The Dangers of Early Retirement

MMD: The following post is a guest contribution from Deacon Hayes @WellKeptWallet.com.  It’s about a topic that I think about often: How will I constructively make the most of my time once I achieve financial independence?  

There are a lot of things about retiring early that people find enticing!

The option of having to work ten, twenty or thirty years less than most people work brings with it many attractive benefits.

First, there is the freedom. Having enough income from investments to do what you want, when you want means you are no longer forced to live under the schedule of the company you work for.

If you want to travel, you can. If you want to live without an alarm clock, go for it. When you retire early your time becomes your own a lot sooner than that of typical retirees.

There’s also the benefit of no longer having to worry about money. You’ve worked and saved like a boss, likely for a decade or more, and now you’ve got enough passive income to not have to work at a traditional job in order to do the things you love to do. It’s difficult to put a price on that kind of freedom.

However there are also dangers that come with retiring early. Those who retire at sixty-two and beyond are often ready to rest, relax and keep an active schedule that doesn’t overload their senses.

Those who retire younger, though, may face different types of dangers than those who have the wisdom of decades of experience on their side.

Boredom

You’re thirty-seven years old and your days are now your own. It’s the dream of every Financial Independence and Retire Early (or FIRE) fanatic.

The problem is that most or all of your friends and loved ones aren’t on board with your plan to retire early and will still be working full-time for two or three decades. The first few weeks of early retirement were great, but now you’re finding yourself bored as you look for things to do besides browse the Internet all day.

Long before you hand in your resignation, you need to figure out why you want to retire early. One of the biggest mistakes early retirees make is that they spend their time working to get away from something (their job) and not thinking about what they want to do when they retire.

If you’re working toward early retirement, it’s important to remember that you need to be working not just to get away from something, but toward something. Don’t view early retirement simply as a way to get out of working the 9-to-5, but get it firmly planted in your mind that your goal of retiring early is to work toward something else. Then figure out what that “something else” is.

A Lack of Purpose

Early retirees often dream of a life spent doing whatever they want. They think of traveling to exotic places, and wining and dining with friends without a care in the world.

If that’s your dream early retirement life go for it. However, you’ll likely find that the excitement of traveling the world will eventually wear off and you’ll find yourself needing something more: a purpose in life.

People thrive when they have a reason to exist that reaches outside of their own desires. As an early retiree, there are many ways you can find purpose in your life.

Maybe you have a desire to work with those struggling in third world countries, or to help underprivileged teens have a chance at a successful life.

Take the causes that motivate you to action and find ways to help make the world a better place, so that you can live a life of purpose and not just a life of pleasure.

Declining Physical Health

Being able to spend your days doing what you want to do makes it easier to lay around on the couch and consume chips and soda as you peruse the last several seasons of House of Cards.

Don’t let early retirement lead you down a path toward declining health. Now that you don’t have to work, you want to make sure your years as an early retiree will be as plentiful as possible!

The great thing about having your days and evenings free to do what you want is that the early retiree’s schedule makes it easier than ever to take care of your health. You’re no longer stuck having to hit the drive-thru for a burger and fries in the ten minutes of free time you have at work. Instead, you can make a hobby out of shopping local farmers markets for fresh veggies and experimenting in the kitchen, or finding new ways to enjoy your favorite home grown foods.

To stay active, you can look for others who want to form a running, hiking, biking or walking group and make new friends as you care for your cardiovascular health.

Or maybe it’s time to start training for that triathlon you’ve always talked about doing.

The most valuable thing that early retirement can buy you is freedom. It’s your job to use that freedom to combat the potential dangers of early retirement and make your life line up with the vision you had as you worked toward financial independence.

You’ve worked hard to get to the place where you can retire early; now make sure that early retirement is as fulfilling and gratifying as you dreamed it would be.

Readers – What do you feel will be the most challenging part of life after financial independence?  What steps can we take now to ensure we don’t fall into the dangers of early retirement and make the most of our well-earned time?

About the Author

Deacon Hayes is a Financial Expert who is best known for paying off $52,000 in consumer debt in 18 months. Through his company Well Kept Wallet, he has helped thousands of people develop a financial game plan so they can achieve their financial goals in life. He has been featured in the US News & World Report, MSN Money, Yahoo Finance and more.

Images courtesy of Flickr, Flickr