Updated on June 6, 2020
If you look carefully around the web, you’ll read scores of articles about the desire to retire early or how fabulous the early retirement lifestyle is. The FIRE movement (Financial Independence Retire Early) has grown rapidly since I first began writing about retiring early in 2009.
The reality is, there is a lot of downside to retiring early nobody talks about. Take it from me, someone who left their corporate job for good in 2012 at the age of 34. I agonized with the decision before I left, and experienced some downside surprises that I did not anticipate until after I had already left Corporate America.
Leaving a stable job, especially during a global pandemic and massive unemployment is a scary thing to do. The economic environment is extremely uncertain. If you decide to retire early and realize six months later you want to come back to work, there may not be a job to come back to!
Let me be clear. I love early retirement. However, I’m going to play devil’s advocate because retiring early is not something to be taken lightly.
Let us explore several reasons why people want to retire early, why they exist, as well as understand why we should all think twice about pulling the ripcord too early.
Why People Want To Retire Early
You would think the reason why people want to retire early would be obvious: the desire for freedom. However, life is much more complicated than wanting to do what you want, whenever you want. The below reasons why people want to retire early might sting, but thy are the truth.
1) Haven’t found the right job. The number one reason why people want to retire early is because people haven’t found a job that gives them enough fulfillment to do for the rest of their lives. Nobody quits a job they like. If there was a job paying $80,000 a year to hike in the mornings and get massages in the afternoon, I’d do that forever!
2) Easier way out. If you are a sub-optimal performer, you tend to experience a sub-optimal lifestyle. It’s easier to just give up as a result. Let’s say you are a research scientist who after 10 years never produces any relevant research and finds no cures. Instead of going on with failure, you decide to give up and get out of the game. Early retirement is like the cowards way of not having to be the best any more. Some even liken it to suicide.
3) Some people want shortcuts in lifee. Society has shifted our ideals from hard work and thinking long term to instant gratification. Nobody has the patience to work for decades before being eligible for a pension. Look at our pathetic <5% savings rate. We all think we know more than we do and deserve to be the rich boss now. When we don’t get our way, we quit, rather than letting people know we couldn’t reach our potential.
4) A feeling of hopelessness. During the downturn a tremendous number of people began writing about location independent lifestyles that allow one to break free from the 9-5 and “really doing what you want.” In actuality, we all know that what they really wanted was to have a good job and be accepted by society.
It’s because of the downturn of 2008-2009 that so many were displaced with nowhere to go. If they did, perhaps they’d think differently. In an economy where everybody is losing money left and right, what’s the point of working some think. I suspect the same thing may happen in 2020 as well.
5) Realization that time is precious. With the median lifespan hovering around 80 years old, you only have 20 years of retirement to enjoy your life if you retire after 60, when most people do. People in this camp have a heightened awareness of time and therefore do everything possible to make sure they are financially stable sooner, rather than later.
I’m a strong believer in this thought process, but at the same time, I don’t want to cut short my potential. The worst is running out of money and being too old to do anything about it.
The Dangers Of Early Retirement
1) Oops, you change your mind. Imagine retiring at 37 after 15 years of work after undergrad. You spend the next 3 years traveling the world, living a leisure lifestyle and experiencing new things.
At age 40, you realize the reason why travel and play is so fun is because of work! You have the urge to get back into the game, but who’s going to risk hiring a 40 year old with a 3 year employment gap?
The employer will suspect you are rusty, and that you may just bolt after a year. As a result, the employer simply chooses to hire someone with no gap in their employment, or someone else from another firm.
2) You run out of money. No matter how conservative we are in our retirement money needs, something unforeseen may happen. Maybe you have a medical disaster, or your house blows down. Maybe your investments tank due to a massive economic downturn. Who knows what the future holds.
But if you partake in “normal” early retirement, without the mega-millions windfall, you may find yourself needing more one day. Again, a large employment gap is perceived as riskier by the employer and you may be unhireable if you need to return.
If you want to retire early, the most you should be out of the workforce is three years, but preferably two years. After two years, you should have enough taste of the early retirement lifestyle to figure out if never working a normal day job is right for you.
Here’s a savings guideline by age you should consider before retiring early.
