As an early retiree, I ought to know.
Sebastian here, and today I want to burst the FIRE communities bubble a bit by telling you what it’s really like to be early retired.
And it’s not all fun and games.
True, being retired gives me a lot of flexibility to pursue more of the things I want to pursue, but along with that flexibility come some drawbacks.
Now before we go any further I want to make it very clear that what I’m referring to is true early retirement, not what most FIRE bloggers are doing. I mean NOT WORKING for any income.
Like, at all.
None of this, “I left my day job and now make a living blogging” early retiree stuff. That’s not the retirement I’m talking about.
Okay, now that we’re clear, let me tell you the reality of being early retired and why it’s no fairy tale.
My Early Retirement Journey
Let me begin by telling you a bit about my own situation.
I retired 6 years ago at the age of 58. While not super early retired, I left my job earlier than I’d originally planned (around age 62), and much earlier than the “full retirement age” of 66.
While the average American still tends to retire around age 62 (the minimum for social security), the trend for recent, healthy retirees is to retire much older, around age 70 (the maximum for social security).
So, I’d say I made the cut for an early retiree.
The circumstances surrounding my decision to retire early were very similar to the sentiments I read about in the FIRE sphere.
I had come to a place where I was unhappy and stressed in my job, and I had the means to live comfortably if I retired. I had put in my time and didn’t want to deal with the bureaucracy anymore.
Plus, I was essentially being forced out after a department merger due to my age and higher salary.
Could I have fought it and won (especially being a man of color)? Sure.
Was early retirement and a nice severance more attractive in the moment? Hell yes!
As Steve Miller would say, I took the money and ran.
Now, don’t get me wrong, being retired has its perks, and it’s much preferable to the stress I was enduring at my job. But after being retired for 6 years I can’t help but wonder about how my life would be different if I’d stayed another couple years, and if I made the right choice.
Being retired, especially at a younger age, comes with disadvantages that you’d better be prepared for going in.
I wasn’t and was in for a bit of a rude awakening.
Redefining Your Life and Purpose
I’m sure you’ve all heard tales of people struggling in retirement, and while it may seem absurd to you, there is a lot of truth to it.
The extra time you so crave comes as quite a shock in reality.
You see, there’s suddenly a big hole in your life after working for so many years and having so much structure, and you need something to fill that hole.
And it’s not as easy to do so as you might think.
Once you’re retired you must completely redefine your life and purpose around things other than your career. 40 hours a week (or more) is a lot of time to fill, and many people struggle to do it.
I know I did.
Leading up to my retirement I had all these grand plans for things I wanted to do. But there was just one problem; those things didn’t completely fill the hole I had after leaving my job.
My reaction was to frantically begin adding more and more things, until I was almost more overwhelmed trying to keep pace with my “retired” lifestyle than I was when I was working!
You see, you can’t just travel, or volunteer once in a while, or spend more time with your family. Those things may fill the hole for a time, but you’ll either get bored (travel, family), run out of money (travel), or feel a lack of accomplishment (maybe all three).
If you’re an individual who is always working toward something, you’ll find many of these so-called retirement dreams don’t fill the bill for long.
It took me a long time to find a balance I could handle, and I’m still searching for that sense of fulfillment.
Which is why I started this blog, although I’ve yet to come out of full retirement to make a living from it.
Filling Your Days
I already talked about this a bit above, but one of the struggles of being retired is filling your days in a meaningful way.
Sure, sitting around and “relaxing” is fun for a while, but if you’re anything like me that will get old really fast. Next thing you know, you’ll be looking around for ways to fill the days, especially if you’re single or your spouse still works.
If you’re early retired like me, you’ll find that most of the people you know are still working and won’t be there to help fill your days. Most of the time I find myself alone in the house, and I’ll admit there are many times I struggle with that.
Luckily, I have found a balance that works for me, so between exercising, volunteering, visiting family and friends, housework, blogging, and putting out fires I’ve been able to fill most of my time.
Just know that this will be a problem for many of you, especially if you’re a young retiree.
Many of you FIRE people have said you want to retire early to pursue travel and hobbies, and I don’t blame you.
That’s why I’m sorry to say that unless you’ve amassed a great deal of wealth or have an even better pension than I do, you’ll likely not be able to pursue all that you wish on the income of a true retiree.
Especially if you’re an early retiree relying on investments and frugal living to make your retirement work.
No matter how you slice it, your lifestyle takes a bit of a hit when you retire. There simply isn’t the same amount of money coming in.
My monthly income is about 2/3 of what it was when I was working. I also have a modest social security income because I chose to begin drawing at age 62, and I need every penny of it to maintain my lifestyle.
I do have a 403(b) and other investments I can draw upon, but I’d rather save those funds for large expenses (such as my daughter’s wedding a few years back).
Life doesn’t stop working just because you do. You still have repairs, medical bills, weddings, travel, and a plethora of other things to worry about on less income.
If you’re an early retiree, you may have kids’ education expenses and other large-ticket items to worry about.
Be aware, the dreams of traveling for years on end and pursuing whatever strikes your fancy isn’t very realistic when you still have life to pay for and less money to do it.
Loss of Benefits
This is a big one that most don’t seem to think about and is one of the major advantages of a regular 9-5 job.
Healthcare is EXPENSIVE! Especially if you’re a little older and require more care.
Hopefully most of you know that you can’t start getting Medicare until you’re 65. The only way to qualify for it earlier is if you’re on disability. That means you must pay out of pocket for healthcare if you’re not covered by your employer.
Early retirees must pay a significant amount out of pocket every month if they want to be on a healthcare plan. The only way around that is if your partner is still working.
How much? Of course, that depends on many factors, but my household out of pocket expense was north of $1,000 a month for a time while my wife was between jobs.
Thank God I didn’t have a mortgage payment!
You’re Not Working, You Have Nothing Better to Do
Moving away from income and expenses, another disadvantage to being retired is that everyone thinks you have all the time in the world to do whatever they want you to do!
Think you’ll fill all that extra time with things YOU want to do? Think again.
Because I’m retired, my family and friends seem to think I’m just sitting around twiddling my thumbs all day, and so invariably I’m the one who gets tasked with everything.
Any issue that comes up, I must take care of it. Any errands fall to me. House and yardwork? Yep, almost all of it. Family coming to town? I’m the chauffeur.
I’ll tell you for a fact, I’m busier now than I was when I was working.
Don’t think it’ll never happen to you, because it will. You may not be working a day job, but you’ll be working everything else.
Moral of the Story
All of the above is to say that being an early retiree isn’t always the fairy tale you dreamed it would be.
A gaping hole to fill in your life, decreased income with the same (if not more) expenses, and the sudden delegation of almost all tasks falling to you mean you likely won’t have nearly as much time and flexibility as you thought.
It’s nice not to have the stress of the 9-5, but it served me well for over 30 years. I’ll tell you right now, if I didn’t have the security of my pension for the rest of my life I’d be a lot more stressed in early retirement than I ever was at my job.
I get wanting to leave the 9-5, but carefully consider what you’re getting into before you fully retire, especially if you’re younger than I was and have a long time left to live.
Are you sure you can live on a decreased income? Are you prepared to potentially sacrifice travel and hobbies to maintain that lifestyle? Can you afford healthcare and major expenses?
You may find early retirement isn’t all you dreamed about.
Talk about Money Saved.