Building a Lifestyle that Allows You to Retire

Jeremy Biberdorf |


Retirement is one of the central concerns of personal finance. One day, all of us want to at least cut back on the work we have to do to support ourselves. Sure, there are folks who happily stroll into the workplace every day, well into their 70s, 80s, and 90s. But I don’t want to be that person…and I expect you don’t want to be either.

So how does one retire? “Easy,” you say. “You just invest intensely, maxing out your IRA and 401(k), saving and earning dividends until you have enough money to tap out of the rat race.” Well, that’s one way to do it, and this is the method that you hear the most about if you read about personal finance on the web. But this is only part of the story.

Consumers tend to live lifestyles that are equivalent to their earnings. By this, I mean that if you are a six-figure earner, you are likely to have a house and car that are visibly worthy of a six-figure earner. On top of this, many high earners carry a lot of debt. Debt can serve to take your lifestyle to the next level, over and above what you could achieve on your own. It’s why people go into debt in the first place. But a lifestyle like this is dependent upon a single factor: you as a remarkable wage earner. As you might imagine, it’s hard to stop working if you live this sort of lifestyle…very hard.

Regardless of how much money people make, there’s an overwhelming tendency to push spending to the absolute limit. Investment, using tools like ETFs and index mutual funds, are sold to us like a golden parachute, which will be there to save the day when we really need it, one of these decades. But if you are spending to the max until the day you retire, you’ll have to cut your spending by 50% or more, if you have as much saved for retirement as even the median level of current retirees.

But about a third of Americans have no retirement savings at all, when the time comes. So what is to be done? I’m suggesting that in addition to saving and investment programs (which are good - I personally use them), you’ve got to cut the cost of your lifestyle. Lucky for you, there is a growing community of people who are finding ways to do just that.

Home is Where the Unnecessary Expense is

One of the best ways is to control what you pay for housing. Warren Buffett famously lives in the same house he bought in 1958, for $31,500. Imagine if you were to buy a house worth well less than what you could afford. What if you then paid it off in ten years? Imagine what you could do with the rest of that money you were saving.

Living a lifestyle which will allow for retirement is about cutting costs. It’s about riding your bike more than you drive your car. It’s about learning to cook instead of paying someone else to do it for you. It’s also about developing passive income methods, by founding or buying assets which will earn you money without you having to work for it by the hour.

You don’t need a ton of money to live this way. If you make $80k a year, live the life of someone who makes half that. Use the rest to build for the future. Make a lot less than my $80k example, or have a personal situation that’s expensive? Spend the money you do have in ways which will pay off in the long run. Spend for equity, not for a status symbol collection. Spend to increase your knowledge (and thereby your earning potential), not just your fun on the weekends. Living a lifestyle which will allow you to retire isn’t all about delaying fun, but it is something that people at all income levels can do to secure a happy, secure future. You just have to start the change now.  

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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