Should I Retire Early?
I have not addressed the subject of early retirement in this blog as I feel it is important for people to first and foremost understand and implement the basics of retirement planning. But over the course of writing this blog I have had more than a few people subtlety enquire as to how it is possible for my wife and I to retire early without an employer paid pension or health care benefits. As well I have gotten questions about what we do every day in retirement. Over the next few posts I will discuss what is involved in retiring early, how we were able to achieve it, and a few thoughts about retiring early from our experiences.
When I say retire early, I do not mean retiring at age 40. I have read many books and articles about people retiring in their early 40s and it always seemed so unrealistic to me. In my opinion the budgets these younger people assume they can live on are incredibly naïve. For example their budgets always have categories such as “$150 per month for entertainment,” or “$1,000 per year for health care costs.” I guess these people rarely go to the doctor and cannot imagine ever being unable to mow their own lawn. Even if you were willing to live on these austere budgets when you are younger, it is not realistic to do so when you are older.
When I say retire early, I am talking about a scenario where you have to regularly pay to go to the doctor for age-related illnesses and you are not denying yourself every modern day pleasure. Unless you are incredibly lucky, a realistic early retirement means leaving work about 5 to 10 years before the normal retirement age of 65 years old (for the average baby boomer normal retirement is now probably closer to 70 years old).
Asking the question “Should I retire early?” is really asking three separate questions:
- Do I want to retire early?
- If yes, what lifestyle changes do I need to make to enable early retirement?
- After learning of these lifestyle changes, do I want to retire early bad enough that I am willing to make these changes?
Although no one likes everything about their job, some people really love their work and cannot imagine doing anything else. I have always been envious of these people. They have a sense of purpose in life that is beyond anything most people will ever experience. I have a few family members who really love their work. I have noticed they all seem to be in the health care field. Helping people on a daily basis is truly something that can be very fulfilling.
I had a career that involved crunching a lot of numbers. Jobs involving lots of numbers tend not to be jobs people want to do their entire lives. Although I had a pretty successful career as a financial analyst, I always knew that I would prefer to be doing something else. In other words, I always felt the sooner I retired from paid work, the happier I would be.
I remember during the last couple weeks before I took my “6-month leave of absence” from work, several people made the comment that after 6 months I would be “so ready” to get back to work. Not only did I not return to work from my leave of absence, now, after 20 months, just the thought of going back to work makes me ill.
I can honestly say, now that I am retired, I have never been happier in my life. I get up when I want. I do what I want. My wife and I now do activities we had always wanted to do but never had the time. I have a couple activities I do regularly once or twice per month, but most of my activities I do on my own schedule, such as preparing our boat for our trip south and writing this blog. So far I am not the least concerned about being bored in retirement.
So the first question you must ask yourself is “do I want to retire early?” Just like me, most people answer yes to this question. If you answer yes to this first question, the next two questions are, “what changes are required in my life to retire early and am I willing to make these changes?”
And the lifestyle changes most people must make to afford early retirement is where the rubber meets the road……
In my next post I will discuss the implications of having early retirement as a goal.
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