Is Early Retirement all it’s cracked up to be?

I was having a coffee recently with a prospective client and told him a story of an existing client of ours who took early retirement at 50, having done the Metis LifePlan. His immediate response was “he’s made a huge mistake”.

I was taken aback by this. I mean, who doesn’t want to retire early?

It certainly got me thinking more and more about what retirement means and, moreover, what it means to many of the families I work with.

Now I I’ll never change my opinion that financial independence is always a good idea and the sooner you get there the better. But for some people, retiring may be a terrible idea. Look at Warren Buffet (92) and Charlie Munger (99), the Chairman and Vice Chairman of Berkshire Hathaway. They’re both still working, both still adding value. I think each of them would say that their work has kept them healthy and engaged all these years.

So, what do you need to be aware of if you are thinking about retiring early and how can you prepare yourself for the “Third Act” as it were?

A sense of purpose

Retiring early may seem like a tempting prospect, but it can be a struggle for those who derive their sense of purpose and identity from their work. Having a sense of purpose is critical for most people’s mental health and well-being.

Many business owners, entrepreneurs, and professionals have dedicated their lives to their work and built their identities around their careers. Retirement can rob them of that purpose and leave them feeling lost, unfulfilled, and even depressed. For these individuals, their work is not just a job, but a passion and a calling.

They’ve invested their time, energy, and resources into building their businesses and careers, and leaving it all behind can be a difficult adjustment. The loss of their identity and purpose can be a devastating blow. This was something discussed at length by many of our speakers at last year’s Future You event.

While some may enjoy the newfound freedom and flexibility of retirement, others may find themselves struggling to fill the void left by their careers.

You’ll spend years counting down to your retirement date, but if you don’t plan for what happens next, you’re likely to wake up on day one of retirement thinking, “Oh goodness, I have no idea what to do with myself”.

So, what should you be doing to get yourself ready for this transition?

Preparing for retirement is not just about financial planning; it’s also about mental preparation. That’s why we place so much emphasis on your retirement plans and asking “what is the money for?”. How you’ll fill your time in retirement is just as important as how you’ll get there.

Here are some suggestions for preparing yourself mentally for retirement:
 
 

1. Identify your passions and interests

Retirement can provide you with the opportunity to pursue your hobbies and interests that you may not have had time for before.

Take some time to explore your passions. Then, think about how you can incorporate them into your retirement plans before making the leap (you’d surprised how many people get bored of playing golf after a few months).

Whether it’s volunteering, traveling, or taking up a new hobby, having something to look forward to can help you maintain a sense of purpose and fulfilment.

2. Stay connected

Retiring early can lead to boredom, loneliness, and isolation. Without the daily interactions with colleagues and the mental stimulation of work, retirees can become stagnant and unproductive.

Maintaining social connections is critical for our mental health and well-being, especially during retirement. Make an effort to stay in touch with colleagues, friends, and family members. Join clubs or organisations that align with your interests and hobbies.

Volunteering is also an excellent way to meet new people and give back to the community.

3. Create a routine

Retirement can be a significant change from your daily work routine. Work provides us with structure, social connections, and a sense of accomplishment. Retiring early without having fully prepared for this transition can disrupt these vital components of our lives and leave us feeling aimless and disconnected.

Creating a new routine can help you stay organised, productive, and engaged. Plan out your days and weeks, including activities that bring you joy and fulfilment. This could be anything from exercise to reading to spending time with loved ones.

4. Take care of your health

Retirement provides you with more time to focus on your physical and mental health. Make sure to prioritise regular exercise, healthy eating habits, and getting enough rest.

Consider taking up activities that promote mindfulness and relaxation, such as yoga or meditation. Even better if you can combine this with point #2 and make it a social activity!

5. Work/Life Balance

Maybe you will conclude that retirement isn’t for you. Maybe what you actually wanted was just a better work/life balance.

If you’re post-retirement when you come to this conclusion, there are plenty of options for returning to work in a part-time or consultancy capacity, or else turning your hand to mentoring.

If you’re pre-retirement and have realised that you simply want a better balance, sit down and reflect on what the most rewarding part of your job is. Then, figure out a way to focus as much of your attention as you can on this. Could you consider partial retirement? Delegating tasks? There are many options available to make this possible.

What’s next?

Preparing yourself mentally for retirement is just as important as financial planning. Taking the time to identify your passions, staying connected, creating a routine, and taking care of your health can help ensure a smooth transition into retirement.

By approaching retirement with a positive mindset and a plan for your newfound free time, you can continue to lead a fulfilling and meaningful life.

If you’d like to discuss your situation and your plans for your future in retirement, please don’t hesitate to give us a call on 01 908 1500 or email us at info@metisireland.ie.

Cian Callaghan
Private Client Manager