6 Crucial Life Choices for Early Retirement

by Guest Contributor · 34 comments

retire early
At the end of this semester, I will be taking early retirement from my job as a college professor. I will have just turned 54 years old. How am I able to quit my job at such a young age?

I actually started a retirement plan over 30 years ago. Despite some setbacks and detours, I was able to stick to that retirement plan. I am looking forward to reaping the rewards of my financial decisions soon.

I have listed here the most significant financial decisions I made throughout my adult life that most impacted my ability to take an early retirement.

early retirement1. Career Choice

Upon graduating college in 1979, I had some good job offers. I did not take the highest paying one, but I chose a career in the public sector with a generous pension plan and lifetime health benefits.

2. Followed a “Pay Myself First” Philosophy

What I mean by this is before I ever spent a penny from any paycheck, part of my pay was automatically deducted. The money went into a tax-deferred supplementary pension plan. I never missed the money and it grew into a substantial amount over the years.

Also, I never felt guilty about spending the rest of my paycheck because I knew I was putting money away before I got my hands on it. In the end, it was the supplemental retirement account that put me “over the top” in terms of being able to take early retirement.

3. My Kids College Education

I sent my daughter to a good state university. My son was fortunate enough to attend a federal military academy. What that meant to me financially was that I did not put a lot of money away for college expenses nor did I take out college loans. Take it from me, a college professor; most states have relatively inexpensive colleges that will provide your child with an excellent education.

4. Pre-Nuptial Agreements

I weathered 2 divorces and came out financially intact because of well thought-out pre-nuptial agreements. The pre-nups helped to avoid costly attorney fees and protected my (and my ex-spouse’s) personal assets.

5. Avoiding Debt

Other than mortgages, I tried to avoid racking up any consumer debt. I wasn’t always as successful as I wish I had been. However, I think if I did avoid the credit card debt I accumulated, I would have retired 4 years ago. Now, I have no debt other than a small mortgage on my home.

6. Establishing a New Career

Let’s face it, at age 54 I’m not going to sit in a rocking chair all day. I still want to work even though I don’t have to. I have given myself a great opportunity to explore new options. I have leveraged my academic credentials, my love for travel, and my experience in writing to start a new business. I have written a best-selling book, “The Traveling Professor’s Guide to Paris”, I take small groups on tours to Europe, I will be writing another travel guide, and I run my website, www.travelingprofessor.com.

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{ read the comments below or add one }

  • anne says:

    I’ll be able to retire at 56 based on my pension calculator. That will be 6 years from now. After working for the state government most of my life, I don’t know what I’ll do when I retire but I doubt it’ll be something close to what I’m doing now (HR).

  • Danielle Ogilve says:

    There seems to be a lot of planning involved early on in life. Maybe you could give advice to the early to late 20 somethings to help them take steps towards this?

  • Mark Adams says:

    Most people would be happy just retiring on time. There is a little known IRA called a self directed IRA. It lets you have “checkbook” control to invest in real estate, gold, tax liens, private loans, etc. Although it costs some to set up, it allows for higher tax free returns and opens opportunity to really get a jump on your retirement.

  • EVN says:

    Early retirement (and really a comfortable retirment at all) is largely a function of planning AND having the wherewithal to make it happen. Not everyone is that fortunate, and too many of those who could have made it happen made serious mistakes along the way. The professor is fortunate to have a state pension. But he also saved, and he didn’t “live for the moment” and spend all (or more) than he had. That takes discipline, planning, and enough income to meet more than your daily needs. And yes he appears to have had a good paying job, but many people with decent jobs are over they heads in debt, failed to plan, and are looking at very questionable retirements, as far as being secure goes.

    At 58 and 52 we decided that we are done working (and, as one poster noted, paying a boatload in employment related taxes that disappear as an expense once you get off the merry-go-round). You really do need less once employment costs are gone, and it is important that you keep debt down throughout your life. After all, there is no such thing as a free ride, and whatever you borrow you end up paying back and then some (just take a look at a total payment schedule on a mortgage and it should make you think hard about taking it – in 30 years you’ll pay back three to four times the amount of the initial debt, and credit card interest is much worse).

    The only debt either of us took on student loan debt, mortgage debt (only 2 houses in 29 years of marriage), and car loans. The dumbest financial mistake we have ever made was to extend money (basically on our credit cards) to help out a “friend” who it turns out was really a thief (i.e. he was in trouble because he misappropriated other people’s money). We learned from that mistake early in our married lives, avoided credit card debt (but not credit card use and paying in full – that easily has earned us tens of thousands over the years in cash rewards), and paid for what we could afford, and if we could not afford it, did without.

