The Biggest Problem with Early Retirement

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The biggest problem with early retirement

Early Retirement – mmm…  I bet early retirement sounds really good to many of you who are reading this from a cubicle at work. I have been happily unemployed for over 9 years now and I love it. Early retirement is awesome, but I do miss the regular paychecks occasionally. Our household income dropped significantly when I retired, but we were prepared for it. Fortunately, we are doing quite well financially today due to the stock market. However, finance is just part of the equation for a happy early retirement. We need to prepare for other problems too. Today, I want to talk about what to do with your time after early retirement.

(Updated 2021) I originally wrote this post in 2013. I’m updating this to link to LAF’s early retirement epic fail. I wrote about this last time. Unfortunately, it seems retiring to a leisurely lifestyle is a recipe for disaster when you’re young. You really need some long-term projects to keep you occupied. They’ll give you some purpose.

The biggest problem after early retirement

IMO, the biggest problem after early retirement is the lack of long-term goals. Typically, we have many long-term structured goals from a young age. We are expected to go to school, attend college, and progress on a career ladder until retirement. Here is the typical progression of a middle-class white-collar worker.

  • Grade School
  • Junior High School
  • High School
  • College degree
  • Graduate degree
  • Entry level office job
  • Get raises and promotions
  • Get more education and training
  • Become a manager or senior level worker
  • Make more and spend more so everyone knows you’re successful
  • Retire at 65

Most people are happy with the structure. Everyone wants to fit in and be normal. I bought into the message for many years. When I was working, I tried hard to complete every project well so I can earn raises and promotions. This worked for a while, but I became stressed out and discontented. Eventually, I decided to retire from my engineering career early and go my own way. I jumped off the treadmill and my life became totally unstructured. I have a lot more autonomy now and I march to my own beat.

The transition to an unstructured lifestyle was abrupt. It can be difficult if you don’t prepare. Many retirees are unsatisfied with the leisurely lifestyle and actually become depressed. The lack of direction coupled with long empty hours wears many people down after a few years. This problem is magnified when you retire early. You’re young and have a lot of energy. You’re used to making progress every year. Living a leisurely life is stagnating. This is fine when you’re 65, but younger folks will be very unhappy with stagnation.

Where do you see yourself in 5 years?

One career developmental question that is frequently asked is, ‘Where do you see yourself 5 years from now?’ As much as I dislike this question, it gets you to consider your long-term goals and what you would like to accomplish. This question applies to early retirees just as much as anyone. You need to have some long-term goals to keep you busy. If your answer is sitting around watching TV or sipping umbrella drinks on the beach, then I think you’ll be bored out of your mind after two or three years. You need to make progress so you don’t feel bad about yourself.

Fortunately, I did my homework and knew about this problem early on. I lined up a couple of big projects before I quit my job. These projects are still keeping me busy and engaged after 9 years. Here they are.

  • Raising a kid – Being a happy stay at home dad is a full time job. My long term goal is to help Baby RB40 succeed in school and get into a good college. He is already a free thinker, so I want to channel his energy into being a good citizen and possibly being more entrepreneurial than I was. This is up to him, of course. This will keep me busy for the next 15 years. For the short term, I’m just trying to encourage him to read more. Once he starts grade school, I should have more time for more projects.
  • Blog – Blogging has basically grown into a half time job. Blogging is taking up a lot of time, but it is a lot of fun as well. The long term goal for Retire By 40 is to build an audience while also being helpful and relevant for early retirees. Many bloggers get burned out and I want to avoid that at all costs. Of course, a little more income wouldn’t hurt.

I was working on these things for a few years before I retired from my career and I urge everyone to do something similar. These current projects will eventually require less time and I will find other long-term projects to take on. Being financially independent is awesome, but you also need to figure out what to do with your time as well.

2021 update

  • SAHD – Life got much easier after RB40Jr started school. Now, being a SAHD is like an easy part-time job. He spends a lot of time in school and doesn’t need a lot of supervision when he’s at home. I am the assistant coach on his soccer team so that takes about 4-5 hours per week. This is recreational time, though. Anyway, we passed the halfway point for this project. He’ll go off to college in no time.
  • Blog – I started Retire by 40 in 2010. The first 7 years, I spent 20-30 hours per week on this project. Now, I spend about half of that time. Fortunately, I still enjoy blogging and I make some money online from this project. Hopefully, I can continue blogging until I’m ready for full retirement, probably around 60.
  • Side hustle – Over the last few years, I’ve been picking up some side gigs. Currently, I charge scooters to earn a little income. I spend anywhere from 10-20 hours per week on this side gig. The great thing about this side hustle is that I get to exercise too. I like making money because a little active income goes a long way in early retirement. Net worth is a great way to mark your progress in life. Even if you’re retired, growing your net worth makes you feel good. That is as long as the work isn’t too demanding.
  • Parents – My mom has dementia and my dad is taking care of her. He’s getting older too so it’s getting harder every day. Last year, I spent 6 weeks in Thailand to help out as much as I could. From now on, I plan to spend 3 months per year there to help out. This time commitment will probably keep growing.

Today, I spend less time on blogging and being a SAHD. But other things came in to fill up the extra time. I don’t have time to be bored and discontent. That’s the key to having a happy retirement.

The key to a successful early retirement

If you find yourself bored or depressed in retirement, then you probably need to find a few long-term projects to immerse yourself in. The good thing about retirement is that you will have plenty of time to figure it out.

You can

  • Pursue artistic interests like painting, pottery, or photography.
  • Help others by finding a cause that you care about and volunteer.
  • Get involved in your community or join a movement.
  • Get in touch with your spiritual side.
  • Try working for yourself to build the business that you always dreamed about.
  • Keep building wealth though investing and/or side hustling. Let’s face it. Money is an easy way to keep score.

Life is long. You’ll have plenty of time to relax by the pool when you’re 65. If you retire early, you really need to have a few long-term projects to keep you busy. That’s the key to a happy early retirement, IMO. Humans are happiest when we are making progress. Don’t take that away when you retire, early or not. 

What about you?  Do you have any long-term goals for after retirement? You really need to set some goals if you don’t.

*I invest in real estate across the United States with CrowdStreet to generate passive income. This is a great way to diversify your investment. There are many interesting commercial projects available so sign up for a free account and check them out!

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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