Avoid These Nasty Bumps on Your Road to Early Retirement


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By David Ning

Pretty much everyone, at one point or another, has wished for an early retirement. The freedom and flexibility of not worrying about how to make a living is certainly very appealing. But once you start down the road of saving for early retirement, you may find these surprises waiting for you.

  • Your career can still feel very long. Even if you plan to retire at 45, which is considered an incredibly young age to stop working, you are still going to be working for two decades. And early retirees need to keep their living expenses lower and save significantly more of their paychecks than people planning to retire at a more traditional retirement age if they want to leave the workforce for good. It can be difficult to maintain the focus and commitment required to save enough to retire at a young age.
  • Working so hard could make you want to retire even sooner. The more you think about a life in which you don't have to go to work, the more you will want to move up that date. Instead of retirement at 45, you may want to quit your job at 42, or even 40. But each time you move up your retirement age, you will have to work even harder to earn and save more. Don't work so hard that you become burnt out and unable to meet your goal.
  • You might be afraid to quit. Even if you have saved enough money, you might find yourself apprehensive about leaving your job. Doubts will creep in about being able to afford your expenses for the rest of your life, and you may find yourself wanting to work longer to beef up your finances so that you can better weather the possibility of running out of money. There's no way to know what inflation will be over the next five decades or if there will be another significant financial downturn. Staying in the workforce a few more years can seem safer than beginning to spend down the savings you worked so hard to acquire.
  • Other people may not be happy for you. Once you finally get the courage to draft your resignation letter, not everybody will be happy for you. People who didn't save as diligently as you or were unable to save due to their life circumstances may be jealous of your freedom from working. Other people may assume that you got lucky and inherited money or won the lottery and neglect to realize the hard work you put in to get to early retirement. Early retirement will make you different from most of your peers, and their responses could range from bafflement to envy.
  • It's scary to spend down your life savings. After you retire, you may hesitate to withdraw more than the growth of the portfolio because you don't want to see the value of the stash go down. After spending two or three decades building it up, in can be difficult to watch your account balance get smaller every year. It's important to determine a sensible withdrawal strategy that meets your risk tolerance and has a high probability of lasting for the rest of your life.
  • There will be parts of work you will miss. Some jobs are interesting and stimulating. But even the worst jobs have pleasant moments. Many people develop relationships with the co-workers they see every day. The challenge of the work itself, the camaraderie at the office and even the complaint sessions at lunchtime will become good memories you will likely miss.

The freedom of having enough financial assets to choose a lifestyle without a job far outweighs these minor nuisances. But it's worth thinking through the emotions you are likely to experience when you no longer go to a job each day.

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September 23 2014 at 4:58 PM Report abuse rate up rate down Reply

I retired early at 58. The reason was to take care of my elderly parents who have multiple health issues. Even with careful planning my budget is extremely tight. It would have been nice to be able to work longer and save more but we don't always get to choose what happens in life. My only advice to people is to save, save, save. You may not have a choice about retiring early.

August 07 2014 at 1:33 PM Report abuse +3 rate up rate down Reply

No one can retire at 45, unless they never had to work in the first place.

August 07 2014 at 11:24 AM Report abuse -5 rate up rate down Reply

First of all, it would be nice to see some decent comments on stories like this. Second, unfortunately I have to add to the "stupid" comments. The biggest bump you need to avoid is losing your job at 57 and having to through through most of your savings just to survive.

August 07 2014 at 11:17 AM Report abuse +3 rate up rate down Reply
1 reply to pj512's comment

How can you aviod it if your work shuts down with no insurance or severance ? It isn't as if it's a choice. Some people are still relling from the recession.

August 07 2014 at 12:02 PM Report abuse +1 rate up rate down Reply
worried man

"Seventy percent of Americans - including 86 percent of Republicans - believe undocumented immigrants threaten traditional U.S. beliefs and customs, according to the poll." Politicians believe that they are good for business. They get money from taxpayers and spend it all so of course businesses love it!

