Only workaholics do not look forward to retirement. Everyone else dreams of the day when their career driven days are over. The idea that the period when life is not driven by the need to earn wages will come at an early age is a great hope for the masses.
There are very few things that excite the thinking more than early retirement. Not every aspect of early retirement may be good for you. Besides the obvious problem of not having enough time for your retirement investments to grow, here are some other reasons to rethink early retirement.
Not everyone is suited for a life of leisure.
The inactivity that is a part of retirement can be a problem for people who have a Type-A personality. While retirement does not exactly equate to inactivity, it should mean a slower paced lifestyle. Some who take early retirement are compelled to return to the workforce because they do not enjoy retirement.
Retirement is relatively unstructured.
By nature, retirement should be a time to do what you want when you want. Structure is what keeps some people on track. An unstructured environment can cause some to stop doing anything. This can lead to a reclusive lifestyle that is rarely viewed as a good thing.
Your self-identity and self-worth may come from your job.
If what you do and who you are too closely tied together, you may find yourself lost in retirement. For people who answer the question of “who am I” by stating their profession, their sense of self may need to be rethought before retiring. You may feel unknown and without value after you retire. Retiring early can increase these feelings because you are still young and capable of working as hard as ever.
You will not have Social Security and may not have a pension available at retirement.
By retiring in your 30’s, 40’s, or 50’s, a portion of your retirement income may not be available to you. Your retirement accounts must be much larger to compensate for this lack. The alternative is that you have to create some type income stream that will provide you with a passive income to make up the difference. If you do not do this, you risk either not having enough income in retirement. This can result in you having to spend down your nest egg or continue at some type of part-time work.
Some early retirees can have marital issues.
Unfortunately, there are married couples whose relationship works because they are apart more than together. These couples get most of their time as a couple on weekends. They may even work opposite shifts. Once they choose to retire early, they are forced to confront relationship issues that could be largely ignored when they had little time together.
In the worst case, this leads to separation and divorce.
This can happen even when couples retire at 65 or so. However, the extra years can give them time to develop other interests and even have grandchildren to distract them from their relationship problems.
Friendships may be lost due to early retirement.
A whole host of possibilities come to the surface when you make a major life change like early retirement. Significant numbers of friendships are created around your work environment.
Retirement moves you away from these friends.
A lot of work friendships do not survive once the work relationship is severed. You run the risk of being used by friends who see you as always available for errands and help since you are retired. This may become a problem that could fracture even a strong friendship. Friends might become jealous of your new freedom or perceived wealth and independence. This will cause them to distance themselves from you.
You have a longer time for inflation to become a major player in your financial picture.
By retiring at 65, most people have 15 or 20 years to deal with spending power being erode by inflation. With early retirement, this time line can be doubled or more. You may have Social Security or pension income that will kick in at 65 or before to help with this problem. However, you risk the problem becoming too much to deal with before you reach that age.
