Posted by Mike Smith :: November 3, 2008 @ 9:53 am

As the normal age for retirement continues to creep higher and higher, more people are planning to retire before that magic number. What retirement means and how to achieve it differs from person to person, but we could all benefit from taking the time to consider the possibility.

As we’ve mentioned previously here on the Lending Club blog, the classic definition of retirement is the point where a person stops employment completely. This definition is being questioned as the typical sources of retirement income – Social Security and pension funds – are slowly disappearing. The idea that a worker would have the same employer for his or her entire career is also becoming less likely.

The early retirement movement tries to redefine retirement not as the point when you stop working but the point where your living expenses are financed by non-work means. In other words, you don’t need a job to pay the bills. Such a situation makes work voluntary and opens up a whole new world of possibilities. In such cases, you are free to pursue whatever interests are the most satisfying, regardless of the income they generate. This can range from leisure activities, unpaid work, low-paying work, or even high-paying work with a higher risk of job loss. The focus shifts towards doing what you love without much regard for the financial benefits.

How can you make early retirement a possibility? Make an early retirement plan as soon as possible. The basic method to take an early retirement is saving and investing heavily when you’re working to cover expenses when you are not. The general rule of thumb is that withdrawing 4% from investment accounts should allow them to last indefinitely. That means you’d want to build a nest egg of twenty-five times your expected retirement expenses. Such a large goal illustrates why starting as soon as possible is key.

FIRE Finance has compiled a thorough list of retire early resources. My favorites from the list are the Early Retirement Forums and the Retire Early Homepage.

While early retirement isn’t possible or desired in every case, looking into it may be worth your time. Let us know if you’ve committed to an early r