Longing for Early Retirement? Planning to work longer could be the answer.

If you are in a very stressful and demanding role, or perhaps a job that doesn’t really excite you, the lure of early retirement is tempting, but is that really the best answer?

One way some people try to approach an unhappy work life is by running even faster in the present. Making more money, saving more money, desperately trying to stash enough cash to enable them to come to a complete stop earlier.  Now as a financial planner I’m not against earning more income and I’m all for saving too, but alarm bells start to ring when one of my clients is passionately looking to get out of the workforce extra early.

So I stop…. and ask the question…

‘Why?’

Drivers for early retirement

As a general rule there are three main reasons people want to leave the workforce early.

  1. They feel trapped – their job is so demanding, relentless, stressful, dispiriting or just plain dull that they just cannot wait to get out of there;
  2. They feel threatened – that the choice to continue to work will be out of their own hands due to redundancy, health, changing workplaces;
  3. They are yearning – for the life they want to lead but can’t.

Now I’m a pragmatist at heart, I know that there are times you persist with a job because you have to: it pays the bills; it gets you through. However, I also know that sometimes you need to question whether what you are doing is really the best alternative.

Change the Early Retirement question

With that in mind, maybe the question surrounding retirement shouldn’t so much be “What can I do to be able to leave the workforce early?”, but rather it should be “What can I do to make working more enjoyable in the long-term?”.

Here are some thoughts on how to approach your retirement years in different ways.

Should I stay or should I go now?

This is an obvious question, but sometimes one that we can’t see when we are in the thick of things. Take some time to discuss with your loved ones whether your employment is taking an undue toll on you. Think about whether life and work could be that much more bearable in another organisation or in another career. This doesn’t necessarily mean you need to hand in your notice today, but sometimes making a resolution to change something, and setting some wheels in motion can be the reset that you need. The process of planning a change can be invigorating in itself. Returning to study, meeting new people and a changing our surroundings can be a great way to get a fresh perspective on what we think we know of work.

The Golden Handcuffs

Change can be particularly difficult if you know you are on a good wicket with a company; for instance if the pay rate is very good or there is flexibility that you can’t get elsewhere. I call these the ‘golden handcuffs’, because the job comes with clear benefits, but you are often subtly forced to ‘let things slide’ when it comes to your actual desires for fear of losing those benefits. They are times when you need to move, but sometimes the status quo is the better option. Thinking out the pros and cons and defining the trade-off you are making can help make the situation more bearable, because then it becomes your choice to stay, rather than the only option available.

Enriching your life

Another thing to think about is whether you are yearning for something you don’t have now. In the grind of our day-to-day work lives, it can be hard to go get the things that make our lives enjoyable. Take some time to think about ways that you can pursue those needs now rather than waiting until the day you retire. Are there ways that you can accommodate your desire for travel, creativity, fitness, stillness in the here and now? If you can, this may allow you to enjoy the present rather than just working for the future.

Satisfying ways to extend your working life

Rather than thinking about early retirement, you could start to think about extending your planned working life, but in a different capacity. Think about your passions, and how you might be able to prepare yourself for work that is more enjoyable and sustainable into a partial retirement.  Research tells us that the happiest retirees are those who keep working in some capacity, because the continuation of purposeful activity is one of the biggest factors in continuing to support your self-worth and your identity. It also promotes your ongoing engagement with the community after retirement.

We recently had a client with whom we explored the desire for an early retirement. When we talked it through, we discovered that while her day-job was in management, at heart she was a musician. In the past she had seen this as being an optional leisure activity that was a drain on her time and money that she didn’t think she could afford to return to. Now we didn’t suggest that she hand in her notice and hit the road doing gigs full-time, but we helped her think about music as a perfect opportunity to combine her skills and passion. By thinking about her pastime as both a hobby and a form of employment, it gave her a sense of self-permission to enjoy this pursuit, and it means that she is happy to work for a bit longer. Putting in some time and effort now gets her involved in the music scene, and over time it may allow her to supplement her income. Down the track she might be able to cut back on her day job and supplement her income with some music tutoring. The cherry on the top is that just the act of becoming more involved in the creative arts connects her to a broader community and gives her a sense of enrichment in the here and now meaning the idea of working through to pension age seem much more bearable.

Start early to stay longer

Instead of leaving these sorts of thoughts until the day before you retire, you can start to make initial preparations now for a richer, longer working life.

  • For some people it may be thinking about a hobby that they have that is not only enjoyable but has a potential financial outcome.
  • It may be a cause that you can become involved in that you can contribute to and build skills doing which may also provide a casual employment in your later years.
  • Perhaps it is a business that you can start and grow over time.

By all means plan for your early retirement, but perhaps think about whether there are other things that might contribute to your current and future happiness now as well as the years to come.

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