So you think you are ready for early retirement? The stuff of dreams for many and the reality for a fortunate few – including me.
But it’s interesting. The more blogs, forums etc I read about it the more themes emerge…
I see so many people heavily focused purely on the numbers. I get it, they’re a big part, obviously. Pretty much essential. But they aren’t the whole story by a long shot.
It seems to me, that many people start on the journey for financial independence – but not all finish. And largely, it’s not down to financial reasons.
Instead, it seems it’s that classic thing about dreams. The closer you get to achieving them, the more you often wonder if it is what you really want.
I’ve written before about how financial independence won’t be for everyone. It really isn’t all puppies and rainbows without any effort.
But there’s defn a few themes that other people, similar to my own experience, seem to have used to make it a successful transition (so far at least..!)
So – how do you know if you are ready for early retirement?
And more importantly – what can you do to help prepare for it?
Change...Good Or Bad?
Early retirement is undoubtedly a big change. Up there with the other biggies in life – both good and bad.
And that’s perhaps the most useful way to think about it. A big change. An opportunity. It will be what you make of it. No different to marriage – or divorce..
One person can view an impending divorce as an opportunity. A painful but necessary step. Learning and moving on. Hopeful for better things in their future.
Another can view the same divorce through entirely different eyes. Fearful of the change involved. Getting stuck in a blame narrative. Scared of what the future will bring.
Early retirement is similar in that it’s simply a big change
Neither good nor bad by itself – just different
And so how you feel about it will depend largely on what you think that change will mean for you.
If you’re a change freak, like me apparently, then you are probably excited about it. And you can ignore the rest of this…
But I see plenty of people who are more than well-prepared financially struggling to make that final leap. Unsure if this is what they really want after all, now that the opportunity is finally theirs for the taking.
Will I miss working?
Who am I without my job identity?
What will I do with my time?
How will my relationship cope?
If these kinds of questions sound even a little familiar – you are not alone!
The good news is I’m a big believer in that it’s possible – and necessary – to plan and prepare for these non-financial changes if you want to be ready for early retirement.
So let’s put the spreadsheets aside for a bit and take a deeper look…
Life Without Work
Let’s start with one of the big ones. Leaving work.
But before we dive in, can I just get something out of the way that apparently seems controversial.
When you obtain financial freedom – leaving work is a choice – not an obligation
I’ve seen many heated debates on if you are ‘really’ FIRE’d if you are still working. To be honest, I get genuinely confused why so many people care so much about what other people do. but I guess that’s just the way of the internet.
For my part – the whole point of financial freedom is in giving yourself that choice.
So if you reach your desired level of financial freedom and genuinely love your job – great, go with it!
Likewise, you want to try something different but it doesn’t pay well? Awesome – now you finally get to take a shot without needing it to work out financially.
But I also see a lot of people who stick with jobs or situations they aren’t exactly 100% sold on, despite no longer needing to earn the cash.
So what’s holding them back?
Who Am I Without Work?
I won’t lie – it was really (really…) odd the first time I actually said the words out loud to a stranger. Answering the inevitable question of “What do you do for a living”
I mean, I was only 43 at the time. So saying “Actually, I’m retired” is not the accepted response by a long stretch. Eh? You what?
It’s fascinating how much we define people by what they do for a living. Regardless of whether they love it or hate it.
So when you no longer have that social badge of easy acceptance – what’s it like?
What will you say? How do you neatly sum up who you are into a single sentence now?
The reality is, you don’t. But then, you never did. A job title is not who you are. It doesn’t represent everything about you now, does it??
Honestly, unless you’re at a work event, I found it was rare to talk about work much beyond the basic explanation of what that title meant. And watching people’s eyes glaze over…or ask if I could sort out their energy bill… ( Answer = no )
I know some people fret about losing the status of a title. Seen as an easy and quick way to impress people. Though I’d argue the kind of people impressed by a title aren’t the ones you want to be around…
So what actually happened when I first answered that dreaded question after leaving work?? It was really interesting. Some amazing responses. Genuine interest. Curiosity.
I honestly haven’t had a bad response as yet. To my face anyway. Some people are too polite to ask the obvious – er, how?? Most are simply curious as to what I do now “with all that time”
Which leads neatly onto exactly that – what do I do with all my time?
And more importantly – what will you do?
What Will I Do In Early Retirement?
It’s a common concern for anyone whos life has been dominated by work up to that point. When something takes up a large percentage of your waking days – it’s going to be a big change when it goes. Even if you hated it.
One thing most people agree on (hallelujah!) is that early retirement works better when you retire to something, rather than from something.
It’s not that different to the whole “attitude to change” thing we just went through. If you have a long list of things you want to try or do more of, then having more time is a huge positive.
If however you just know you don’t like what you are doing now but have no idea what you want to do instead. Well, then it’s going to be more of a struggle for you.
So, if you fall into that second camp – take some time to daydream about what you want to do instead. If you need some inspiration, two of my fav blogs in this area are Eric Barker and Mark Manson. Both non BS style, obviously.
