Thursday, May 17, 2007

Don’t Retire Early? – My View on the Subject

Before I begin I have to admit I’m envious of anyone who “loves” their job so much they’d do for free. Now don’t get me wrong I do like my job, but I don’t love it. However, even if I did love it I still wouldn’t want to do it for 40hrs a week, every week for the next 30 years. Actually, I don’t think there is a single thing that I’d “love” to do every day for the next 30 years. I love doing lot’s of things, fishing, reading, investing, watching movies etc... but like working I wouldn’t want to “have” to do them for 40 hours a week for the next 30 years.

Early retirement is a risk to your future earnings - what if you retire at 45 then decide 5 years into your retirement hiatus that you want to work? Will you be happy with that Wal-Mart greeter job? ;) You greatly risk your future earnings potential.

I disagree that the only jobs available to young early retirees out of the work force for 5 years is Wal-Mart greeter type jobs. Using the same logic the only jobs available to professional working women who take 5 years off to raise their children are Wal-Mart greeter type jobs. With the exception of some high-tech jobs most people could re-enter the work force in their previous profession after a five year hiatus.

Early retirement likely means a decrease in your disposible income both in retirement and today

I agree. That’s why it’s important to determine how much you’re going to need before retiring early. Of course you’re going to have less disposable income but the trade off is you’re going to have lots of time…what's your time worth?

Think about yourself today! What does it mean to work at something that you don't enjoy?

I’m like many people I talk to, I like my job however I don’t want to have to do it for 8 hours a day everyday. In fact there’s probably nothing (hobby or job) that I’d like to do for 8 hours a day, every day, for the next 30 years. If anyone out there has anything they would “love” to do rain or shine for 8 hours a day, everyday for the next 30 years please post it in the comments section.

Why sacrifice a possibly a lower quality of life / enriching life today for the purpose of a possibly lower quality of life / enriching early retirement life?

I think “quality of life” is a term that is very subjective. For many the quality of their life would be elevated by having more time instead of more money. The only thing you can’t buy in this world is time and for most the freedom of retirement will allow them to spend more time pursuing their hobbies and visiting with friends and family.

8 comments:

moneygardener (AKA investor99) said...

Well stated.

Like I said, to each his own.

Canadian Dream said...

Good post MCM. I totally agree that sometimes your passion doesn't pay well. For example, I love writing fiction, but it just doesn't pay that well.

CD

dong said...

Nice Responses. Working never is black and white. Early retirement isn't about getting out of the workforce, but being in the workforce on your own terms. That might mean 10 hours a week....

Greg said...

Good Post. Part of the differences in opinion on retirement is probably due the different definitions of retirement. For me, retirement is changing from "have to do" to "want to do" (and that could mean reducing the work week for a job I like since I no longer have to have the extra $ and would rathe have the time). Also retirement doesn't happen all at once, this change can occure at different times for various parts of our life.

On the money can't buy time thought, that is true however money can buy better use of time (e.g. pay someone for lawn maintenance or snow clearing or home renovations) or can trade money for time (reduce work hours if employer allows). OK so cuts into the money being put away for retirement, however we should be enjoying the journey too.

Robert said...

One other point (if your Canadian) is Dividends are taxed at a much lower rate so you need less gross income to get the same net.

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QUALITY STOCKS UNDER 5 DOLLARS said...

To just retire without a plan is a mistake.