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Should You Retire Early?

Are you one of the 80 million baby boomers heading towards retirement? If so, you may be asking yourself this question: can I retire early?

What is usually meant by this question is whether you can AFFORD to leave the workforce at an earlier age.

Of course you need to determine what leaving early means from a financial point of view (more about this later). However there has been so much emphasis on the financial side that I would like you to first look at other parts of the equation.

  1. What will you do with your TIME?

    The working world has ruled your life for many years on a day-to-day basis, from deciding what time to get up in the morning, to the people you regularly see, to the kind of work that occupies your time. Along with all of this comes the stress of commuting or traveling on business, the need to dress in a certain way, and the pressures that leave you drained at the end of the day.

    You have likely grown tired of most of this and dream of the leisure time you will have when you retire. Time to do what YOU want. Travel more, play more golf, see all your friends and find some new interests.

    But will that be ENOUGH to feel satisfied? Or will you, like so many others, get bored within a few months of this more relaxed lifestyle?

    The fact is,
    purpose and motivation
    are what keep us going.

    Here are some important questions to ask yourself:
    • Do I still find enjoyment and satisfaction from my work?
    • Is there a more meaningful activity that I would rather be doing? Do I know what this is and have I put some time and energy into developing it?
    • Do I have a DREAM which I want to go after? If so, can I start preparing for it or take any needed training, while I am still in the workforce?

  2. What about your HEALTH?

    If you are presently working 60- or 70-hour weeks in order to save enough money for your retirement, you may not have the health or vitality to enjoy any of it. Many people die within a few short months of a long-awaited retirement!

    As we get older, we need to pay more attention to our physical needs.

    Getting the right amount of exercise and sleep and following a good diet become increasingly important. The frantic pace of many workplaces makes it difficult for us to remain there for too long.

    Ask yourself:
    • As I continue to work in my fifties or beyond, am I able to lead a BALANCED life? Can I take the time I need for exercise? Am I sleeping enough? Eating well? Able to see my friends on a regular basis?
    • How is my general health? Am I getting a lot more tired than I used to?

      Health is a big factor in choosing early retirement. It may take a stroke or a serious illness for some people to realize that they need more time to look after themselves. Or they may have to look after a spouse, aging parent, or other relative and require more time in their lives to do this properly.

  3. You need to make a difference

    The working world usually provides a network of colleagues and other people whom we see regularly. We also feel we are providing an important service by whatever we are doing. Getting paid automatically gives it value.

    When you retire, suddenly you are on your own. Will you have a reason to get up in the morning? We all want to feel needed in some way. If you have grandchildren near-by, this will fill some of your need.

    If you do not have a spouse or other family that you can spend your retirement years with, you should ask yourself:

    What can I contribute
    to my community or to the world at large?
    This is a very personal question that you alone can answer!

    You are at a wonderful point in your life — with the life experience, skills and maturity to make a difference for others. In later years we normally experience a stronger desire to “give back” to the world.

    For some people this means volunteering in an area that appeals to them: for instance, with sick children, anti-poverty or environmental groups, or by visiting shut-ins or providing meals for the needy. For others it means developing their creativity and sharing their work with the world, such as through writing, painting, sculpture or crafts.

Now for the Financial Picture.

It seems everyone these days is giving us advice on whether we can afford to retire. According to most financial advisers and planners, the answer is a resounding NO.

I remember sitting with my colleagues at a retirement planning seminar while I was still in the workforce.

Through a number of dramatic graphs and hand-out documents, our dreams of retiring at 55 were dashed to smithereens. With dwindling government funds, inflation and greater life expectancy, how could we expect to support ourselves into our eighties and nineties? Forget about retiring early, we were told. Our company pension would only take us so far.

How discouraged I felt,
thinking that I had to work another ten years
before retiring!

Fortunately a few things changed my mind. A busier period at the office forced me to put my current novel, written in bits and pieces, on permanent hold — and my mother was diagnosed with Alzheimer’s. I knew that I couldn’t keep up with my challenging job, look after my mother AND continue my writing.

That was when I looked into early retirement. By cutting down on expenses and making some money through my writing, I figured I could retire early. I made plans to leave in two years, when I turned 49.

Once I made the decision to leave, a new door opened for me!

I received coach training as part of a corporate mentoring program. At the same time I heard that a number of older employees would be given the option to early retire and realized that most of them would not be prepared psychologically. Wanting to leave something positive behind, I gave a workshop to co-workers on Find Your Mid-life Passion. I had never done public speaking before and was surprised by the standing ovation at the end.

This led to another corporate workshop and, after I left the workforce, to a public lecture which drew a large crowd. Next I was asked to lead a smaller, more interactive group which turned into my Dream Achievers Program.

My writing now focused on personal growth. I wrote a series of articles, some of which appear on this site, and developed a column, called Take a Moment, to help people deal with larger life issues. Life coaching, as well as writing, provided me with extra income when I retired.

If I hadn’t committed to my interests and made the decision to leave the workforce, none of this would have happened!

It is when we commit to our dreams, and take steps towards them, that things begin to change.

Scale down, simplify and
take back your life!

Many people, as they near the end of their employment years, become fed up with all the compromises they must make on a daily basis for the job.

There is a movement afoot – to simplify our lives and quit the workforce early to lead a more relaxed life. Thousands have found a way to cut back their expenses, sometimes moving to a smaller house, so that they can afford to lead jobless lives. Countless numbers pack up the house to follow their dream of traveling around the country in an RV, especially during winter months.

Financial advisers tell us that to “maintain our lifestyle” in future we must work “X” more years full-time. The truth is, we can successfully and often quite painlessly scale back – and put more life into our years by leaving the job earlier rather than later.

Books that will help are: Simplify Your Life by Elaine St. James and Your Money or Your Life by Joe Dominguez and Vicki Robin. A useful link is:

Other Factors to Consider

You may have reasons to stay in the workforce for awhile. Maybe you still have to get your children through college, or have a huge debt to pay off before you can save for retirement. Maybe you are still paying off your mortgage.

Think of the expenses you need to clear off beforehand as well as the benefits you may lose through retirement such as dental, medical or insurance coverage.

The question that looms in your mind is: will I have ENOUGH?

It is difficult to answer this correctly when so much of your future remains to be seen!

Other things to think about:

  • Do you plan to work part-time or in a second career?
  • Are you able to cut down your living expenses?
  • Can your spouse shoulder some of the expenses?
  • Are you expecting an inheritance?

To see your own financial picture in detail, you need to sit down with a financial adviser. Be sure to tell him or her about ways you are planning to improve your income in retirement and whether you are willing to scale back.

There are also helpful retirement planning tools on the Net, such as (go to SmartMoney Retirement Worksheets or “How Long Will My Money Last?”)

In today‘s workforce reality it is possible that the choice will be taken out of your hands. You, like so many others, may be forced into an early retirement. In this case, you will likely be given a compensation package to ease the transition.

What if there are NO early retirement incentives but you are tired of working full-time? Examine other options – such as reducing your work hours or switching to part-time work. Your health and your time are not replaceable. Once they are gone, all the wealth in the world will not bring them back.

You cannot begin saving for your retirement too soon (in your thirties would be optimal, to let your investments grow tax-free).

Start thinking of a new focus for your retirement years long before they are upon you. Develop your interests! YOU‘LL BE GLAD THAT YOU DID.