3) You lose touch with friends and family. It’s nice to have all the time in the world to do whatever you want. But, if your friends and loved ones are busy working all day, they can’t join you on your midday hike or adventure to Bora Bora.
They may also have a family to tend to during the evenings and on weekends. If you’ve ever taken a staycation by yourself, you’ll soon realize how lonely it is when others are busy leading their own lives.
4) You may find it difficult to start your own family. Unless you retire with a tremendous amount of money, having a child and raising a child may be too expensive an endeavor to undertake as early retirees. In big cities like New York City and San Francisco, you might have to spend around $1 million to raise your child from birth through college.
Even if your household has a $5 million net worth, it’s not easy to sustain an early retirement lifestyle with two kids in a big city like Los Angeles. Interest rates are close to all-time lows, which means the relative income generated by your retirement investments are also likely at all-time lows.
Finally, your focus on saving and investing enough money to retire early might make it more difficult for you to have kids if you wait too long. I know so many couples who were so focused on keeping expenses down in order to retire early, that by the time they started trying after 35, it was too late. They had to go through IUI, IVF, and all sorts of expensive and arduous procedures, many to no luck.
5) You may lose your own self-respect, and the respect of others. Unless you’re out there helping the poor, fighting racism, or trying to make a positive difference in people’s lives, you might start getting depressed you are contributing very little to society. You need purpose in retirement, otherwise, it’s hard to stay retired.
Others may stop respecting you because you aren’t doing anything productive either. Traveling the world and writing about how great your life is, is a very unproductive endeavor.
A great many rich early retiree friends from the first dotcom bubble in 2000 have mentioned they wish they didn’t get rich so quickly. Instead, they wish they worked a little harder for their money.
During the first year of early retirement, I was bored out of my mind. I would wake up automatically at 6 am every morning and just twiddle my thumbs until my wife woke up at 8 am or later. It was when I committed to writing on Financial Samurai every day where I found my purpose in early retirement.
Related: Once You Retire Early, It’s Hard To Stay Retired
Careful Who You Listen To About Early Retirement
Early retirees will croon about how great their lifestyles are. In some ways they are spot on. But notice how they seldom write about the hardships they face. They can’t, because it’s important they continue highlighting how awesome everything is, to justify their decision to no longer work.
The louder you have to brag about how great your early retirement lifestyle is, the less great it probably is. Just like how confident people don’t brag about their achievements, people who are busy living great lives aren’t telling the world about how great their lives really are.
Can you imagine spending 16 years going to school (grade school + four years of college) only to work for 10 years? Some would surely say that’s a waste, would they not?
Perhaps the worst that could happen is some aspiring scientist, musician, lawyer, or teacher decides to give up their careers because they believe traveling around the world on a shoe-string budget is so glamorous.
Years later, they realize their fingers don’t remember the notes anymore and the chemical formulas are one big haze. Maybe they would have made it as a concert pianist, or helped discover the cure for seasonal allergies, ACHOO!
What a shame they never reached their full potential.
Related: If I Could Retire Again Here Are The Things I’d Do Differently
Early Retirement Can Be Selfish
I think back upon my childhood years and remember how much effort my parents put into raising me. My mother would spend hours explaining mathematical equations after dinner every day. My father would read all my essays and fix all the punctuations and grammatical mistakes.
As a parent now, I appreciate how much time and effort it takes to raise children. To work less years than you went to school doesn’t feel right. It feels like I wasted some of my studies and my parent’s efforts.
To not want to be a productive member of society when I know I can is selfish and lazy. Again, this is one of the main reasons why I’ve committed to writing 3X a week on Financial Samurai for the past 10 years. If I’m not going to be a laborer, then I want to at least help more people reach financial independence sooner.
By stopping work early, you are also depriving the government and society of your valuable tax dollars. Taxes are used to help fund schools, roads, libraries, Social Security, Medicare, defense, and more. I was paying over $100,000 a year in taxes for 10 years before I retired in 2012. Then I stopped paying as much for the first several years to help society.
Look Beyond The Smoke And Mirrors
Early retirees sometimes like to pity those who have to work. Yet perhaps we should empathize with those who are lost and haven’t found something they truly love to do (point #1).
