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The Biggest Downside to Early Retirement


The Biggest Downside to Early Retirement350Early retirement sounds fantastic, but it might not be a good fit for everybody. It’s perfect for me, though. I retired from my engineering career in 2012 and life has been terrific. Yes, there are challenges, but I’d still have to deal with those challenges even if I was still working full-time. For example, my mom developed dementia last year. That situation would have been a lot more difficult if I was working full-time. I was able to help monitor her health because I had time. Life is full of challenges even if you’re retired.

My experience with early retirement is positive so far, but it might not be universal. After all, many retirees have a very difficult transition. Here is an article from ESI Money – 10 Downsides of Early Retirement. You can read the details there, but I’ll give my reaction here and share the biggest downside in my early retirement.

10 downsides of early retirement

  1. Loss of Income – This could be a problem if you didn’t plan well. This is not a problem for us because Mrs. RB40 still works and I have a little income from blogging and various side hustles. Lastly, our passive income exceeds our expense now. Mrs. RB40 is set to retire in 2020 and I don’t worry about the loss of income.
  2. Reduced Social Security Income – I regularly update this post: How Early Retirement Impacts Social Security Benefits. In short, my benefit won’t change much because I already worked enough. This isn’t a big deal for us because we won’t need it.
  3. Health Insurance – This is a big issue. Currently, we’re covered under Mrs. RB40’s employer-sponsored insurance. Once she retires, we’ll have to buy health insurance. We’ll use ACA or one of the health sharing organizations. I’m a bit worried, but I’m sure we’ll figure it out.
  4. Mental Decline – After 7 years of retirement, I pretty much lost all my engineering abilities. That’s fine with me. I was tired of that career anyway. Sure, I’m a bit dumber and slower, but I’m keeping busy. I read a lot, blog about personal finance, hustle, and coach soccer. As long as you keep learning and use your brain, you should be fine.
  5. Physical Decline – It’s natural to decline physically when you get older. Why is this a problem? Do new retirees really exercise less and eat more? I doubt it. Most early retirees become a lot more active and their physical fitness improves.
  6. Loss of Social Interaction – This one could be a big problem if all your friends are from work. Luckily, I made plenty of friends through my son. I had to push myself to be more outgoing so I can set him up for playdates and various activities. I never spent much time with my old coworkers so it’s not a big loss for me.
  7. Loss of Identity – I was totally burned out on engineering so that identity loss was a positive for me. Luckily, I was able to slip into the stay-at-home dad/blogger role. The transition would have been much more difficult if I didn’t have anything lined up.
  8. Boredom – Seriously? I haven’t had a boring day since I retired 7 years ago. I would love a boring day. Life has been very busy as a dad, blogger, landlord, son, home chef, reader, homeowner, investor, and side hustler. Some people will never be bored. Luckily, I’m in that club.
  9. Spouse Overload – Ha! Mrs. RB40 isn’t retired yet. I don’t think we’ll have a problem when she retires in 2020. She is always busy. She’s a card-carrying member of the never-bored club. I’m pretty sure we’ll both have plenty of stuff to do without getting on each other’s nerve.
  10. Lack of Challenge/Purpose – We have an 8-year-old son. There are plenty of challenges and purpose in our lives.

This is a good list, but most FIRE bloggers don’t have much trouble with it. Everyone I know is staying busy and enjoying life. Regular people who don’t have a blog might have more problems with these “downsides”, but it’s hard to find out because they don’t share their stories. Anyway, if early retirement really is a big problem for someone, they probably went back to work. Most stories you hear about early retirement are from people who enjoy it. It is survivor bias.

My biggest downside to early retirement

If early retirement is awesome, what’s the problem? Well, there really isn’t any problem until there is a problem. What I mean is this – life is too easy after retirement. I don’t handle stress very well anymore.

