Early 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
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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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Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
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