My 72-year-old dad just announced that he’s learning to drive a stick-shift. Why? Because he wants to drive – instead of relying on taxis or buses – when he travels to countries that only have manual transmissions.
And he goes to a lot of other countries. Last year he and my 72-year-old mom flew to Russia. “Why Russia?,” I asked my parents. “Because we’ve never seen it,” they replied.
When they returned, they bought a ticket to Brazil. This year, they invited me to join them in Iceland.
My parents, in short, have the coolest retirement ever. And what’s crazy is that they didn’t start saving for retirement until their 40s. That flies in the face of conventional wisdom, which says that if you don’t start saving for retirement by age 25, you’re totally screwed.
Path to the Coolest Retirement Ever
My parents arrived penniless in the United States when they were in their mid-30s. They came from Nepal, a country where plenty of people make less than $1 a day, and a “good salary” is the equivalent of $200 – $500 U.S. dollars per month. That money stretches a lot further in Nepal, to be fair, but it certainly didn’t help them out when they landed on the “shores” (the tarmac) of Pennsylvania.
My dad got his first “real” job at age 40, earning $20,000 per year, living in Ohio. His car broke down as he drove to his first day on the job. My mom worked in the Sears credit department for two years, then stayed at home to raise me.
Neither of them knew much about stocks or investing. They stuck with mutual funds. They tried managing a 4-unit apartment building, but sold it when they realized they didn’t want to call plumbers and install doors. They didn’t flip houses during the bubble or cash out in some tech-startup IPO.
Yet by the time they both turned 60, only 20 years after they began working, they were ready to retire. They probably could have done it sooner if they weren’t raising little ol’ me.
And they don’t have some meager eating-TV-dinners type of retirement. They have a lets-fly-to-Bali type of retirement.
“Have you tried the eye tracking on the new Samsung Galaxy S4?,” my dad asked me the last time I went to his house.
“What’s eye tracking?” I replied.
He shook his head woefully. “You’re so behind the times.” Then he showed me his new MacBook Air.
They have zero personal debt. They paid off their mortgage within 7 or 8 years. They’ve never taken out a car loan and they’ve never carried a credit card balance.
When I called them a few months ago to see if they wanted to meet for dinner, they replied, “Sorry, we have concert tickets for tonight.”
Concert tickets? Granted, it was for a classical Indian musician, which makes it a little more normal. I guess. At least they’re not partying with Pink Floyd.
“How about tomorrow?” I asked.
“We’re having dinner with the neighbors.”
“Day after tomorrow?”
I finally managed to get them to pencil me in for a Tuesday night. My parents have a social life that could put any twentysomething to shame.
They visited Bali a few months ago. They traveled alone to Myanmar (Burma) after I raved about how much I loved it. They visited me in Spain, Cambodia, Vietnam and New Zealand during my two-year backpacking stint.
There are two points I want to make with this story. The first is a message of hope to all of you who didn’t start saving for retirement in your early twenties. Most financial advice says that Armageddon will fall upon you if you get a late start. Don’t panic. You still have time. You’ll still be okay.
Yes, it’s true: The younger you are when you start saving for retirement, the better. And you’ll never be younger than you are today. That’s why you should start now.
But don’t beat yourself up if you didn’t start early. Just begin.
Two Decades of Work, Lifetime of Leisure
My second message is that conventional wisdom, which states that it takes 40+ years to adequately save for retirement, might be overblown. My parents retired after only 20 years while operating a one-income household (working dad, stay-at-home mom).
As you might guess, they weren’t buying tech gadgets and flying to Iceland during those years. Their 40s were much more frugal. We shopped at TJ Maxx, avoided restaurants, and drove a 15-year-old car.
“Why would I want to live like that, just so I can have a bunch of money when I’m 70?”
First, because 70 is the new 50. (Yeah, I said it.) When you’re 70, you’re still pretty darn young. You’re young enough to download video game apps onto your new iPad, stay out late at concerts and drive a stick-shift. You’re probably not chugging beer out of a funnel anymore, but otherwise you’re still raging strong.
Second, because peace-of-mind is worth a lot. You don’t want to be a 70-year-old stress case.
Finally, because we never felt deprived. We went to sleep every night with full bellies and a warm house. I went to a good school. What else did we need?
Yes, you should still enjoy today. Don’t get so obsessed with retirement that you forget the present moment. Travel when you’re young AND when you’re old. The world will change a lot in the next few decades. You’ll get to watch it happen.
But don’t forget that packing your lunch to work, brewing your own coffee, driving an old car – that’s not really a sacrifice, is it? Not compared to what you’ll gain.