look for is how current and past employees feel about the company and its management. In the recent years, it has become an important metric for making an investment decision. This is mainly because of the spike in mistrust between employees and their management due to recent streams of layoffs across the industry and the negative effects it may have on company's profitability down the road.

For an individual investor, there are several ways to gauge employee's morale in a given company as this information is readily available through employee interviews and articles published by local news outlets as well as employee public forums. Of course, there are always disgruntled employees who like to complain, but one can easily tell the difference by reading at the comments made by a disgruntled employee vs. a hard-working loyal employee who is disheartened by the current situation and the direction a company is going.

If there is too much disarray among long-term employees, mistrust, and disrespect for the company and its management then most likely the company is not going to do well in the long-term and an investor is better passing off it as an investment till their is a change in management or leadership.

Due to the fierce competition in the high-tech world, the only way companies can stay in business and do well is by hiring the best and then retaining the best. To hire the best and the brightest, they not only need to have a best in class compensation package, but also an excellent reputation for attracting and retaining such talent.

In today's age of free flow of information, unfair and poorly executed layoffs can cause a dent in company's reputation and ability to hire and retain the best. For a company, the aftermath of a layoff is far more damaging than the short-term financial benefit in its earning's report and share price.

Investors understand some cost cutting is important and part of restructuring efforts; however, layoffs without management accountability is a recipe for trouble down the road.

A company that lacks management accountability and employees' trust should have no place in my investment portfolio or anyone who cares about long-term growth of their investment.

As for the young and talented employees or engineers who want to be financially independent, there wouldn't be a better time for starting this FI journey than now as there is more to gain and less to lose.

Here is an article I mentioned earlier about a 24-year old who wants to retire by 30:

24-year old engineer saves 80% of his income and plans to retire by 30


  1. Wow, 80% savings rate. That's a ridiculous savings rate. I would never be able to give up the comforts of a bed to retire earlier. No one who invite over and it doesn't sound safe at times. Hopefully he is able to pull it off.

    That's so true. I haven't heard of people wanting early retirement as much as the recent times. I wonder how business or the overall economy will do if people seek financial independence and retire earlier than 65. Is it time for a paradigm shift?

  2. Yes, 80% savings rate is extreme but doable when one is single and does not have other family responsibilities. There does seem to be a paradigm shift in how the younger generation looks at traditional jobs. Here is another interesting article recently published on CNBC: Rich millennials want to be their own boss


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