Have you dreamed of early retirement? How about the freedom it brings – financial and otherwise? It’s not just you who dreams of early retirement. In fact, since 1992, people…
Have you dreamed of early retirement? How about the freedom it brings – financial and otherwise? It’s not just you who dreams of early retirement. In fact, since 1992, people have embraced the F.I.R.E. movement . It has become more popular in recent years. As an example, Natixis Investment Managers reported that Generation Y (ages 26-61) wants to retire at the age of 60 on average.
There is a slight hiccup, unfortunately. 59% of Americans don’t believe that have enough to retire , let along retire early. There are number of reasons why a majority of people feel this way. Everything from overwhelming debt, the impact of the pandemic, and inflation.
At the same time, all is not lost. As well as getting your retirement savings back on track, you might be able to still retire early. How? Well, let’s show you in the following guide. What is Early Retirement?
Before you commit to early retirement, make sure you understand what exactly it means.
In the past, early retirement was defined as retiring before the age of 65. Technically, this is true. Nevertheless, it’s an evolving concept.
You don’t have to give up work completely by taking early retirement. Rather, your employment is purely voluntary. That means you’re free to live your life as you see fit. Why? Because you have the financial freedom to do so.
Believe it or not, people as young as 30 or 40 can take early retirement. But most of them also work in some capacity, such as with their passion projects or other endeavors.
More simply put, people who work this way do it for themselves, not because they have to.
It is important to remember that work can be fulfilling, meaningful, and purposeful. Additionally, some studies suggest that people who retire early and do not work at all may die earlier than those who remain employed.
Conversely, early retirement enables you to spend more time with your family and friends. You can also start your own company or pursue new hobbies. Or, maybe you’re burned out from the daily grind.
For many, stopping working isn’t the ultimate goal. Instead, it’s about having the freedom to do what you want. What are the Pros and Cons of Early Retirement?
Getting to early retirement can be tough. But the rewards are typically worth all of the struggles once you reach it. Again, as soon as you retire, you are free to spend it as you choose.
Among the things you can do with all that free time are: Bond with family and friends. You can visit your friends and family more often when you retire and stay for longer periods of time.
Take extended vacations. The question might arise, “Who on earth can spend a month in Europe or take weeklong cruises?” Now that you’re retired, the answer is obvious: You can.
Enjoy hobbies. Your days can be filled with the things that bring you joy once you retire, whether that is golf or reading.
Volunteer. There are many reasons why people do not volunteer, one of them being lack of time. Giving back to your community becomes a lot easier once you retire.
Early retirement might sound amazing, but there are a few downsides. There are even experts who claim that early retirement isn’t worth the effort. For example, 64% of Americans live paycheck to paycheck . Thus, pushing yourself to fit into an early retirement plan can be stressful and counter-productive.
Another drawback? You might get bored. In early retirement, you may wish that you were still working so you would have something to keep your mind occupied. Yes. You get to travel and engage with new hobbies. But, will this truly keep you stimulated for the next 40 or 50 years?Overall, the financial risks of early retirement are substantial. That is, unless you have a number of sources of income or have more than enough money in the bank. If not, early retirement may completely bankrupt your dreams . Phase 1: Pre-Retirement Planning When you’re young, you can adopt the right mindset and financial plan to help you retire early. If that sounds daunting, here’s how you can get the ball rolling. What does early retirement mean to you? Retiring early doesn’t mean you have to stop working — unless that’s your endgame. Early retirement is instead a term used to describe a […]
Protected by Patchstack