- October 28, 2018
- Posted by: Ethica Private Wealth
- Category: Blog
Early retirement is something that many people think about when planning for their later years in life. To some, the idea is ludicrous. To others, it’s a talisman of opportunity which motivates them to work harder and build their savings pot.
When you first begin thinking about retiring early, there are a lot of things to consider, and some things you may not have even thought about. Before getting your heart set on an early retirement, it’s important to understand exactly how it will affect you. In this article, you can find some of the biggest pros and cons of early retirements.
Here are 7 things you should know:
1. It Isn’t the Right Decision For Everyone
For people who are tired or burnt out in their current job role, the prospect of early retirement can feel like a godsend – but that isn’t the case for everyone out there.
The truth is, not everybody enjoys retiring early, and some early retirees report feeling a lack of purpose and even struggle with depression after retiring. This is usually prominent in people whose goal is to simply ‘retire’ but have no real plan for what to do after that.
If you are retiring to fulfill other dreams, then early retirement may be a good choice for you, but if you’re unsure what to do when you retire, a simple change of career or reduction in hours may do the trick.
Read More: 7 Real Reasons People Retire
2. You’ll Probably Continue to Work, In One Way or Another
Early retirement doesn’t necessarily mean an end to work; it can simply mean a change of lifestyle. Many early retirees use their new found freedom to redefine the meaning of ‘work’ and continue to earn through more unconventional methods than before, safe in the knowledge that they have their retirement savings to fall back on.
Often, people will choose to monetize their hobbies, start their own business, or try something they have always dreamed about. Working during retirement can offer a really fun opportunity to do something you love whilst still giving something back to society, and it can also mean that those retirement savings deplete more slowly.
Read More: 6 Ways to Earn Money During Your Retirement
3. You Can Always Return To Work
One of the main reasons people miss out on the opportunity to retire early is because they are concerned about what the future may hold. Some people worry that the decision to retire will be the wrong one, and that they will wish they could turn back the clock and return to work.
The good news is, this is 100% possible. In Australia, you still have the opportunity to rejoin the workforce, even if you have taken a lump sum or are receiving super payments.
4. It May Be Lonely
One of the main drawbacks associated with early retirement is loneliness. Although early retirement is a possibility for some, a lot of people won’t choose or have the opportunity to retire until they are 65 or older.
This means that, if you choose early retirement and have friends that are the same age as you, it’s likely that you will be going at it alone. If you have friends and family around that will stop you from becoming isolated, then hopefully this won’t be too much of a problem.
5. You Can Be a Part of an International Community
There are also a lot of ways you can become a part of an early retirees’ community online. In order to combat the isolation that can accompany early retirement, early retirees across the world have formed a network of like-minded people who interact online and in person.
It’s easy to join Facebook groups which are aimed at early retirees in different areas and it can be a great way to get advice, make friends, and learn more about how other early retirees are spending their time.
Online working and blog writing are popular pastimes in the early retiree community which makes finding travel and inspirational blogs and YouTube videos made by like-minded individuals easy.
6. Not Everyone Agrees With the Concept
Unfortunately, not everybody has a romantic idea of early retirement, and some articles online suggest that some early retirees have been subject to criticism about their decisions.
Most early retirees take this with a pinch of salt, but this is more difficult to do if the criticism is coming from people who are close to you.
When making your decision to retire early, talk to your loved ones and find out their thoughts about it, but always remember to do what’s right for you because this is likely to make you happier in the long run.
7. Money Isn’t Everything
One of the biggest factors preventing people from retiring early is money. Some people are nervous about not having enough money, and some simply have no idea how to calculate how much they will need to save.
Whether you’re 35 or 65, retirement planning is difficult, but luckily you can find a lot of help and advice online. If you are finding it really tough, you can always speak to a financial advisor to see if they can help you make sense of the situation.
Some early retirees have reported that they thought they would need more money than they did in order to retire and that this prevented them from doing it sooner. If you are really keen to retire early, seeking advice from a professional could help you to get a better idea of what you will need to do.
Don’t let money worries stand in the way of your dreams
For most people, early retirement means more than just quitting a job you don’t like. For many, it is a new opportunity to live life to the fullest. If this sounds like you, then it may be a good idea to do what you can to turn your dreams into a reality.
Want to find out if early retirement is a possibility for you? Contact a retirement planning specialist, like the team at Ethica Private Wealth Specialists, to find out how you can retire earlier than you expected.