It’s impossible to all be great humanitarians working tirelessly until the age of 65. It’s easier just to give up and tell the world how fabulous your life is, and how you’ve retired on your “own” terms.
But what are early retirees really running away from? Once you recognize the truth, your career path and your life will be much clearer.
The best thing you can do is work at a job you’d do for free. Sometimes, it takes doing your own thing to truly find what makes you happy.
So long as you have purpose, whether you are working or in early retirement, everything will turn out OK. It often just takes finding what that purpose really is in life.
Early Retirement Recommendation
One of the best way to become financially independent is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money.
Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.
Finally, they have an amazing Retirement Planning Calculator that pulls in your real data and runs a Monte Carlo simulation to give you deep insights into your financial future. There is no rewind button in life. It’s better to retire with a little too much than a little too little.
Updated for 2020 and beyond.
You certainly made some good points. Having been in the advice business for 30 years it is certainly the goal of 99.9% of people to stop working as soon as possible. All of my clients had to wait until their 60’s to achieve it but I can certainly attest to the fact that they would have immediately pulled the pin on employment if they had suddenly won the lottery or inherited a large sum of money!
Now in saying that, retirement didn’t seem to represent to them a move to a state of perpetual nirvana where freedom of choice and an escape from the mundane was the goal. Rather it would seem, it was to end the drudgery of their employment and all the machinations it entailed. The continuous corporate intrigue, the weird assortment of personalities amongst work colleagues, poor management and leadership, a lack of feeling truly needed and respected for their efforts (even though that was the constant message being pumped to the masses). Right down to the never-ending repetition of a 3-hour daily commute come rain or shine.
Retirement, for them it seemed, was really an escape from a career choice made at a very early stage in life that they obviously felt condemned to continue. And in order to live a ‘normal’ life and raise a family remained committed through thick and thin. Lifes major role model and followed by the majority it would seem favours the attributes of conforming to a world of 9-5 with all that entails.
I strongly suspect a complete change of occupation into a far more satisfying and stimulating role suited to the individual’s needs, would have changed the whole ball game so to speak and would have had people remaining happily occupied in economic activity well past their normal retirement ages. But fear, lack of confidence and no doubt, the norms society projects onto people kept them shackled and dreaming of a better time to come.
Wow dude. You really didn’t make any friends with this post. What I don’t get is how you can call early retirement “selfish,” but you yourself has retired at 34? Hmmmm… interesting perspective.
I don’t buy into the whole workaholic rat race my job is my life mentality. As for contributing to society? What makes you think that every company anyone works for is beneficial for society or for the planet? Do you know what I do for society and the planet? I don’t eat meat, and I chose not to have children.
I wrote the post a year before I decided to retire early to make sure I could gain as many different perspectives as possible.
I got a lot of insight. But did miss some.
See: https://www.financialsamurai.com/if-i-could-retire-all-over-again-these-are-the-things-id-do-differently/
Online, early retirees are everywhere. I get beat down and chastised for “still working in my 40’s like a dumb ass” whenever I comment on an article about retirement online. Yet in real life, I have never met one person who retired at younger than mid-50’s. Where are all these young retirees in actual, everyday life? I’m asking because they seem to be a dime a dozen online, yet nowhere to be found in real life. I’m close to a half a century old. That is a long time, and if early retirement were so prolific, then I would think that I would have met at least one early retiree by now. This has always made me wonder…I’ll just say that.
I’m 63 and don’t make enough to even retire, not early and not ever. My wife wants to retire at 65 (in five years) but that will not help our bottom line. In order to put food on the table and pay our bills, I will have to keep working until I’m physically incapable of doing so. I find it extremely selfish of my wife to be insisting on retiring… because she refuses to sit down and look at the numbers with me. She is hell-bent on retiring… she has likely told her friends of her early retirement plan, and having told them this as if to brag, now she has painted herself into a corner from which in her stubbornness, we will not be able to escape. When she realizes that I am serious about not retiring, she is going to be so angry at me as to make life unbearable, then I’ll have to get a divorce and that will make things even worse for me.
