“I’m not just retiring from the company; I’m also retiring from my stress, my commute, my alarm clock, and my iron.” Hartman Jule

It has been stressed many times that Retirement Planning Is Not Only A Financial Decision But Much More. The decision to retire early and its importance cannot be ignored. Often retirement is seen with a negative connotation and as the end of something ‘Vital’. While in reality, it could be the beginning of a new life and a very great life, if planned well. Retirement is a gift of time and new opportunities that come along with it.

Given below are the pros and cons of early retirement.

The Pros of Early Retirement

1. Health

Irregular work hours can cause lifestyle problems such as high cholesterol, high blood pressure, and high blood sugar. Jobs are getting stressful with demanding deadlines. The unhealthy competition, at times, with colleagues, along with the desire to achieve success faster in life, can take a toll on one’s health. Early retirement can help in getting out of the rat race early and then recuperating declining health.

2. Making your dream a reality

Many of us have aspirations and passions that we never pursue because we are not sure if they will pay our bills, or because we become too busy with our work to find the time for them. Retiring early would provide us more time to pursue our passion and make it a reality. If you have been planning a vacation, writing a book, pursuing a social service activity, or anything else, retiring early could help make that a reality.

3. Repairing family ties

Having a stressful full-time working life can also hurt families’ ties, whether it is immediate family or extended family. This could also be due to geographical distances that sometimes jobs demand.

Retiring early offers the chance to visit family members more frequently and improve relationships. The relationships need to be nurtured and retirement provides us with the optimum and enough time to meet family members. Open communication should be encouraged and we should not allow loneliness to take over our lives. Retiring early is a great opportunity to make new friends who share similar interests. However, it is important to make sure that they have an optimistic and positive outlook on life, as negative influences can affect our lives.

4. Opportunity to try sometime new

Retirement is a chance to be free from work and family obligations.

However, if you retire early, there may still be some pending family obligations that need to be taken care of. You have mostly lived for others, almost kind of a checklist of doing things that were expected out of you. Now is the time to break free. Have a checklist of what you want to do and what makes you happy.

Please make a list of activities that turn you on now and plan to work towards them. Also, make a list of what never turns you on and alternative ways to avoid them. We should spend little or no time on those activities that do not stimulate us. We have worked all life to enhance our net worth. Now is the time to start enhancing our self-worth.

The Cons of Early Retirement

1. Money in retirement kitty is not enough

There could be errors in the retirement corpus calculations. You may get forced to downgrade your lifestyle or be dependent on others during this phase. Or it could simply be that some of the variables like inflation have gone out of control and the corpus that you thought was enough is no longer so. Or the investments do not provide the returns you thought they would when you worked out the numbers. Or there are some serious health issues that cost more money, and this was not planned. The list is endless. This can create mental stress during retirement. To avoid this, it is important to have a buffer and carefully plan out your retirement calculations.

2. Lesser working period to take care of more retirement years

When we decide to retire early, we have to be aware of the double impact. We have a lesser number of years to build the retirement corpus kitty. This needs to take care of more years in retirement, depending on the life expectancy age which has been considered.

Medical advancements have allowed us to live longer, although not always healthier, and this can also affect retirement calculations. So, the earlier we wish to retire, the more money which needs to be planned.

3. Boredom, something missing in life

However well we plan retirement, there can be instances where boredom can creep in. We had always wanted to take those exotic vacations, but once that is checked off from the bucket list, there could be a question of what next. The retirement period may be blissful in the first one to two years, but then boredom can set in.

After having been busy day in and day out, suddenly if there is nothing to do, that can get stressful or depressing. It can be another challenge in itself. Boredom can be a big challenge if meaningful utilisation of time is not planned.

A few of the big mistakes that a lot of retirees make is that they make their couch, fridge and television their best friends during retirement. The rationale being provided is that this is their pastime as they have nothing else to do. This is fine for a couple of days, but then if this pastime stretches to most of the waking day, it is a serious issue. It slowly and steadily starts impacting health – both physical and mental. The purpose of life gets lost on the way and retirement is then viewed as something which has to be completed before moving on to the next life! More retirement mistakes are discussed in Chapter 8.

The Bottom Line

Planning when to retire is not only a financial decision. It is a much more complex decision beyond that. When planning for retirement, it is important to consider factors such as our health, family obligations, and personal temperament. We should evaluate all the possible pros and cons. By carefully weighing the pros and cons, you can make a well-balanced decision about retirement. If the pros outweigh the cons, you may decide to retire. If not, you may choose to hold off on retirement until a future date or opt for a middle-ground solution.

This excerpt from Chapter 6 of the book “Retire On Your Terms! A Guide To Holistic Retirement”, by Rajesh Minocha has been published with permission from the author, the founder of Financial Radiance, an AMFI-registered mutual fund distributor.