The question “how much do you need to retire?” is pretty much standard. Conversely, “how little do you need to retire?” is extremely rare. Just consider, for a moment, the difference in perspective required to ask that question. Many simply don’t get it. Perhaps it is no wonder when living in a society that always strives for more, more, more. Yet, it saddens me to see fellow early retirees or wannabe early retirees, who are getting inspired to retire before they reach 40 and actually did ask the question in the right way, only to get shot down with arguments from experts that everybody needs one, two or sometimes three million dollars before it is safe to retire. If you don’t have, say, three million dollars, you will never be able to pay for all your retirement needs, they say. Yeah, like if you’re not driving a Hummer H1 you won’t be able to safely drive down to Wallyworld to buy a box of twinkies.

Just imagine how discouraging this general attitude is?

Please consider for a moment the wide range of people’s supposed needs. You have pop stars that are going broke despite earnings millions because they can’t afford their indoor zoos and then you have plumbers (mostly named Joe) that earn normal wages (the average wage for a plumber is around 40k) and yet manage to accumulate large sums of money.

This tells me that financial independence and hence retirement can be done on incomes ranging anywhere from $10000 a year to $1,000,000 or more a year. Early retirement, therefore, is just a choice of where you want to be on this scale and how much you are willing to give up to get there. Once you have chosen your income level, you then choose your savings rate and that determines how soon you can retire. Early retirement is a combination low expense levels and high savings rates, e.g. $10,000 and 80% .. Late retirement is a combination of high expense levels and low savings rates e.g. $40,000 and 20%.

Some people say they need $50,000 a year in retirement. No! They want $50,000 a year and therefore they need one million(*) — notice the difference between want and need — and since many of them are not making substantially more than $50,000 a year they therefore need to work most of their life so that they can enjoy a $50k/year income. This is their choice. It is not everybody’s choice and it is not the only choice.

(*) Using what you learned in finance 101, you can use exponential functions to translate this amount into future dollars for more sensational numbers. Many pf bloggers do this exciting exercise once a week as a free public service :-P .

There are also a few of us, who choose to live on much less in return for the time that would otherwise be spent on accumulating money and spend our life-energy doing things that are more meaningful to us than spending money. We want more time and we willing to spend less in order to work less. Consequently, we need less in retirement savings, even less than a million. Actually quite a bit less. And thus we can accumulate it fast. Quite fast, actually.

It’s a choice. How little do you need? Simple, how little do you want?