Became financially independent and cut work to 5 hours/week for 36 weeks/year at age 52. Not because I’m lazy, or didn’t like my job, like this condescending piece of crap “article” states, but b/c my life isn’t defined by work. Working less gives one more control over ones life; what one does with that additional freedom depends on ones values. Why all the judgement?
Right there with you on this article! And the guy who wrote this retired in his 30s! Go figure.
Retiring is selfish? What a stupid ass comment! Since when does a retiree have to give a shit about what the rest of the world thinks about that?
Just wanting to live as opposed to dying for a noble cause could be and is selfish.
Not wanting to get married and have a family can be selfish too.
And I’m guilty of both in addition to retiring early.
The world doesn’t owe me anything and I don’t owe the rest of the world anything either.
While I’m at it I want to say that just as there are those who didn’t plant too well for thier early retirement there are those who I’m sure have done so.
I’ve read about some of them already.
I agree with you….I’m retiring in 20 working days at 56, not sure if that is early, but I’m doing it!!! Who cares about going back to work for someone else? Reinvent yourself and work for yourself, we are all talented in some way…Cheers!
I am a housewife and love every minute of it, but don’t get me wrong…. I work waaay harder than I ever did when I was in the working world. I not only do more, I also work around the clock. I know it sounds cliche but housework is never ending. I keep up the laundry, clean the house, mow the lawn, shop for groceries, cook all meals. I don’t get a paycheck, but my husband makes more money in one day than I did in one week. Please be assured I am still contributing tax dollars for roads, schools etc through my husband.
I totally understand how you feel about it because I’m in the same boat. That 24/7 household work never ends.
I left my work as a doctor simply because I couldn’t tolerate all of the stress it caused me. That was driving me mad. My job was stressful and loaded by nature, but add to that tons of internal stress to remain successful, and tons of family related responsibilities. I decided to quit, but then early retirement came up as an option.
My brother had a stressful job as well which caused him uncontrolled hypertension & eventually he died with renal failure. Having the same perfectionist personality & the same genetic predisposition, I just learnt a lesson. My workload was greater than I could tolerate, but that never meant I was weak..
At the moment my only challenge is the decision about having a part time job where the load is tolerable, yet sufficient to polish my experience.
Hi,
I really appreciate the amazing work women staying home do. My wife decided to do that 15 years ago in spite of being an Architect by profession.
My only concern is that such decisions when taken by the male counterpart who is the only earning member is seen in a different light and not allowed.
A lot of hostility in the comments section. Mainly from those that retired early. Early retirees need to understand, not everyone is in the same boat. It’s awesome that you got to hang it up early and head home and your life is all yours. I understand that to you, working is a waste of life. But, you have options. You either have a ton of money, or you are getting paid without having to work. Good for you. That is not the case for most people. I am on the fence about retirement. I may do it and I may not. Working is not that bad for me. I like my job ok. Do I love it? Well…I wouldn’t go THAT far. But, I like it. Right now, I am NOT sold on the idea of retirement. Well, not until I get to be a much older age, anyway. It’s like Bobby Bowden, longtime head football coach at Florida State said just a few years before he retired. “There is only one big event left after retirement”. That statement applies to everyone. Early retirees can be dead within a few years just as quickly as someone who didn’t retire until they were 70 plus. I would probably die within a year if I retired now. And I don’t want that. Here is something else that I don’t get. Why am I even considered to be retirement age? I am not even 50 for crying out loud!! Yet, I have people looking at me like “when are you going to hang it up?” Is it because I am not 20? And yet, two of the people that I work with are 66 and 72. And yet…nobody ever asks them when they are going to hang it up. They both have GREAT grandchildren and they are still in the workforce and I am considered the dinosaur in my mid-40’s? What gives? Now, don’t get me wrong. I am not of the mindset of “they are old and they need to get out of the way so that young, vibrant people can have those jobs”. I don’t think that way. I’m just curious why I am looked at as the old man who needs to have an exit strategy in place soon. Like I said, maybe I retire one day, and maybe I don’t. But at any rate, it is NOT happening in my 40’s. And if it did happen now or within the next 2-3 years, I would sink into a horrible depression. And before anyone shouts “it’s because you don’t have a life”, I do other things besides work, believe me. But, for one, it would not be enough to cover me all the time and fill the void left by no longer working. And two, I have seen people retire and run out of things to do very quickly. There is only so much travelling, gardening, stamp collecting, gabbing with the neighbors, porch swing sitting, etc that one can do.