Earlier this year, we moved and put our condo up for sale. Unfortunately, the market turned and we had a hard time selling it. There was a lot of drama and it really stressed me out. One buyer gave us a high offer, but withdrew it after a few days. Another buyer lowballed us and we had some back and forth negotiation. Then it was on the market for several months without much action. We dropped the price a few times and got an offer from someone looking to do a 1031 exchange. (The buyer needed to sell their rental home first and then use the money to buy our condo.) Unfortunately, their buyer fell through. Eventually, we got an acceptable offer and we sold it. This whole ordeal took about 6 months and I was stressed out. I didn’t sleep well and my blood pressure was up. It was a huge relief when I got the check. BTW, I invested the money back into real estate through CrowdStreet and VNQ. The stock market is a bit too scary for me right now.

Anyway, my tolerance for any stressful situation is very low today. I avoid rush hour because I’d get mad sitting in the traffic jam. I’m sure I won’t be able to deal with aimless meetings and other corporate BS. This will be a huge problem if I ever have to go back to work. That’s what happens when life is too easy. The ability to deal with stress is like a muscle. If you don’t have constant stress, you won’t be able to deal with it when the SHTF. Is that a good theory?

I guess I could build up my stress tolerance if I ever need to. For now, I’ll continue enjoying my early retirement. Constant stress really isn’t good for you either.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

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{ 43 comments… add one }
  • Jonathan September 25, 2019, 1:42 am

    I find your blog misleading. Your wife is earning fulltime. So there is one income. If you apply this definition than almost every single income family in this country is retired early

    • retirebyforty September 25, 2019, 7:01 am

      I retired from my engineering career. That’s what this blog is about. She doesn’t have to work if she doesn’t want to.
      Almost every couple retire at a different time.
      Anyway, she’s planning to retire next year.

  • GYM September 25, 2019, 1:14 am

    Always so insightful Joe. I guess when you’re too busy being stressed out at work there’s less time to be stressed out about things like selling the condo?

    I like this the best ” The ability to deal with stress is like a muscle.” I too have a shorter fuse for traffic (4 months into my maternity leave) and my brain is mushy-like but I keep it going with the blogging.

    • retirebyforty September 25, 2019, 7:02 am

      Yes! There is less time to dwell on stuff when you’re busy at work.
      I took some time off when we had our son too. It was hard to go back to work.

  • Lily September 24, 2019, 7:06 pm

    There’s a lot of parenting guilt I see coming too. I keep thinking what if our kid thought it was laziness, maybe if we worked and made more money we could give them a nicer school – a nicer home – nicer activities and afford tutors that will eventually enhance their position in life after they grew up.

    • retirebyforty September 25, 2019, 7:03 am

      Honestly, I don’t feel any parenting guilt. My son’s childhood is so much better than mine already. He’s super privileged. There is no need to feel guilty.

  • Fritz @ TheRetirementManifesto September 24, 2019, 9:04 am

    Joe, insightful post, per usual. I wonder if “handling stress” is like a muscle…lack of exercise makes it weak? Interesting about lower tolerance of handling stress being a downside of early retirement, but I tend to agree. It’s a downside I can certainly live with, and I still smile about all of the stress I’m avoiding by leaving my “job” behind!

    • retirebyforty September 25, 2019, 7:21 am

      I’m sure it’s like a muscle. The good thing is it should come back if you need it later.
      It’s a downside I can live with as well. Retirement is the time to relax more.

  • freddy smidlap September 24, 2019, 6:34 am

    it seems a little crazy, but having it too easy really is a problem. i was humping it at work for a long time (about 12 years) and working swing shifts, weekends, etc. for 2+ years now i’ve been coasting even though i’m still working. i have to find selective stress to add so i don’t get too soft. even weekends aren’t the same because the work week doesn’t suck any more. it’s less of a contrast so i get really lazy on saturdays and sundays. nice article.