    When we did do well we didn’t squander it on extravagant things, did not need the latest car, or really even luxury cars, went on vacations but only what could be afforded and nothing over the top. We did enjoy life (it is not as if we penny pinched and did without some extras), and we raised three children, two of whom finished college with no debt, the last one is half way through. Those that did graduate are working on advanced degrees in a realistic career plan pursuing degrees that get jobs.

    And, we largely manage our own money. Yes we have an advisor, but it is still something we are actively involved in, and in retirement we’ll be handling it all pretty much ourselves, in part because it further saves on costs, but also because we have educated ourselves enough to be able to do a competent job handling our own finances.

  • bob says:

    I like the adulation this individual seems to have gotten from all the bloggers, but let’s do some realty checking – his final year professors salary at a NY Community College was $120,000. This is not an exceptional retirement story given his rather solid salary, government pension fund and will bet as a government retiree he gets a subsidized medical plan that beats most other people going out into the retirement world.
    So the moral of the story is 1) get an education 2) an education that will give you a job paying 50% more than the US avg pay scale, 3) find early retirement medical support, and you they take another job, even if it is a ‘hobby’, it’s still beholdin to other people.

    • Chuck says:

      Yes, he chose wisely in 1979 and is reaping the benefits today. He worked his way up to a good salary, but his starting salary, as he states, was lower than other offers.

  • shawn says:

    I retired at 48 – after a blissfully short 14 year carer. The real key to retiring early is to realize how little you need to retire on.

    While I was working as a research scientist I realized that I spent my paycheck as follows:
    Fed tax: 20%
    SS: 7.5%
    state tax: 5%
    retirement 15%
    savings: 10%
    Housing 20%

    This amounted to a full 3/4 of my paycheck. What that meant is that to retire in a manner in which I was accustomed I had only to replace 25% of my after tax (and housing) salary. Moving to a low tax state and paying off my home allowed me to live on a salary that was literally 30% of my pre-retirement salary as the average tax rate on that income is less than 5%.

    13 years ago one could easily generate 30% of their income, inflation protected, from a savings account that was 7.5 times your annual salary. And saving 7.5 times one’s annual salary isn’t too difficult when saving 25% of income per year.

  • hitokirihoshi says:

    wow, your story is very motivating for me.

    I wish also to retire from work as early as possible and i think i ‘m already following some of your tips.

    well, determination really works!

  • Lauren says:

    Congratulations, Dr. Solomon, and happy retirement! The “pay myself first” axiom is one of the rules for smart personal finance that I see most often repeated, and I think is one of the most effective. It’s easy, it’s catchy, people remember it, and the ROI is incredible.

    Congrats again!

  • Steve says:

    What a blessing to retire and pursue another field at the young age of 54. One of the joys I get from my company is we have helped a lot of people retire early just because they did their own investing with their retirement. It’s amazing how may figured out a way to grow their money without any professional “help”. You are so right in especially two areas: 1) watch the debt, and 2) pre-nup’s. I’ll look for your book, Thanks –

  • Chris says:

    Well, we have entered a another turning point in global economics, similar or worse to the great depression of the 30’s. I would not trust for banks or insurance companies to survive another 5 years, not to mention 30 years.
    The way central banks print money to buy MBS (Federal Reserve) or sovereign bonds (ECB), it will keep bankrupt entities alive a little longer until it finally blows, at the expense of current and future inflation further down the road. Central banks are punishing retirees, taxpayers and the prudent, i.e. savers, and are rewarding Wall St. and crony capitalists. The system is rigged. Forget any paper assets like cash, stock, insurances, CD’s or any other promise of financial institutions, for third parties will refuse to pay you once the SHTF.
    Take responsibility of your own finance. Only hard assets will protect you from inflation. Keep gold/silver instead of do not entrust your money to others. Inflation and taxation are the grindstones of the working class. If you find those words a bit drastic, well I did so too 5 years ago, but educate yourself financially. A good starting point would be the blogosphere, e.g. at marketoracle dot co dot uk. Good luck.

  • onemig says:

    I have started paying state run social security system fund 10 years ago but that was too small. When I got a new job, like 2 years ago I started a retirement plan with Generali Asucuracioni s.p.a 100 USD /month and Pru Life uk Philippines about 250 usd a month(with very attractive yields). Its like insurance /retirement plan/ which is payable for 7 years and redeem at the age of 60 . Im now turning 30 and single but breadwinner. I also started my own house which is mortgage through bank now (payable in 10 years) I think this is still not enough specially when I’l start my own family at the age 32. Am I in the right path?

