Think you have some good reasons to Retire early? It is exciting…the thought of leaving your career and setting aside the accompanying stress that it produces. In fact, you may already have begun to plan how you might be able to do that 10 or 20 years before your retirement benefits are available.

It’s a lofty goal to retire early. But it’s a decision you must be sure about. You can’t just wave a magic wand to make it happen.  It takes planning and deep consideration of all the financial and emotional reasons to retire early before you pull the trigger.

To that end, it would be wise to consider the following issues as they relate to early retirement. You may find after working through them that you want to hold onto that career for a few more years.

Money Considerations Before You Retire Early

If you are going to retire early, there are several money related issues to consider. They deal with your net worth, your hopes for future employment and maybe the biggest of all issues for retirees – healthcare.

1. The size of your nest egg

How much money are you going to need to retire? No other issue deserves more consideration than this one. That is because, depending at what early age you want to retire, you could have 40-50 years left to live. Will your current nest egg fund all that you will need for that length of time?

To start answering that question, you need to determine what will be your style of living.

It would be logical to conclude that expenditures would decrease during retirement. With no kids in the house, a mortgage that is hopefully paid off and reduced expenses for transportation, it should be entirely reasonable to spend less in the retirement years. However, other expenditures could easily take the place of those and you might find yourself spending more, not less.

Do you plan to travel extensively? What expensive hobbies are you going to take up? Will you be taking frequent trips to visit the grandchildren? Do you want to move into that upscale retirement community? Will you be eating out more?

It could be tempting to live it up. After all, isn’t this what you’ve worked your whole life for – to be free to enjoy some pleasures you couldn’t before?

There is no right answer as to how to live our life during retirement. It’s your choice. But you need to make sure that whatever money you’ve accumulated, plus what you might be drawing in through Social Security, investment dividend checks, or a part-time job will be enough to cover that lifestyle.

If not, you will have to cut the lifestyle back or work for a few more years to lessen the distance between retirement and your death.

2. Health Care Costs

Health care is becoming an enormous issue that cannot be ignored. The future of health care costs seems to be going nowhere but up.

Couple the rising cost of healthcare with the positive development that life expectancy is increasing. The average life expectancy in the U.S. has almost reached 80 years of age. My grandfather just celebrated his 105th birthday this past February. He’s been retired for 35 years. That’s a long time frame to cover the increased medical costs that will come as the body ages.

If you plan to retire early, say at age 50, you could be looking at 30-50 years of healthcare costs to cover. How will you do that? You will no longer have access to your employer’s healthcare plan. So you will have to be prepared to cover the cost of that in some other way.

3. Being Rehired

Being rehired at an older age is becoming increasingly difficult. This study from the Urban Institute states that workers in their 50s were nearly 20% less likely to be rehired than workers in the 25-34 range.

This is due to many factors. Employers may see you as not being up to date with technology. They may think an older worker is more difficult to train, will cost more in salary and benefits or may have declining health issues that will impact performance. Clearly this isn’t happening in all cases but it is a factor to consider.

Some people see older workers not being rehired because of their age as age discrimination. This would be very difficult to prove unless an employer came right out and told you that was the reason. In most cases, you wouldn’t know the real reason you hadn’t been hired.

There are jobs to find for older workers. But it may be difficult to reenter the specific career you had before. So if you think there might be a chance you’d need to work again, it might be best to just keep working now in the field you are trained in.

Emotional Considerations Before You Retire Early

There is more than just money to worry about when analyzing reasons to retire early. These three emotional/personal matters need to be considered.

4. Loss of connection with people

We build our social interactions in three main ways – family and friends, our work setting and through social organizations (i.e. church, clubs, school, etc.). If we quit our job to retire early, we will lose 1/3 of our potential daily interaction with people. That presents a potential gaping hole in your social life.

So ask yourself, “How will you fill the void?” Do you have enough of a support system in place to compensate for your social needs?

You might be thinking, “Well, I don’t like the people I work with. I’ll be glad to leave them behind.” While that may be true and a potential relief, you will still be losing connection to people who might have been able to help you out from time to time. There is something built into our DNA that drives us to have relationships and the work setting is prime place for those connections.

I experienced this first hand when I took some time off to be a stay at home dad. Even though I thoroughly enjoyed it, there was a disconnected from the people I’d built relationships with at work. Athletes experience this all the time. That’s the one thing they say they miss most about the game – being around their teammates.

So think about whether you want to lose that camaraderie and connection with people at an earlier age. You can still be connected with people in other ways after retirement. It will simply take more effort and intentionality because one natural way it happened before – through your work – is gone.

5. Filling the competitive void

Everyone has a competitive side. Some have it more than others. It’s what pushes us to excel. It drives us to accomplish great things. It’s what gets us frustrated when we lose a simple board game.

We have this innate, strong desire to be more successful than others or at the very least to be excellent ourselves in what we do. For the entrepreneur, a competitive spirit helps them best other businesses. For the mid-level manager, their ambitious nature helps them get noticed by their superior. And for the CEO, it’s a main factor in seeing his or her business rise to the top.

Again I turn to retired athletes who have been competing all their lives. What do we find them engaging in post-retirement? Business ventures. Golf. Broadcasting. Even gambling. They are attracted to activities that fuel their competitive juices and keep them around that type of environment. They can’t let it go because it’s all they’ve known.

So what’s going to drive you for the next 20-30 years when you step away from your career early? Will your competitive spirit die because you are not engaged in something purposeful? Will you be OK with that?

6. Boredom

Boredom? “Why is this on the list?” you might ask. “Won’t I have time to do all the things I never could do when I was working.”

That’s true. But how much tinkering can you really do around the house? How much TV can you absorb before it just becomes noise? How many vacations can you take before even those seem mundane?

The issue here is to live intentionally. Don’t retire early to simply “get away from work.” Have a plan and be moving towards something. Have a target to shoot for that will have real meaning for your life.

When I quit my job for a time to be a stay at home dad, this is the approach I took. I lived my life each day with the focus of taking care of the household responsibilities. I had specific targets I was moving towards that kept me alert and aware of my purpose for that time period of my life.

If I didn’t have that, I’d be pursuing one activity after another. Eventually I would have found myself tired with all of it.

Is Early Retirement For Me?

Early retirement is not for everyone. If you can pull it off great! That means you are financially stable, have a good support system and have thought through what direction your life will head next.

However, without those factors in place, it would probably be better to continue working. That may be frustrating and not what you want. However, it’s a better scenario than being broke and directionless.

Questions for Discussion: Are you considering retiring early? What do you have to do to make that happen? Does work bring out the competitive nature in you? How would you fill the social void left from leaving your job? What other reasons to retire early are important to consider?

Image by rawpixel.com at Shutterstock.com

The post 6 Financial and Emotional Considerations Before You Retire Early appeared first on Luke1428.