    • retirebyforty September 25, 2019, 7:23 am

      I coasted for a few years when I was working too. It’s not great because I didn’t want to go back to working like a dog.
      Then I couldn’t compete with the younger engineers. That’s why I think engineers should retire early. Unless you love engineering and enjoy working 60-80 hours/week. Then keep it up.

  • Little Seeds of Wealth September 23, 2019, 4:08 pm

    I’d rather have very little stress. Stress is only good when I need to get things done but whenever I have to deal with too much stress, I feel like I’m getting closer to getting a heart attack. One of my reasons I pursue FIRE is to leave behind the corporate BS.

    • retirebyforty September 25, 2019, 7:23 am

      Thanks for your input. I prefer to have very little stress as well. Life is so much better.

  • [email protected] September 23, 2019, 12:36 pm

    I’m not early retired yet, but it might be an age thing more than not handling stress well from being retired. The older I get, the less I want to deal with people wasting my time or other kind of hassles. Things that did not stress me at all in my 20’s, stress me now in my 40’s.

  • Abigail @ipickuppennies September 23, 2019, 8:41 am

    I can definitely see how stress would become a problem. There’s so much stress in most day jobs that you get inured to it. Once you leave the stress of work behind… Yeah, it’d be startling when you encounter it.

    Or perhaps the situation always would’ve stressed you out, but you’d have had work stress on top of it. Hard to say.

    I don’t have a commute, so like you I get annoyed in rush hour and try to avoid it whenever possible. And I don’t handle stress well either. Part of that is that my job isn’t very stressful. Dealing with customers can cause some stress, but by and large my job is pretty easy and our customers are almost all quite pleasant. Which is maybe why the occasional nasty customer is so jarring. But the other half of the equation is that I’m a depressive and that lowers my ability to cope with stress. It’s just something I’ve had to make my peace with over the years. Even if I were to retire early, I’m sure I’d find something to stress about. Probably money, knowing me.

  • Jim @ Route To Retire September 23, 2019, 7:57 am

    It’s interesting because I haven’t found too much of a lack of stress since I retired from my job at the end of 2018. Then again, we’ve had a lot going on.

    But I think I’m a lot like your wife in that I seem to find things to keep myself way too busy. Now that we’re getting settled, I’m finally starting to get caught up a little and could focus more on my blog. But last night, I decided I want to learn some programming skills to try to build an Android app. I need to just stop and relax a little! 🙂

    • retirebyforty September 23, 2019, 1:46 pm

      I think you’ll slow down a bit now that you’re settling down. Then again, maybe not…
      Building an Android app? Good luck!

  • Life Outside The Maze September 23, 2019, 7:54 am

    Physical decline surprises me. Since leaving my job I have had loads of time to exercise and love the endorphin release that it generates. I am way way more in shape. Perhaps if you are not proactive before leaving a job this whole list is a bigger risk after early retirement.

    • retirebyforty September 23, 2019, 1:44 pm

      I don’t think physical decline is a problem at all. I have a lot more time to do physical activities now. It’s way better than when I was stuck in the office all day long.

  • Kim @ The Frugal Engineers September 23, 2019, 7:12 am

    I hear you on the stress of selling a house – 6 months is a LONG time. We’re at 4 months and the sleepless nights are getting really old.

  • FullTimeFinance September 23, 2019, 7:10 am

    In some ways I’m feeling this with the change to working more from home. The adaption to going into the office for the week becomes harder simply because I don’t do it anymore. I don’t know that I can get on board with the other commenters lack of empathy, but I do see it as harder to sit still in the office all day rather then pace around my basement while on conference calls. It’s all in the habits.

  • Pennypincher September 23, 2019, 6:15 am

    I could have written these very words Joe! The lowering of the stress tolerance is real. Especially w/the crazy, me first driving out there today.
    I got used to the loss of identity. Who cares, really? I was pretty much invisible when I turned 50 anyway, ha,ha.
    Tell Mrs. RB40 I’ll bring a pie to the next Never bored Club meeting! Count me in!

