Why is everyone in a hurry to retire?

Early retirement is not all it’s cracked up to be!

© Martha Songa 

 If you follow personal finance content online, it is likely you have come across YouTube videos or other social media posts showing the carefree lives of people who have retired early. Early being before the conventional retirement ages of about 55 through to 70.

Online, early retirement is portrayed as the key to freedom, the gateway to a life of luxury, doing whatever you want. whenever you want. Think not having to wake up early to beat morning traffic to get to a stressful 9 to 5; endless vacations and hanging out by the beach drink in hand.

This trend is driven in part by the popular  FIRE (Financial Independence, Retire Early) movement.  FIRE is a movement of people dedicated to extreme saving and investing, that allows them to quit full-time work sooner than they would with traditional retirement planning.

Having the freedom to do what you want when you want is awesome. And, there is of course an upside to retiring early which proponents of FIRE show off very well.   But there is another side to early retirement that we don’t hear much of. Retirement is more than just achieving financial independence; it is a major life-changing event. And the reality is it’s not always fun and games.

Here is why:

 Missing out on structure and intellectual stimulation

Even with all the challenges that can come with work including bad bosses and insufferable colleagues, the work place can provide mental stimulation and a sense of purpose and achievement. It provides opportunities to learn new skills, develop professionally, and contribute to making a meaningful impact on society. Having a job, especially in-person work, can create a sense of camaraderie and shared experience that can lead to meaningful relationships.

Fun fact: fifty percent (50%) of retirees who consider coming out of retirement do so because they enjoy the intellectual challenge/stimulation from working.

 

Identity crisis. Who am I?

What we do for work is closely tied to our identity. When meeting people for the first time in a professional or even informal setting usually one of the first things that you’re asked is “What do you do?”

Our sense of identity is closely tied to our jobs; it is one of the factors that shapes our definition of who we are as individuals. 

 

 Plain old boredom

Unless you plan ahead how you will manage your free time, you could end up having more hours a day of free time than you know what to do with. In turn this could lead you to second-guess your actions. Even traveling the world can soon become exhausting and, yes, boring after some time.

 

Life can get more expensive

The purchasing power of your cash will shrink over time. That is unless you have invested wisely building a portfolio of assets that can withstand inflation.  Lots of free time also means your expenses could shoot up. To alleviate boredom, for instance, you may engage in impulse spending, thus reducing the cash you have to live on.

 

Retirement ≠ happiness

“No matter where you go, there you are” so the saying goes. Or something like that. If you are not happy with your current life, retiring will not make you happy. So many people think that once they achieve financial freedom or leave a job they dislike, they'll suddenly be permanently happier. What are some of the things that bring you joy?  Identify them and do them. Now. Don’t wait for retirement to do the things you love to do.

 

Lack of stimulation and social interactions

Even seemingly simple things like not getting invited to events that working people get to attend can get to you. Once retired you’re simply not top of mind to work colleagues and you will get left out of certain events.  Extended periods of social isolation can harm mental and physical well-being. People are social creatures, and lacking support and contact with others can contribute to loneliness, cognitive decline, anxiety, and depression.

 

Retirees actually want to return to work!

According to the   survey from F&G, half (50%) of pre-retired and retired Americans are considering delaying or coming out of retirement.   Financial factors are part of the reason; 52% of pre-retirees worry they won’t have enough money in retirement, and 42% worry about inflation.  But money doesn’t tell the whole story, many people return to work for non-financial reasons. Half (50%) of retirees consider “unretiring” because they enjoy the intellectual challenge/stimulation from working, and 36% feel a lack of purpose in retirement.

 

Still want to retire early?

Plan for it

Take time to review your concerns, understand your goals and build a plan to get there.  Think through what you'd like your retirement to look like and plan your new lifestyle in advance.

This includes things like planning for activities you will engage in such as travel, volunteer or part time work. It also involves financial planning; saving and investing your money and giving it time to grow, to help ensure you can live comfortably in your later years.

 

Ease into it; consider a trial period

You could always continue working, but do less by switching to a part-time role or going freelance so you can choose when to work. This would maintain some income and stave off boredom, while still freeing up extra time for travel, hobbies and relationships.  If you are in a rut and can afford it, a career gap might be what you need to get back on track, not full-on retirement. Taking a break is a good way for you to test out what life might look like; testing the water before you jump in with both feet. To find out, for instance, what implications the lack of a regular income has on your ability to survive.

 

Listen to the experts

This is something many of us might overlook but seeking the services of an advisor will help ensure you are well positioned to achieve the retirement you want, both financially and otherwise. Work with a retirement expert to create a realistic projection of what your needs will look like and ensure you have the right financial products to meet your needs.

 

Don’t blindly follow social media trends

While social media accounts may provide the initial spark that makes you consider early retirement, remember you only usually see one aspect (usually the glamorous side) of this person’s life.  Let your journey be authentically yours and not influenced by social media. 

 

Do the work and find what will work for you. Then and only then should you take the leap.