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Contemplating Early Retirement?

early retirement

In recent years the concept of early retirement has gained tremendous popularity, and it doesn’t seem to be slowing down. This idea of having a large nest egg to retire as early as possible can be alluring in offering freedom to pursue things that might seem more fulfilling than a career. Retiring early can be both a great aspiration as well as a path fraught with pitfalls.

Retirement in and of itself isn’t a very biblical concept. It’s only really mentioned for Levitical priests, who were to retire at the age of 50. For the rest of us, it was presumed we’d keep on keeping on at working until our kids would take over the family business and support us in our old age.

I also think of the parable of the man who had riches and tore down his barns to build bigger ones to store it all, telling himself “You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.” It seemed like a good plan, but God had some other thoughts.

In my experience as an advisor, I’ve seen folks enter into retirement and it be everything they had hoped for. I’ve also watched clients flounder and take years to try to figure out their new identity and rhythms of life. We’ve gleaned a few things from conversations and observations and wanted to share a few insights that might help you process retirement for yourself.

Keys to Successful Retirement

Retire Towards Something – One of the most important things about retirement (whether it’s early or late) is to retire towards something, not just retire away from working. Being financially independent can unlock new opportunities, whether that’s pouring into your family, friendships, church, community, etc. It can take the form of teaching, mentoring, volunteering, missions work, writing – the sky’s the limit! But be intentional with your time and talents; we weren’t meant to take our light and hide it under a bushel, or to bury our talent in the ground. You likely won’t have this totally nailed down by the time you retire from your career, but it’s important to have an idea of the things you’d like to try out and pursue in the next season.

Take Advantage of Relative Youth – While we’re not advocating for a life of leisure, there is the reality that our bodies will deteriorate quicker than we’d like and there will be a window of opportunity to pursue more active things like adventure and travel. Sometimes we put these things off because of the fear of spending down our savings, and sometimes we just don’t make time for it.

So long as these aspirations are apart of your overall financial plan, there are no prizes for dying with a big of money and unpursued dreams. With that in mind, use your money well to see part of the world, visit old friends, and enjoy some of the fruits of your many years of labor.

Stay productive – Retirement doesn’t have to mean you’re useless to society. Many of our most satisfied retired clients are engaged in their church, volunteering with a non-profit, or have a part-time job at Home Depot just for the fun and fellowship of it. It could also mean taking up a hobby of woodworking, painting, or finding other talents that have been hidden behind the curtain of a career. God loves the idea of rest – it’s why He gave us the sabbath. But the day of rest is meant to be a break from being productive, not a full-time state.

Pitfalls of Early Retirement

Giving up Identity and Impact – Our careers should never define us, but often our identities can get wrapped up with them. It’s only natural after spending 40 hours a week for 30-40 years and then no longer having that thing to feel at a bit of a loss. It can create a bit of a void for us to deal with. It can also lead to sadness and depression, and a feeling of lostness.

The best way to deal with this is to both retire towards something and to stay productive. But be prepared to deal with feelings of loss and insecurity as it can be a normal part of the process.

Avoiding too much leisure – When we do have voids in our time and identity, we’re on average not very good at filling them well. A recent Wall Street Journal article details how much time is spent doing certain activities in retirement. Retirees on average spend 4.5 hours a day watching TV, and 6.25 hours on “relaxing and leisure”, compared to a half an hour or less of time spent reading, socializing, or exercising. The results are as you might guess – an unsatisfied and extremely unhealthy retirement.

Stress of Withdrawing from Savings – You’ve saved and accumulated for decades, all for the very purpose of having funds to spend during retirement. But there’s a real visceral challenge for some of us (I’m talking to you “savers”) in transitioning, often suddenly, from putting money into a savings account into pulling money out of the account. It just feels wrong. Couple that with a bear market like we’ve been in and it results in feelings of stress and anxiety. There’s nothing wrong with intentionally spending down investments and savings over time, but beware of the emotional challenges that can accompany this season.

Where to Find Direction

Ecclesiastes 3:1 reminds us that “For everything there is a season, and a time for every matter under heaven”. There is a time for work and time for rest, just as there is a time for planting and a time for harvesting.

Whether in our working years or in retirement, finding joy and purpose in what we do is a principle that transcends age. Early retirement can be a means to explore new passions, interests, and hobbies that bring fulfillment and satisfaction. Also, early retirement is a personal decision, and it varies from one individual to another.

The Gospel emphasizes the importance of seeking God’s guidance, finding contentment, serving others, being good stewards of our resources, and finding joy in all seasons of life. Whether you choose early retirement or continue working, let your decision be rooted in faith, guided by biblical principles, and motivated by a desire to advance His kingdom.