Voluntary early retirement is a coveted ambition many people dream of. The chance to spend your days exactly how you want instead of slogging away at a desk until you’re 65 (or older) seems too good to be true.
Plenty of families plan to achieve early retirement – and do so successfully – every day.
But in reality, early retirement isn’t right for everyone. Some downsides to early retirement make this particular lifestyle more of a nightmare than a blissful existence for people who don’t fully know what they’re getting into.
Still, there are things you can do to discover if early retirement is right for you. Visualizing your ideal life, journaling about those visions, and working with a Certified Financial Planner® are all steps you can take to get started. Additionally, here are six signs early retirement might be right for you.
1. You Want Work To Be Optional
Early retirement doesn’t always mean you have to stop working. And indeed, not all early retirees want to stop working altogether. They just don’t want to be chained to the desk, much less to a desk they despise. Some individuals who want to retire early plan to keep working either part-time or at a more fulfilling job that pays a lower salary.
Other early retirees continue running side businesses they had started during their working years, or they start a new business without worrying about its immediate success. Many early retirees who pursue entrepreneurship in “retirement” find that their business ventures cover their expenses. Then their early retirement savings can continue to grow and grow.
If a work-optional lifestyle sounds ideal, then saving and investing toward early retirement may be right for you. A work-optional mindset can lessen the pressure on your investments and even provide you with a healthier, more balanced life than a retirement spent entirely on leisure activities.
2. You Want An Active Early Retirement
Despite the appeal of an empty calendar, an overly leisurely retirement can get boring fast. Many retirees are surprised to learn just how bored (and thus, lonely or depressed) they become soon into their retirement – a time of their lives they’d been dreaming of for decades!
Early retirees who are still young may be especially prone to boredom in early retirement. You can’t assume it’s going to be all book clubs and golf courses. When boredom hits, you’ll be looking for other pastimes to stimulate your mind and body. Now, instead of spending your days making money, you might be looking to fill your time with activities that cost money.
If you have a clear vision of how you’d like to spend your early retirement, and your financial plan is built to fund those pursuits, early retirement may align well with your lifestyle.
3. You Want to Pursue Different Passions in Early Retirement
We spend so many of our waking hours at work that it’s incredible how long the days can feel when you have to come up with your own ideas to pass the time. Just like you’ll need to plan for an active retirement, it’s also vital that you have a variety of passions you want to pursue.
You’re probably familiar with the fatigue that can arise from repetitive tasks at your job. The same fatigue can occur with leisure activities. Unless you’ll be spending some hours of your day running a business, you’ll want to have a diverse set of activities you enjoy pursuing so your brain and body are stimulated on a regular basis.
If you plan to pursue a variety of activities and passions in early retirement, you’re more likely to live an active, vibrant life (as opposed to one that’s lonely and depressing). People who pursue several passions in early retirement are more likely to enjoy their lives and the fruits of their diligent savings.
4. You Believe Early Retirement Will Improve Your Health
Research is mixed on whether retirement improves your health or results in health declines (although individual health outcomes likely have more to do with how you spend your time in retirement). However, some studies suggest that retirees have more time to invest in their health than people who continue working.
Retirees also spend more time doing active activities like gardening, household work, and leisure activities like walking or golf that enhance their physical health. This is a big improvement if you’re leaving a desk job! If you plan to spend some of your early retirement time pursuing activities that will keep you on your feet, early retirement may be a good choice for your overall physical health.
Additionally, early retirement presents an opportunity to reduce your stress if you’re leaving a highly demanding job, so you may experience improved mental health benefits as well. However, individuals considering early retirement also need to be aware of the increased risks of depression that can occur in the first few years of leaving a career.
All that to say, if you have specific plans for how you’ll improve your health in early retirement, you may be on the right track. It’s always a good practice to include strategies for how you’ll care for yourself physically and mentally in your retirement plans.
5. You Want to Spend More Time With Loved Ones in Early Retirement
Demanding jobs can prevent us from spending enough time with our families and other loved ones. If you’re working your life away and sacrificing time you’ll never get back from children or grandchildren, early retirement may allow you to spend that time more intentionally.
Additionally, planning to spend your retirement years with loved ones can help maintain your mental health and sense of identity. Because our self-worth is closely tied to our careers in the US, many retirees struggle with a sense of identity loss when they end their careers, even if they’ve left a job they didn’t enjoy.
Spending more time with loved ones reinforces our sense of self-worth, often in more meaningful ways. If part of your early retirement goal revolves around plans to spend more time with loved ones, early retirement may be the right choice for you.
6. You Have a Financial Plan to Pursue Early Retirement
Finally, early retirement isn’t a choice many people can make spontaneously. Planning to retire early takes years of diligence, careful saving, and strategic investing. You often have to plan for many more years of financial independence as well as a variety of unforeseen circumstances. If you’re already making these plans, you may be on the right track to retire early.
At Caviness Wealth Management, we love helping our clients achieve their dreams of retiring early, and we want to help you plan for all sorts of contingencies. To see if we can help you, click here to schedule a conversation today.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.
