Nobody wants to work their entire life. A nice and comfortable retirement is the American dream. And for some of you, who are financially savvy, early retirement is a possibility.
For those of you who plan to retire as early as 30-35 years old, having a significant amount of retirement funds is a must. And if you do have this money covered, you should be smart enough to figure out that the total amount is enough for your lifestyle for the next 40-50 years before you quit your job.
Now, here is the question, is it retiring too early really that nice? There are drawbacks that could be overlooked. Read on:
1. Lifestyle Changes Overtime
As a young retiree, you still have a LONG way to go. You may have done your due diligence, and be as accurate as possible with how much money you would need for the next 30-40 years. However, your lifestyle could change easily. Depending on where you live, especially in urban areas, you might easily get influenced to follow the trend. Those changes will cost you money. For example, you car. At 35 years old with a couple million dollar in retirement funds, you probably not wanting to drive old vehicle (may not apply to everyone, but for the most part, I think it is true).
What to do? Streamline your lifestyle. Put on some “guardrails”. If you can steady your lifestyle for the next 30-40 years, your retirement funds will be enough because you estimated how much money you need based on your current lifestyle.
2.Things Happen In Life
Retiring at such a young age has its own risk. Anything can happen in life. In this case, you have a span of at least 30-40 years that anything can hit you hard. For example, accidents, health problems, and more. These things can dry out your retirement funds quickly. Now, what if you were still in the workforce? At minimum, you would still have an income and your health insurance is covered by your employer.
What to do? Retiring too early comes with a higher risks. If you have a a large amount dollars in your retirement nest eggs, you probably better off retiring at 50 years old. It is still way early than the average Americans and you are taking less risk.
At age 35, you are still in your prime time to be in the workforce. There are many opportunities out there that you can take to further increase your financial position. Or you don’t care about finances because you are so well-off, the opportunities could take you further in knowledge and experiences. You might need these in the future. Who knows.!
What to do? If you really don’t want to be “locked” in a full time position, try freelancing. Work on your own time. This way, you would still utilize your skills, learn new things, and best of all, you are padding your retirement with some extra cash to spend.
4.You Probably Get Bored
Think about it. Your friends and family are probably not as lucky as you. They would probably still in the workforce trying to retire like you. Although you now have the time in the world to do whatever you want to do, in a short time, you would probably start wondering what else to do.
This last point is probably not for everyone. But, for me personally, I would get bored easily if I have to do things and go anywhere by myself. If this is not your character, and you would rather go on your own, then so be it. Super early retirement is for you.
Lastly, I am not saying that you should not retire too early, but as I was evaluating the above, I am convinced that you should re-evaluate your decision to retire at such a young age. There are many moving parts that we don’t know. Nobody can predict the future. The worst part is, if you estimated 30-40 years of retirement funds at age 35, what if you still alive until 90-100 years old? You will be way off.
My take is, if I can retire at 35, I would leave my full time job and work on something that is much more flexible. Earning extra cash on the side helps with the cash flow, and also help my brain to keep spinning! It is far healthier this way.