  • tkbsr says:

    Many of you crying foul about the professor’s early retirement are stung by envy because you failed to follow his path, which all of us have the same choice to make. Concerning those who say to thank the tax payers, most states put in no more retirement dollars than a private sector employer does toward a 401K/Social Security tax, yet many of you continue to follow the same old tired myths that a State pays all of the retirement costs, wrong! The breakdown in my State is CA pays 12 cents on the dollar, I pay 11 and the rest is stock gains. So, 77% of my retirement is from stock gains and not the tax payers. Hardly a reason for me to be thanking the tax payers when I worked and fulfilled the obligations to earn the retirement. No one gave it to me or any other state employee. Some of you act as if public workers are welfare recipients. Yes my retirement is guaranteed, regardless of what the markets does, but CALPERS has an average gain of over 10% for the prior 20 years before the 2008 collapse. I sure remember when the private sector was fat and sassy in bonuses and pay perks; however, I chose to stay with my job that had a great pension and early retirement. Like the professor, I too retired early at age 50 with 25 years of Law Enforcement. I earned every penny including prefunding 5 additional years of service with a 100,000 dollars out of my pocket many years before I retired. All of my goals paid off and I am set for life, unless a systemic collapse occurs in the US. At this point we are all in serious trouble. The haters need not respond and should look at themselves for the poor decisions they made for their family and future. Too the planners, and those who delayed gratification by saving to retire early and in peace, you have done well. My only parting words of wisdom are, what does it profit a man if he gains the whole world yet lose his soul. Faith in Christ as your savior is the ultimate decision that anyone can make to secure his/her true future in heaven. This is the most important choice that any of you can make and secure your ultimate future. God speed to those who make this their decision.

    • Carl says:

      Well said and well done!

      “Many of you crying foul about the professor’s early retirement are stung by envy because you failed to follow his path, which all of us have the same choice to make. ”


    • Nate Carreon says:

      I could not have said it better.

  • BC says:

    One of the keys to retirement is WHEN you stop working. If possible, have this time coincide with the stock market being at a high. For example, if you were fully invested in 401Ks, IRAs, etc and retired in 2006 or 2007, you would have been in much better shape than if you retired in 2008 or 2009 when the market came tumbling down. In that case, waiting until 2010 or 2011 would have been very helpful. In my case, I was forced into retirement in 2008, and my $1M retirement account balance was reduced by 40% or more. Had I been able to stay working another couple of years (or been smart enough to retire in 2007, I would be much better off today…

  • Nate Carreon says:

    Came to the US from the islands with new wife at age 33 and recently retired at age 54 from the LA County. Paid off house early, saved like crazy for retirement and college for kids and lived frugally like we were still in the islands. Can be done if you have the will, foresight and discipline to do it.

  • William says:

    Consider me a teacher basher. I really object to those who hide out in academia for their careers, and then are rewarded with a plush pension and benefits for the rest of their lives. We make life way too comfy for those in the public sector, and it ends up costing us all. I really hope some hard reforms are made at all levels of government so the next generation is not left footing the bill for the likes of Mr. Solosky.

    • greg says:

      Don’t worry, the money has already been squandered!
      All those plush pension benefits you mention are unfunded liabilities, promises impossible to keep. The US is broke and in debt up to its neck. Wall St. and the Fed have it all worked out, paying big fat bonuses and fees to one another. Pension liabilities are just records in the books.

    • Carl says:

      So how long have you been teacher bashing? Mr Solosky made an agreement over 30 years ago and lived up to that agreement. He deserves his pension as agreed.

      For decades I saw people turn their nose up at public employment and its poor working conditions and low salary. Now that many of us are at retirement age, those same people are saying public employees have had it too good for too long. Sorry, but you can’t change the rules at the end of the game.

      To Mr. Solosky I say, congratulations and enjoy your well-earned retirement.

  • jon says:

    Nice article. Like you I was able to retire early at 60 thanks to a pension from my govt. job ( like you I chose to forego a higher salary in the private sector for the public sector) and saved enough to establish my own supplementary pension plan from an investment portfolio generating dividend and interest income) I volunteer and work part time periodically. Early retirement is within reach if youre willing to save and follow prudent financial habits like keeping debt to a minimum and not spending on unnecessary consumer trinkets.

  • TA says:

    Agree, one can retire faster if you plan well & stick to them. I retired when I was 30/32 (of course I was & still am single – trust me it is not easy even when you are single, i can quote a no of my friends who have not). I took a different approach, was aggressive in my job, rose up vert fast, made good amount of money, then when I was 32 & had enough money, I threw caution to wind, moved to Sales Mgmt, worked for 5 yrs & made much much more due to the fat commissions !!. Now I have moved to a boring desk job, in a Global Mgmt role, no stress & still making very good money. All my savings are in very conservative investments (no stocks), still I get interest much more than my salary (trust me I earn at market rates or above for my experience, & position). I am now 40 & still live fairly frugal – you cannot change overnight :)- Now my focus is to start my company with VC funding (dont ever put your own money if you ever start) !! So you can retire much much faster – but you have to be willing to take significant risks in your life – & that increases manifolds specially if you are married with kids !!.