In Illinois, Democrats raised taxes and raise them every year at the local levels until old people have to cut back to bare bones and eat irradiated chicken. During the roaring 2000s the general public and politicians thought it would never end and we would all be millionaires so they spent like drunken sailors and expected the money to just keep rolling in. They racked up massive debt, unscrupulous Ponzi schemes that greedy people fell for, promised massive pensions for unions, government workers, and the general public demanded it. Most local and state governments cannot fund pensions. Workers are crying that they expect to get at least 38K on average for working 20 or 25 years and know every trick in the book to even get more. Face it ...people are as greedy and corrupt as their government, not to mention that we lost 8 Million plus jobs to the Chinese and many more millions all around the world. Solution : bring in more immigrants to work for less and subsidize them with government welfare,and let the middle class die

August 07 2014 at 11:16 AM Report abuse -3 rate up rate down Reply
2 replies to worried man's comment

Wow, that statement is beyond ignorant.

August 07 2014 at 11:27 AM Report abuse -2 rate up rate down Reply
2 replies to MISANTRHOPE's comment

Actually, it isn't. It's just true. It was a poll.

August 07 2014 at 12:05 PM Report abuse rate up rate down

Nice rebuttle, wayne.

August 07 2014 at 8:30 PM Report abuse rate up rate down

If it weren't for investing in the markets, most public sector pensions would have even more trouble staying solvent. So when publc sector union folks go guns blazing against evil wall please keep in mind rising markets help take some pressure off us private sector taxpayers whom are tasked to fund said pensions.

August 07 2014 at 8:36 PM Report abuse rate up rate down Reply

The republican money machine has this country in a vary bad state of affairs. They will not do anything good for our country, only thing they want to do in increase the power of thir party. Which is also bring a lot of hate to this country. Just look at Michigan, the republicans have taken control of the government. Passed 1.3 billion in new taxes on the backs of the senior citizens. Passed 900 million new tax for the corporations and still not sure where the new money will come from and now aregoing to pass another 1.3 billion new tax to fix the roads and bridges. The did nothing when they had a democrat governor for 8 years and are now very far behind and are making up with billions in new taxes. Dont tell us about the tax and spend democrats, republicans are far ahead in creating new taxes.

August 07 2014 at 10:22 AM Report abuse -4 rate up rate down Reply
1 reply to toosmart4u's comment

Some of us remember how G. W. Bush cut tax revenues and spent money like there was no tomorrow....his administration didn't watch the banking and financial practices...foreclosures skyrocketed and they gave those financial entities huge bail-out rewards for their imprudent behaviors. Snowball of debt has been rolling along since Reagan except for a short period in between then and now.
If anyone wants to know who is to blame for the dilemmas stated by tootsmart4u, then all they have to do is look in the mirror.

August 07 2014 at 11:02 AM Report abuse +3 rate up rate down Reply
1 reply to rbearland's comment

The short time during clinton's administration the debt slowed and budget balanced was when Newt was house speaker.

August 07 2014 at 8:38 PM Report abuse rate up rate down

In my working life time the economy was good, if you wanted to work you did. Full employment was considered 3.5% unemployed for those were the people who did not want to work. I never drew one welfare or unemployment check. But that era was when we were mostly run by democrats. Now the republican money machine has taken over and look at us now. We are falling behind in world ranking in every catagory. We keep voting the republicans in and we keep falling further and further behind. Seems we would wake up.

August 07 2014 at 9:30 AM Report abuse -1 rate up rate down Reply
3 replies to toosmart4u's comment

retire early? better have close to 1.5 million or you will be pinching pennies till the day you die and won't be playing golf or not much of anything...

Saving for certain economic groups should not be taxed. If the government needs tax money to fund wars ,build bronze statues, start new programs for illegals then creat more jobs !!! Turn the schools around to train students properly !

August 07 2014 at 9:02 AM Report abuse +3 rate up rate down Reply

Just belly up to the public feed trough. Problem solved.

August 07 2014 at 8:57 AM Report abuse +1 rate up rate down Reply

the only retirement there will be for people today , is when your dead ,until they remove this muslim clown out of our white house in handcuffs in 2014 ~~>ZZZZZZZZ all of America is still waiting ZZZZ. !!

August 07 2014 at 8:44 AM Report abuse rate up rate down Reply