If you have seriously been thinking about an early retirement, you are not alone. According to the U.S. Census Bureau, the average retirement age among American workers is 62. While some may have early retirement forced upon them, for others, such as yourself, it’s a part of the plan. Assuming you have crunched the numbers and have found you can create sufficient income for as many as 35 years or more, you are on your way. However, there’s much more to an early retirement than being financially prepared. If you’re not mentally, emotionally and physically prepared, you could find your golden years to be painfully unfulfilling. Here’s how to determine if an early retirement is still the right move for you.
It’s for Your Health
One of the primary reasons given for considering early retirement is health. According to a Fidelity survey, work-related stress has prompted 55% of pre-retirees to plan an early exit from the workforce. Among retirees surveyed, 64% say stress was the reason they retired early. Stress is known to be a quiet killer negatively affecting your health in a number of ways. If it can’t be dealt with through other coping mechanisms, it may be time to walk away.
Early retirees need to remember that Medicare eligibility starts at age 65. If they are dealing with stress, it would be important to have in place a plan to cover the insurance gap years. More importantly, adopt a lifestyle that focuses on maintaining or even improving your health so you can get the most out of a longer retirement.
It’s for Quality of Life
Most early retirees aren’t content merely swapping a life of work for a life of leisure. To them, it isn’t about lifestyle in retirement; it’s about quality of life and having the freedom to pursue their happiness. They would be perfectly fine with downsizing their lifestyle – a smaller house, a more affordable car, a more affordable place to live – to focus on the things that can bring true fulfillment, such as spending more time with family and giving back to the community.
It’s about Your Passion
Most people can’t imagine coasting through their next stage of life not being able to apply their talents in a meaningful way. Early retirement is an opportunity to trade in work they no longer want to do for work they really like to do, whether through volunteering, monetizing a hobby, starting a new business, or helping others to acquire your knowledge and skill set.
The same Fidelity survey found that 80% of pre-retirees and recent retirees view retirement as a new life stage brimming with new opportunities. The desire for freedom and taking control of their life is so strong for many of them, they would choose early retirement even though they have achieved their retirement savings goal. For them, it is no longer enough to know they will have enough money in retirement; they need to know how they will make the most of it.
If you’re considering an early retirement, why not have a conversation with me to determine if it’s financial feasible. We’ll set you up with a retirement plan, leaving you to enjoy the pleasures of the “next phase”.