But trust me, it’s worth it as it makes a huge difference when you come to actually doing it. And as anybody who’s had the patience to read our ‘About Us’ page will know we had a very long list indeed.
It was what kept us motivated through the tougher times. And what helped tip the balance into making that final jump, once we were comfortable with the numbers.
And since retiring early we have slowly started to work through them. But – and this is a big one – they didn’t just happen by themselves.
The early retirement of your dreams still needs you to make it happen
I can’t say this one strongly enough. That new life you want will not happen without you making it happen.
New Life, Old You
I always find it entertaining when I think I’ve come up with something – only to discover about a zillion people have already known for this for like, ever…
This one was no different. Apparently it’s called the difference between intrinsic and extrinsic motivation…
Basic summary is;
Extrinsic motivation = doing something because of a perceived reward (or avoidance of a threat)
Intrinsic motivation = doing something purely because you enjoy that activity
For example, most people wouldn’t continue to do their jobs without being paid – the most obvious extrinsic motivational carrot.
But once you no longer have a need for carrots (or whatever vegetable takes your fancy?!?) , then what happens?
That’s why I think developing your own intrinsic motivation is so important for a fulfilling early retirement.
If your ideal early retirement really is 12 hours of TV on the sofa, surrounded by snacks and beer (and hey, I’m not judging, honest!) then sure, this may not be for you.
But if you have plans for early retirement – figure out how and when you are going to make them happen.
Everybody has a different way of doing this. David, of IRetiredYoung fame, is particularly good with his annual tracker. It’s a pretty nice way of keeping track of non-financial goals alongside the financial ones.
It’s honestly a bit too organised for me though. And given a lot of ours were travel-based, at the moment it’s much more in the “what can we safely do” vs “what do we want to do” camp.
Regardless, it’s something you can practise whilst still working. Especially if you consider a more gradual change. My part-time career strategy paid off really well in this respect especially.
Because honestly, from my experience it makes a huge difference.
The more your current life is like the one you really want – but just time limited – the easier the transition to early retirement will be for you
This holds true for relationships as much as ‘stuff or things to do’.
Unless you are 100% happy hermit – again, no judgement here – ignore this one at your peril…
Early Retirement And Relationships
This one could, should and probably will be an entire post by itself one day.
It’s a whole different ball game spending the bulk of your time with your significant other/family
And it’s not going to be simple if you have different ideas on spending that time
Even when you spend your days on your FIRE journey wishing you had more time with them, the reality is everybody needs a certain level of space. Their own interests.
I’m not a relationship expert by any stretch of the imagination. All I can do here is share what has worked for us.
And so this will sound obvious but it’s a classic. The best ones usually are, right?
Talk about it before you do it
Then talk about it some more
S & I would spend many hours plotting out how we’d spend our time. Daydreaming of all the fun stuff we’d finally have time to do together.
When he decided he wanted to carry on working remotely for a while after I quit – it was a pretty big change to our original plan to quit together.
I understood his reasons though. I’ve always been happier to jump in feet first and figure it out. He’s way better at being cautious and making sure it won’t screw things up. It’s actually a really good balance for us.
But the point is we talked about it together. Worked out how we’d make sure it didn’t impact on our travel plans. (Go, digital nomad life-style!). A new solution was reached which worked for both us.
You have to be completely honest with each other though. No pretending just because you know it’s what the other person wants to hear. Or not listening because you don’t want to hear it.
It’s worth it if you want to enjoy this journey together.
But I know not everybody is like us. If you end up with a solution where you enjoy the bulk of your time apart – that’s still absolutely fine. If that’s what truly works best for both of you.
There’s no right or wrong way to retire early together
The crucial thing is to agree on how you both want it to be – before you do it
Simple, right….
As ever, this one will thrive on adapting. You learn what balance works for you. It’s all part of the fun of actually doing it, not just talking about it. And so to the big elephant in the room question….
You may be financially ready – but how do you know when you really are ready to retire early?
Reaching The Tipping Point
First up, it’s not unusual to be unsure. Being financially ready and emotionally ready are two very different things.
When you start out on your FIRE journey, it’s usually because your current situation isn’t exactly great. You want things to change.
You have a demanding, stressful job. Probably don’t get to spend enough time with your loved ones. Perhaps don’t enjoy what you do and you have a ton of things you would much prefer to be spending your time on. Sound familiar anyone?
As time passes though, usually things become easier. You start earning more. Life becomes more comfortable. It’s not necessarily everything you wanted – but it’s no longer as tough either.
Early retirement still sounds attractive but the risk associated with it has perversely increased
That original plan for Lean-FIRE and a shoe-string lifestyle no longer seems so appealing. Let’s add a few more years for something better.
Or, actually I really do need a McMansion ( thanks for the phrase Indeedably) . + 5 years please.
Sometimes it’s just the total fear of the unknown vs the ‘not great but ok’ knowns that hold us back.