Not me. I love not “doing” anything. Why can’t people just be? Why do we always have to be ” doing”?
I love this topic especially because I am in the same situation. I have decided to do the same, retire at an early age. Not by choice though but because of ill health, a result of prolonged high stress high pressure and getting in out of hospitals. I need a break. I would rather retire early than die early and leave my children and grandchildren that love me and are still enjoying being with me, than holding on to a job where I feel, I have reached a point where I cannot wake up in the morning without having those dreaded feelings, thinking about the environment of where I am going to. Forcing yourself to do this even when you know you have had enough result in negative implications, to the company and to your yourself, specifically your health and performance suffers. Rather leave, especially if you are over 55 or you are working for a company that does not have ideal benefits that encourage you to stay or correct employee support structures.
Yes, people do die after retirement. Simply because they have never thought of another life outside their jobs. They have no social structure except the one they had at work. At work the relationships that you build, are for work purposes only. Yes, you might end up with one or two real friends but ideally you need to have a social life outside your work. You also must have thought of what options do you have once you are out there. Without these you feel lost when you get out. Even those few friends that you may have made at work are busy and do not have time to baby sit you. Boredom kicks in, depression builds up because you do not know what to do with yourself. Problem is you never thought about what you will do if you ever leave, so you become idle and without adrenalin pump things turn bad for you, especially if your loved ones are gone too. I believe before leaving you must have thought about some ideas, what else you can do with the skills you have acquired.
I read that one or two people are saying taking early retirement is being selfish and/or lazy. I do not think that is a fair statement especially when you never walked in these people’s shoes. Somebody said “different strokes for different folks” and I agree with him/her. We all have choices. Early retirement can have the dark side I agree, inadequate financial payouts that does not take into consideration the fact that cost of living is very high (as a friend of mine would say, “there is so much month after the money” loosely translating to the length of the month from one pay day to the next). Unless supplemented “there is so much life after the payout” The retirement payout shrinks day by day. You cannot live on it forever, but if there is a thought out plan I believe it does not have to intimidate.
I am 57 and contemplating early retirement. I agree that it is unfair to call someone selfish for wanting to retire early. We get so hung up on work and advancing in our careers that we forget to live. Then when you find yourself at retirement age, you are too old to finally enjoy the LIFE you have worked to achieve.
I was reading your article to see a devil’s advocate view. While digging around the web, I found an article that was all rose colored glasses from 2016: https://www.forbes.com/sites/laurabegleybloom/2016/06/29/how-to-retire-early-and-travel-20-insider-tips-from-a-33-year-old-retiree/#39bff0517642
Then in 2018 the same person who was the subject in the first article was interviewed, and she talks about the negatives, that she did not expect. fourpillarfreedom.com/money-buys-freedom-but-freedom-doesnt-guarantee-happiness/
My company’s CEO is against early retirement, sees it as selfish for the same reasons you listed above, but he also feels it is a danger to yourself. For him, he worries about disengaging your intellectual brain from the daily trials that are required to run a business. Without that stimulation, he feels it will atrophy.
I am new to your site, do you have any other favorite negative articles about early retirement?
Yes. This one went viral:
https://www.financialsamurai.com/the-negatives-of-early-retirement-life-nobody-likes-to-talks-about/
Live and let live. What people do is none of my business. I am 69 and work. My wife, who loves me, says I can’t stay home with her. I would drive her crazy. She is right.
At 69 the world doesn’t want me or need me. Because I am self employed, I have the privilege of having a job.
If I retire, I am just an old man. Period. Trust me when I tell you when you get old, you will wish you had a job.
My sentiments well put!
i’m 45 and recently got married and became a full-time housewife and i love it!! love not having to follow someone else’s schedule, wake up at the crack of dawn for someone else, etc…my husband makes more then enough for both of us to live and eventually retire on. i have no friends and i don’t travel, yet i’m never bored or lonely. this authors “excuses” are just pathetic attempts at scare tactics.
Agreed!