Even when one has the resources to retire, it may not always be the best choice. I know several people who are financially independent and who have tried to retire, but they get bored and feel compelled to go back to work. And of course there are the serial entrepreneurs who may be able to retire after selling a business or two, but simply can’t help but start another business.
So if you are financially able to retire early, how do you decide if you are ready? I’ve come up with some questions you can ask yourself to gauge your readiness.
1. Am I unhappy at work?
This should be one of the easiest questions to answer. If you no longer enjoy your job, if you are more negative at work, if you can’t keep up with your workload anymore, or if you don’t sleep well at night, these could be signs that you are getting burned out. Sometimes a vacation can fix this. However, if you think you are no longer able to give your best at work, then maybe it’s time to step away for good.
For me, the answer was definitely yes. I adored my coworkers and I was good at my job, but my workload continued to increase and it became more and more difficult to keep up. For me, it was definitely time to stop working. I didn’t want another job.
2. Is the problem THIS job or is it any job?
Maybe your job is insanely boring. Maybe you don’t get along with your co-workers. Or maybe you have the workload of two people. Whatever the reason you don’t like your job, perhaps another job would fix the problem. If you want to continue working, maybe it’s time to look for a new position.
Being financially independent could allow you to take a job that might be more interesting, even if it pays less than your current position. A former roommate of mine was tired of working for big companies and wanted to concentrate on photography. Because he had saved so diligently, he was able to buy a condo, quit his job, and work as a photographer for a small local paper. Doing what he loved was more important to him than the size of his paycheck.
3. Do I Want to Have an Income Stream?
Even if you don’t need an income stream, perhaps you want one. It’s nice to have enough to cover your monthly expenses without dipping into your nest egg right away. You don’t have to keep working full-time. If your job is one that could be part-time, talk to your boss about a change. You could also try selling on eBay or Etsy. There are a lot of ways to earn a modest income without working 40 hours a week (or more).
I definitely didn’t intend to go back to work, but when the person hired to replace me left after less than a year, I agreed to work remotely for a while they searched for a new person. I’ll be working part time for at least another couple months to help train the new person and ease the workload a bit. Although it’s not what I planned, it has been covering our monthly rent and health insurance premium, so there’s money we don’t have to spend from our savings.
4. What am I retiring toward?
It’s not enough to want to escape your job. You have to have something that is important to you in your retirement. If you have a mile-long list of things you want to do when you have the time, then you may want to start looking seriously at early retirement. If you don’t have hobbies or interests to keep you busy, there’s not a lot of reason to retire. But if you find work is getting in the way of your fun, then go for it!
I find myself just as busy, if not more so, now that I’m retired. For starters, I’ve finished the first draft of a novel and I create this blog. I’ve been working on my health and going to the gym every day. While I’m working part time, I am really noticing losing that four hours or so a day to work on my projects. As happy as I am to help out my work buddies, I am looking forward to re-retiring!
5. Am I on the same page as my spouse?
If you and your significant other have different ideas about retirement, then you may be in for conflict. Some things to think about are whether you both want to travel, how much money you need to retire early, and what kind of budget you will have in retirement. Does one of you want to keep working for a while?
Luckily, Stephen and I were in agreement on most issues, and we worked out the rest before we decided to retire. Although I am anxious to have a new home base, I agreed to take a couple years to try out a few different cities so we could find one that is right for us. If I had insisted on buying a condo right away, we could have ended up unhappy in our new home. For me, it’s worth the wait to find a great place to live. Most issues can be worked out if you are honest with each other during the planning stage.
A lot of people think they want to retire the moment they are financially able, but money definitely isn’t the only consideration. While you are diligently saving for retirement, you should also spend a fair amount of time thinking about whether early retirement is the right choice for you.