Ask anyone who’s spent a moderate number of years toiling behind a desk in an obscure corner of a large corporation about what they’d do if they won the lottery, and the first answer invariably is the same. Resign from this job and dedicate the years to a life of riches, idleness, and joy. Early retirement is the dream of every employee no matter where they stand on the corporate ladder.
But is leaving your working days behind before you reach 60 the right choice for you? Is a life of leisure cushioned with a fat saving-portfolio your ultimate goal? Daniel Orfin, the founder of Daniel Orfin & Associates, believes that when it comes to early retirement, there are trade-offs to be considered. You might be tempted with a carefree life of relaxation, but there’s an undeniable downside to it as well. So before making a hasty decision let’s go through the pros and cons together.
The Pros of Early Retirement
Get a Fresh Start in Life
While writing your resignation letter might give you an immense amount of satisfaction, it doesn’t mean that you’ll be swearing off work altogether. Many retirees relish the prospect of working through their retirement. Only this time the work is something that they’re passionate about and enjoy. Early retirement creates a unique opportunity to leave your boring job behind and find fulfillment in another endeavor of your choosing. And it doesn’t have to be a job. You might be passionate about painting or music and decide to dedicate the rest of your life to becoming the artist you’ve always wanted to be.
Invest in Family and Relationships
So now you’ve quit the rat race and found a financial expert to eliminate as much confusion as possible in planning your financial future. That is great because now you have all the time in the world to cultivate personal relationships and get closer to your family. You can watch your children grow and be more involved in their lives. Your spouse too will appreciate all the time and attention you lavish on them.
Travel the World (or just around the Country)
When you think of retirement, the first thing that comes to mind is travel. You’re financially comfortable enough to travel and see new places and cultures. You’re also still young, relatively speaking, and in good health, the two prerequisites to enjoying exotic places. In other words, you can fill your life with adventure and go paragliding or horse riding across the lush meadows.
The Cons of Early Retirement
Retirement Takes a Toll on your Health
Daniel Orfin & Associates hold educational seminars that offer strategies to feel good about preparing for retirement. And one of the things these seminars warn about is the impact of retirement on your health. A life of idleness affects your mental health and mobility. You won’t be as active as before and a sedentary lifestyle raises the risk of a heart attack and stroke. So, you’d need to maintain an active life and exercise regularly to stay healthy and full of vigor.
You’ll Need to be Frugal
Without a huge inheritance or a cushy hedge fund to keep you solvent, your life after retirement will be a series of downsizing decisions and living as frugally as you can. According to the financial planner Daniel Orfin & Associates, retiring at the age of 45 means your income will drop down by about 85 percent. And since your expenses don’t decline after you retire, you’ll have to come up with creative ways to make your savings last longer.
That Overriding Sense of Boredom
Even with all the traveling and time spent with family and loved ones, general boredom is one of the drawbacks of early retirement. It’s usually tough especially in the early days of retirement to make that transition. Being comfortable with your retirement strategies is one of the things you learn at Daniel Orfin & Associates. After all, with all this free time on your hands, and without proper planning and a sound strategy, you’ll start to miss that job that you just left.
If you believe that an early retirement is the right choice for yourself, contact a professional such as Daniel Orfin & Associates to help you map out a plan to let your money carry you for the rest of your life.