    • retirebyforty September 23, 2019, 1:42 pm

      I’ll let her know. 😉 Thank you for the encouragement!

  • Tom @ Dividends Diversify September 23, 2019, 5:44 am

    Hi Joe. Of your 10 downsides, I think health insurance is the biggest challenge. All the others can be managed to some degree assuming you retire with enough assets/income. Tom

    • JeffD September 29, 2019, 10:10 pm

      This is what my well off friends bring up immediately when I ask them why they haven’t retired.

  • connie September 23, 2019, 5:17 am

    so we did the plunge about 16 months ago, planning for 15, hubs 55 im 58. we moved to mexico. All of your points are so true. I had given up my nursing career , my husband engineer. Im doing good with keeping busy, hubby not so much. the first 6 months he was busy helping out our landlords fix up another apartment for them to receive income. now he is busy with getting a disc golf course up and running in puerto vallarta..a year before i moved i was diagnosed with lupus. so me getting private insurance in mexico is now out of the question, using their free healthcare, well thats out of the question. there is something to say about free healthcare in mexico. So the 350,000 we had reserved to buy a place here, well that now has to be my back up for healthcare, yes it is cheaper than the states, but one fall and surgery for a broken bone could costs 10,000 usa easy…heart attack 30,000..so not owning and renting, well in the last 3 years so many americans and canadians moving here, EVERYTHING has tripled in the last 3 years, rents are starting to get up there to usa prices..we have a good budget coming in 4000 a month, i can keep our costs to 3000 a month and still saving 1000 a month, we were going to stop the 1000 a month from my husbands 457, but want to wait another 6 months to make sure..i dont think i could move back to the states because your life does become so much slower. as far as 24/7 with spouse, thank god we have a good marraige, in 18 months hasnt bothere us, its made us closer, staying busy alot harder without costing us a fortune, we volunteer with clean ups and with projects for kids, but even with just offering volunteering some how it cost us money. also living in mexico, i swear i put out so much more money on tipping, you have to tip laundry, amazon delivery, water delivery, the person who bags your groceries, constantly people stopping by the front street for money, they see white skin, it means money to them and its so hard to say no. we are hoping to be able to stay in pv for atleast 5 more years, before its way over our budget we will see, starting to look for a less tourist place now to move too, would i still do early retirement, i kind of wished we would have waited till hubby was 60. no regrets and still really trying to figure it out…and for all of you that think mexico is cheaper, its only cheaper if you live in a non tourist town, so learn spanish and living in those areas…its not paradise, so dont just go to social media, think its all fun and games and cheap. Do your research by having boots on the ground and really look at the prices…i pay just as much for food at the market where the mexicans shop as i did in tacoma washington..

    • retirebyforty September 23, 2019, 1:41 pm

      Sorry to hear about your health problem. Wow, I thought it’d be way cheaper in Mexico. But you’re right. It’s not cheap in touristy areas. I hope everything works out. Maybe moving to a less touristy area would be better. Thank you for the update. Best wishes.

  • Mike September 23, 2019, 4:05 am

    I am glad that you touched upon some of the downsides of retiring early. It’s important to have a healthy dose of reality for those that get swept up in the thought that they can retire early from their career.

  • Xrayvsn September 23, 2019, 3:41 am

    I can see how quickly you can adapt to a stress free lifestyle and then lose some ability to cope when a stressful event does happen. But hopefully you have planned accordingly and taken the biggest cause of stress, money issues, off the plate.

    The mental and physical decline is something to always be wary of. Even taking a week away from work for vacation can get you off your game. It takes me a 1/2 day or so to snap back into my routine the first day back from vacation.

    There are doctors who take longer sabaticals and return to work, but high intensity occupations like medicine pose a challenge when you take long breaks and try to return.

    • retirebyforty September 23, 2019, 1:37 pm

      Mental decline is a big issue. You have to keep learning to keep your mind sharp.

