R.I.P. Traditional Retirement

By Brandon Hill

Special to the Financial Independence Hub

Does the notion of grinding it out day in and day out for the next 40 years to experience the freedom of retirement scare you? Wouldn’t you rather strive to enjoy the journey along the way?

The good news is that the traditional concept of retirement is slowly dying.

With the elimination of most employer pension plans and the fact that humans are living longer than ever, we are forced to come up with a different take on how our parents/grandparents view retirement.

Today I’ll show you two different concepts that rethink our traditional retirement model and are gaining popularity amongst the next generation of workers.


What’s Findependence? It’s a term coined by Jon Chevreau: author, former editor-in-chief of MoneySense Magazine and founder of the Findependence Hub, an online platform and community for curated content focusing on achieving Financial Independence. “Findependence” is simply a contraction of the phrase “Financial Independence.”

Financial Independence is the point at which you work because you want to, not because you have to. It’s the tipping point where you have the right level of savings and investments working for you to provide the income you need to live your ideal life.

Think about that. It sounds very similar to our definition of retirement and at the same time totally reframes the perception of what retirement should entail. Rather than focusing on when you can stop work forever, you now shift your mindset to creating enough passive income through investing so that you can pursue anything you want.

Charitable intentions, golfing every day, or continuing to work knowing you’re doing it because you love it. In my mind, this is true financial freedom, as it allows you to make decisions based on your interests, not your financial obligations. This is living A Life of Wealth.

Financial Independence is unique to everyone’s situation. Does $35,000 of annual passive income allow you to follow your dreams of travelling the world and starting that passion product you’ve always had on your to-do list?

If so, maybe you don’t have to work until you’re 65.

So how much do you need to reach Findependence? A great rule of thumb is The Rule of 25.

The Rule of 25 is simple. Based on historical stock market data, your money will never run out if you have 25x your required annual income invested.

Need $35,000 for your idea of Findependence? You will need $875,000 saved up.

Want $60,000 a year for the rest of your life? You will then need $1,500,000.

Note: This simplified model does not include social security, pensions, inflation or taxes. Also, by working part time doing something you love in your Findependence years, you reduce the strain on your portfolio and need much less saved.

I know these numbers seem large and unattainable right now, but if you get started early and stay disciplined with your savings, you would be surprised how quickly it starts to add up over time.

Challenge: How much money could you live off and truly be happy? Now multiply that by 25 to come up with your “number.” Use this calculator to play around with how much you need to save each month to get there. (I would use a 5-6% rate of return for illustration purposes.)

But Brandon, I can’t even think about savings right now with my student loans, rent and lifestyle expenses.

That’s okay and totally normal in today’s environment. The main takeaway is just to start to visualize what that number is for you and get started with saving any small amount. You can always increase your savings as you eliminate your debt and start earning more.

Mini Retirements

One of my favourite books of all time is The 4-Hour Workweek (I know it sounds gimmicky but the views in this book are life changing). If you haven’t read it or heard of Tim Ferriss, I highly recommend you check out his work. He has one of the most popular podcasts on iTunes where he deconstructs world class performers to find tools and tactics that his listeners can use.

One of the concepts that Tim Ferriss pioneered is Mini Retirements. His thought process is why do we spend our youthful years working so hard and adding undue stress just to get to retirement in our elderly years and try to create experiences that we missed growing up. Don’t get me wrong, I’m all for working hard and achieving your goals, but Tim’s solution to this is very interesting and enticing.

Tim’s idea of retirement is to spread it out over your lifetime in various Mini Retirements: small periods of time throughout life that allow you to truly follow your passions. Maybe it’s travelling, perhaps it’s starting a business you’ve always wanted to, or maybe it’s taking the summer off to hangout with your closest friends everyday and play call of duty with breakfast (I did this last year and it was awesome).

I know it’s easier said than done, but my goal is to open your mind to different options and steer you away from falling into the trap of traditional retirement thinking.

With the average number of career and job changes rising, I think this gives way to a valuable opportunity to sneak in a Mini Retirement. It can be just the right fix to give you a fresh perspective on life and discover your true ambitions.

Interested in learning more about Mini Retirements? Check out this interview here.

Challenge: If you could take a 2 month Mini Retirement, what would you do? What would it cost? What would you have to sacrifice and what’s the worst that could happen? Write in the comments below (or make a note in your phone) and be specific.


Many of you may already be years into your professional career making a Mini Retirement very difficult without sacrificing somewhere else: your career progression, a relationship, savings goals, etc. That’s fine – the idea is that the choice is yours and it is up to you to start crafting the life that you want to live. Because remember, as a wise man once said, “You Only Live Once.”

I hope this provided you with some different views on the path to “retirement.” If you are interested in learning about strategies to invest and achieve Findependence, subscribe to my emails here.

Brandon Hill is a certified financial planner and founder of ALifeofWealth.com, a Toronto-based fee-only advisory service targeting Millennials. His investment model leverages the technology of the Wealthsimple robo-adviser platform. This blog originally appeared on Brandon’s site on March 1st and is republished here with permission. 


2 thoughts on “R.I.P. Traditional Retirement

  1. Hey Brandon,

    Good article. You have a great way of presenting in an interesting way.

    I like how you converted the “4% Rule” into the “Rule of 25”, to show how much to save up.

    There is one thing missing in your formula. Inflation.

    For example, if you Findependence for you is $60,000, multiply by 25 to get $1,500,000. That works if today is your Findependence Day.

    However, if your Findependence Day is 20 years from now, you need to add 20 years of inflation, which makes the figure almost $3,000,000. You can use your calculator to convert $60,000 at 3% for 30 years.

    For Millennials saving for future findepence, they mostly need to mutlipy by 25, and then double that figure for inflation.


  2. Hi Ed,

    That’s a very good point. I made note in the article that it’s a simplified model and does not take inflation (or taxes) into consideration, but you are definitely right.

    The rule of 25 is always in present day dollar terms and depending on the inflation rate going forward, an individuals “number” will be much higher in future years.

    Hopefully salary and wages can keep up to help combat this!

    – Brandon

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