    • tony says:

      Good advice. Get an education, stay single, work hard and live frugally always works. I look around and see the same problem everywhere.

      My conclusion is that people go broke for two reasons:
      1- divorce
      2- unemployment

      The first one is often totally out of your control. Chances are, your spouse is spoiled, fickle or not focused. You can mitigate the 2nd risk if you avoid the 1st one altogether.

      • Carl says:

        Good advice, but I disagree that divorce is out of your control. A good prenup as Solosky did, or picking the right spouse as many have done, or staying single as I did, all work. Refrain from marrying the spoiled, fickle, unfocused spouse, or the nut job.

  • Casey Bahr says:

    Big deal. I retired comfortably after only a 20 year career (which I started later than usual). The secrets are to save like hell, but also get the hell out of the U.S. where the cost of living, including housing (still) and health care is astronomical and the political situation toxic.

    • Ash Asgarali says:

      If I may ask respectfully, where did u retire to Mr Bahr? I too have considered retiring to another country, but have not yet gotten there.

    • chris says:

      Agree. Though I am from Europe, not the US, I had the same strategy and retired in my early 40’s in Singapore. No capital gains tax here!
      I had good expat jobs in Asia (engineering) during the late 90’s.
      Sometimes, you need to be in the right place at the right time.
      So all I am doing now is working on my financial literacy to limit the effects of central bank meddling with my purchasing power. With all that money printing it makes no sense to work for a salary paid in USD or Euros.

  • Max Stryker says:

    The MAIN Reason this author is able to retire now is do to his career choice of teaching. He ought to be thanking his #1 benefactor…. his state taxpayer. Average retired, US academic secondary & post secondary pensions after only 30 years range from $4,000- $6,000 per month plus full medical coverage incl dental & optical for the rest of their life. Even after they become elegible for Medicare at age 65 these same medical benefits run concurrent. Again – A massive Thank You to his state & US taxpayers is in order.

    • Steve Solosky says:


      You better believe that I thank the New York State taxpayers every day. I don’t get all the benefits that you describe, but my benefits are good.

      What the “teacher bashers” fail to realize however, with my academic credentials, I could have worked on Wall Street like many of my friends with the same credentials (or less) that I have. I would have made tons of more money than I did with my teaching job.

      In a way, the New York State taxpayer got a bargain when they hired me at a substantial discount of what I would have been compensated in the private sector.

  • Donna says:

    Congratulations on your retirement. I retired in 2001 at age 50 and used many of your same techniques. After my husband died I lost will to work anymore at the job I had worked for almost 30 years. Although I am retired, I work part time for something to do which is closer to home and something I enjoy. One caution, after the 2007 stock market high, I lost about 1/3 of my savings. I am still fine financially but I could not stand another loss like that again. Unfortunately, once you retire security is tough so I recommend keeping yourself busy and finding other ways to continue to make money while doing more of what you enjoy like you are with traveling is the key to a happier retirement. Always keep your options open and be flexible. I have several back up plans.

  • M.B. says:

    Congratulations on your retirement.

    My husband took an unplanned early retirement at 56 in 1996. It was a scary time because we had two teenagers (we were more “mature” parents) preparing for college. Fortunately, we always lived frugally and put money into investments and retirement savings. Our children worked while attending good state universities. We have traveled throughout the U.S. (including Alaska and Hawaii), Canada, Mexico, and Europe since retirement. Part of the time was spent living and traveling in an RV (recreational vehicle). This was an inexpensive and educational way to travel while our children were in college. Since we love the outdoors, we now combine “roughing it” in a tent with staying in nice hotels, condos, etc.

    My retirement hobby is learning about languages and cultures, and I’m active in a few online language communities. Spanish, German, and Norwegian are the ones I try to work on regularly by having foreign email friends. I’m currently also studying French because we want to spend a few months in Quebec next summer. I will probably never be fluent in another language, but I am having fun and keeping my brain active.

    My husband’s hobby is wood carving so we enjoy going to art and sculpture exhibitions. Even though we now have a little more disposable income, we still live and travel frugally.

  • Briana @ GBR says:

    What an inspirational story. I would love to retire at 54 (or earlier), which is why I’m going to start aggressively contributing towards retirement now. Also, picking the right career (as he mentioned above) is going to be essential in that. Hmm maybe I should become a professor.

  • Andrea says:

    Wow, I hope I can retire at 54 or younger. I have a retirement plan which I started to take seriously a few years ago. There is no way I can retire now, but if I continue to invest in my retirement and generate an extra income to add to my retirement I think I might be able to retire within a few years of the age of 54.

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