  • Justin Williams September 23, 2019, 2:59 am

    Try meditation and yoga. Helped my stress immensely

    • retirebyforty September 23, 2019, 1:36 pm

      I should have taken those up when I was stressed out earlier this year. I’m pretty good now. 🙂

  • Robin ADAMS September 23, 2019, 2:11 am

    I can fully identify with the increased sensitivity to stress, or reduction in the ability to handle it. I don’t find it a major handicap but have noticed that I react different and stronger than when I was working.
    Nice to know I’m not alone one that one!
    Cheers for the article!

    • retirebyforty September 23, 2019, 1:35 pm

      Great to hear I’m not the only one. The good thing is we don’t have a lot of stressful events to deal with.

  • LazySod September 23, 2019, 1:51 am

    I guess you will lose ability to deal with corporate life stress, but it is unlikely you will lose that ability to deal with stress in general. Life will always throw stuff at you and you will have to deal with it. You know for sure, problems do not vanish just because you retired. So I don’t see that as a downside. The downside for me is more being of a one-way road, cause after a long break you will not find a good job, in cause you need or want to work again. You have to stay flexible and accept a low paying job if that’s the case.

    • retirebyforty September 23, 2019, 11:39 am

      Life is a lot less stressful for me right now. There are small stressful events, but those I can handle. It’s the big stress that’s a lot harder to deal with. I guess I’m less busy too. I have more time to dwell on them. When I was working full-time, I was too busy to think too much about these things.
      Ahh.. I see your point about being a one-way road. Thanks for your input.

  • Dave @ Accidental FIRE September 23, 2019, 1:29 am

    I would take issue with one of those. You say you’re a bit “dumber and slower” – but that’s ONLY at engineering. You’re now way smarter and wiser at many other things (parenting, blogging, writing). So it’s trading a knowledge you no longer need to gain knowledge that’s more valuable in your life right now. 🙂

    • retirebyforty September 23, 2019, 11:37 am

      Thank you for your compliment! Every post needs a little self-deprecating humor.
      Everyone needs to keep growing. That’s life. I’m glad I’m better at these other facets of life.

  • Financial Freedom Countdown September 23, 2019, 12:09 am

    Joe, I thik this ties in well with your other article why 25x is not enough. For specialized professions like engineers, lawyers. doctors etc; it is practically impossible to go back to your old profession after taking a long break. And one is so used to working at a high hourly rate that any other job will not seem worth it.

    • retirebyforty September 23, 2019, 11:36 am

      If early retirement doesn’t work out, you have to go back very quickly. The alternative is to change career or become self employed. There is no way I can go back into engineering nor would I want to. Life is too good now.

  • Mr. Tako September 22, 2019, 11:54 pm

    Great post Joe! I think for me the biggest downside to this whole “early retirement” gig is lack of identity. I blog anonymously, so I can’t just tell everyone about it. This makes it hard to explain to people who I am and what I do.
    Most people associate “who they are” from what job they hold and what company they work for. I don’t have any of those things, so it’s kind of hard to explain ‘me’.

    I know, it’s not a huge problem, but it’s the biggest one I have these days!

    • retirebyforty September 23, 2019, 11:24 am

      Really? I just tell most people that I work from home. Only a few people follow up with more questions.
      I’m perfectly happy being a SAHD/blogger. It’s a good identity for me.

  • Eva September 22, 2019, 11:14 pm

    Hi! This was a very good article. I have seen this effect in unemployed friends, stay-at-home mothers and freelancers who work at home. I think early retirement is great and avoiding traffic jams is even better, but a certain level of activity is very good. I have observed that these people also have lost a lot of empathy because is always all about them. That´s the only thing I wouldnt like to loose if I retire early, it really makes things very difficult for them.

    • retirebyforty September 23, 2019, 11:23 am

      That’s a good point about the loss of empathy. When you don’t have to socialize much, you don’t care about other people.
      If that’s important to you, you could volunteer or do some kind of community service.
      Thank you for your input.

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