And so the specific reasons may vary but essentially people will often stick with what’s known until one of two things happens;
1. The situation worsens, becoming painful enough to want to change. Overcoming the inertia.
2. The desire for time outside work increases. Often prompted by a growing recognition ‘time is running out’
There’s a pivot point when the risk involved with the change just seems ‘worth it’
One more year syndrome is famous in the world of FIRE for a good reason. It can take a lot for some people to make this jump.
But be it intuitive or calculated, people eventually reach a point they feel ready. They want the change.
By dealing with and preparing for some of the common fears and unknowns above, I’ve found you can make reaching this tipping point a whole lot easier on yourself
Minimising the chances of regret at not doing so earlier
Think of this kind of preparation as your ’emotional contingency fund’ if you like. Just don’t try and build a spreadsheet for it..
Learning from others who have made the jump helped me prepare for sure. It’s one of the main reasons why I blog now. Maybe my random scribbles can help someone else.
So if you have any other tips, advice or even fears about what’s coming – I’d be very curious to hear about them below.
Else – until next time all!
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I have to give you mad props Michelle, I have never seen FIRE compared to divorce before. Hahahaha. It never even crossed my mind but you actually are spot on in the comparison (not that I’ve ever experienced either – divorce or reaching FI).
I personally really enjoy these type of posts. There’s not a whole lot out there once people hit FI and what they’re up to. All your themes are spot on. Numbers are simple but people are complex. The job identity is a big one that I think most people overlook or underappreciate. I was out of work for a year and thought I was well grounded, but once that job was gone, it was a lot tougher then I had envisioned to adapt and understand who you were without it.
And great point touching on relationships. That’s another topic I don’t think people vet out as much as they should beforehand or even realize there needs to be ample room on both sides to allow for change and growth once they hit FI.
I also need to jump more into your backstory when I have time. Building your house to help you get to FI is intriguing to me. At least here in the states, building your own house is usually reserved only for the wealthy and would put you farther behind on a FI timeline. So I want to learn more about what you did.
Good stuff and looks like you’re having fun traveling. Enjoy that well deserved flexible time on your hands. =)
Ha, mad props, love it. Yeah, I’m never going to be accused of glamourising FIRE eh!
The job thing I think depends hugely on how you see it as part of your life. Cutting down to part-time before quitting was a big win for me. It’s much more like sliding into a different balance rather than all then nothing. Likewise you get used to spending more time with your family/partner. All good practice 😉
It’s funny about the house-building. Here, it depends hugely on how you do it. You can overspend wildly a la ‘Grand Designs’ very easily. I’ll write about it one day but roughly I think we ended up about 30% up investment-wise. Only really possible because of how much we did ourselves though. Worth it now & great memories but painful at times!
Cheers Q-FI, always love hearing your input.
How do you manage to write about the things I think of, but better? If it wasn’t so good, it would be kind of annoying!🤣 Seriously, lots of great advice and background information for people thinking about FIRE and wanting some guidance on how to make it successful. And thanks for the mention too😀
Ha ha – you are way too kind but I thank you anyway!
No worries – honestly, your blog is always what comes to my mind first as a brilliant example of how to make sure you don’t fall into the trap of “oh, there’s always next year….plenty of time yet”. So easy to do. And ofcourse, the fact it involves a spreadsheet is just plain awesome 🤣
There’s plenty of wisdom in this one, thanks Michelle.
One thing I’ve learned the hard way is we aren’t all static statues carved out of stone.
What we wanted (or thought we wanted) at age 20 is different to what we wanted (or thought we wanted) at age 30, and 40, and what we want today is almost certainly going to be different to what we want out of life a decade hence.
If we’re in a relationship, then our partner will have experienced their own path of growth and evolution.
FIRE is an excellent example of a game changing divergence in priorities and life goals, changing the rules in the middle of the game. One day an epiphany strikes, leading to an abrupt change in direction as disruptive as discovering a partner is pregnant, diagnosed with a terminal disease, or wants to accept an unexpected overseas posting.
Whether those changes are aligned, or even compatible, with those of their spouse is in large part down to the luck of the draw. Communication helps identify the disconnects, and some will prove to be reconcilable.
There is a reason why motorways have off-ramps, once begun many of us will choose to not to continue a journey all the way to the end. That luxury of choice is what makes life exciting, although it also results in getting lost and domestic disharmony as couples squabble over directions, route, and destination!
Thanks Indeedably, much appreciated.
I always love your comments, likewise much wisdom & I appreciate the thoughtfulness. Absolutely – it’s the luxury of choice that FIRE’s all about to me. It opens up more doors but it’s still up to each of us if we want to peek behind them or not!
The relationships theme is fascinating. I don’t remember who said it but it’s that thing about either growing together or growing apart. But if you try and freeze time & expect to stay the same – it just doesn’t work. I think better communication just speeds up the end result – be it good or bad.
Thanks again – your input always appreciated.