The usual definition for extreme includes words like serious, hazardous, dangerous, highest degree, exceptional, severe, physical or mental risk or hardship. I realize that retirement as a goal may be worthwhile enough to take risks, but extreme may be too far. Fool’s gold is anything that turns out to be worthless! Have you gone to extremes for retirement savings? Is it working for you?
In practical terms, extreme retirement is giving up everything now for a retirement. I am not referring to just giving up dining out or taking big risks in the stock market. Extreme retirement is savings rates in excess of 60-70%. It means giving up a great deal for your goal. Taking it to the extreme reminds me of those liquid diets. You know, you drink a shake for two (2) meals a day and have a lite meal for dinner. You will definitely lose weight, but at what cost?
Maybe you have tried to lose weight for years and nothing worked! You figure, you can do one of these extreme diets and lose the weight. If you are desperate, you can endure anything for a short period of time. It sounds like a good way to jump start a diet! Unfortunately, there are people who think you can endure this until you lose fifty (50) pounds. What usually happens is you start and have some success, but stop because it is too rigid or restrictive.
You go into it with the best of intentions and you fail. This is one of the reasons there are so many diets. There are quite a number of fad diets too! They are extreme such as the shake for two meals day or juice for five days or fast for twenty four hours. Stay away from anything extreme, it is unhealthy and generally does not work. You have to find the one that works for you! Unless you change your habits, you will fail. Unfortunately, you will gain back the weight after you go off of it.
Extreme savings rates or giving up everything for retirement savings is too rigid and restrictive. Similar to the fad diets! Life is more than just saving for retirement! You are supposed to enjoy life. Do you work to live or live to work? When you achieve your goal, you will feel deprived just like a person on a diet and gain the weight back. If you give up everything, will you feel deprived? It reminds me of those “no spend” months! I can easily hold off spending for a month, but it means I will spend it next month.
In the same way, extreme retirement savings is so restrictive you will want to break it. Extreme savings rates of 60-70% means you cannot do much. How long could you maintain this savings rate? What would your living space be like? I suppose multiple roommates, second hand furniture or living at home. What would you eat? Rice and beans? Isn’t eating a pleasurable experience? I am willing to give up a lot, but not everything.
Could you afford a car? Would you just go to work and come home? I am in favor of free entertainment, but that has its limits too. How would you date or have a family? It is pretty extreme to maintain this lifestyle for an extended period. I can see doing this for a short period to save for a down payment for a house or pay off debt. I think your tolerance for this sacrifice has its limits, probably a few years.
Ten (10) or twenty (20) years of extreme sacrifice helped you achieve retirement! Now what? You had the discipline or determination to to give up a great deal to reach retirement. I think it is wonderful that you sacrificed so much , but when do you enjoy your life? Will your retirement be extreme too? You will live in a small apartment and live on practically nothing. You are used to the lifestyle so it is no longer a sacrifice, but was it worth it?
Once in retirement, you still give up everything to live a simple life. I can see how this may sound attractive if you hate your job or career. In fact I can see why some people will sacrifice a great deal for early retirement. I know I sacrificed some things to achieve financial freedom at an early (38 years old ) age. I sacrificed the things that I felt were unimportant. I did not give up vacations or my children’s private school. My wife and I lived in a very nice house some would say was grandiose!
You cannot maintain an extreme anything for long periods of time. Life is supposed to be enjoyed and experienced. It is much easier to do something like this by yourself, so relationships are hard to maintain. Most of life’s pleasures are enjoying things and experiences with other people. I have often heard people who sacrificed ask when does the fun stuff occur? I think you need a balance in life. Certain things are worthwhile to sacrifice for your goals, but not everything. What do you think?
I know you can live in a four hundred (400) square foot apartment, spend very little on food and save 60-70% of your earnings. My question is for how long? Can you marry and have a family? If you did give up everything to reach this goal, what is the pay off? Is it a frugal (extreme) retirement? I suppose I could still travel, but it would be extreme too such as $5 per day and I camp out.
I am not saying that you should not give everything a 110% effort, but think about how long you can do that? What is the outcome you are trying to achieve? Is the effort worth it? What kind of life do you want to have? My most enjoyable experiences were with friends and family. The cost was modest or free, but to save 60-70% of my income would mean saying “no” to many of those experiences! I certainly could not afford to send my children to private school or live in a nice home. I These are things that are important to me and I am not willing to compromise my what I find is important. I saved and invested, but not extreme savings!
Photo by: Tax Credits
I saved and invested, but not extreme savings!