early retirement

Early Retirement Traps You’re Not Planning For Yet

Retirement Wisdom · Sep 26, 2019 ·

By Joe Casey

Early retirement is a big achievement that’s years in the making. It takes vision, planning, discipline, and sacrifice to reach the point where work becomes a choice and not a financial necessity. But there are some early retirement traps you may not be planning for yet – and they could create challenges that may surprise you.

Ten Early Retirement Traps to Avoid

As a retirement coach, I see a number of early retirement traps that many of my clients experience. Putting them off can impact your experience in retirement and mute the rewards of retiring early. The good news is that they are solvable. Better yet, balancing your retirement planning to include the non-financial side can prevent them.

Underestimating The Transition

It’s easy to overlook the period of time that it takes to adjust to retirement. You may be thinking: “I love weekends. Isn’t retirement just a long series of weekends? I can deal with that”. Well, retirement is a major life transition. It’s wise to prepare for it. Give yourself time to adjust to it and recharge. A big difference is the pace of life, particularly if you’re transitioning from a demanding fast-paced profession. Take time to downshift gradually so you’re not going from 90 MPH to 50 MPH all at once. Give yourself time to smoothly change lanes. You’ll need to create a new rhythm of life that works for you. Do some experimentation to find what works best for you.
Ignoring Purpose and Identity

Do you love your work? Do you identify with what you do? In retirement, you may need to redefine your sense of purpose. You’re much more than your title, but it takes a while to adjust to that. Being a former X or a former Y can be hard for some people. Becoming involved in new areas can bring renewal and a new direction. There’s a lot of truth to the saying that it’s not about what you’re retiring from. It’s what you’re retiring to that matters. And it’s important for your long-term health. Recent research by the University of Michigan found that purpose is associated with longevity.
The Emotional Side of Early Retirement

It’s easy to be laser-focused on the financial side of retirement because it is so critical. But some people fail to realize that there’s an emotional side to retiring. Until you’re in it. There can be a lot of uncertainty to work through. There are gains (like freedom) but there are also losses (like status, lack of structure) to process and adapt to.
Becoming Too Busy Too Quickly

You could find your time getting filled quickly and soon be ‘busier than ever’. That feels great – until you realize you’ve committed to far too many things too soon. Don’t compromise some of your hard-earned freedom on things that aren’t the ones you want to invest your time on. As Stephen Covey sagely advised, “It’s incredibly easy to get caught up in the thick of thin things.” [1]
Fear of Boredom

High achievers confide that they’re most afraid of this in retirement. There’s a downside to having all that freedom. People enjoy living in a well-deserved vacation mode for a spell, but then start to drift and inertia sets in. After a while, they’re surprised to find that they are … bored. They miss the challenge of work and haven’t yet replaced it with something new and different.
Failing to Retire with Your Brain in Mind

Depending on what type of job you’re retiring from, retirement could affect your cognitive functioning over time. Make a list of things you may be interested in that will provide some level of challenge, like learning a new language or skill mastering an activity you enjoy. You might consider keeping work in the mix, especially if it is work you find meaningful. And remember that variety is indeed the spice of life, and perhaps especially so in early retirement. Begin with a list of things you’d like to explore that provide the right mix of complexity, engagement, and challenge for you.
Isolation

If you’ve been ‘all in’ on your career, you may be surprised by how much your social circle has become tied to your work. In early retirement, those ties are likely to change, and you may need to cultivate new social networks.
Preparing for Retirement as a Single Phase of Life

It’s exciting to be on the brink of not having to go to work every day. You’re eagerly anticipating what you can do with your impending freedom. But there are multiple phases to retirement as retiree, blogger and podcaster Ted Carr explains. It’s smart to keep them in mind when planning for retirement. Even if you’re retiring early, aging is a key part of retirement life. A professor, who’s in his early 40s, shared on our podcast research and recommendations on what you can do now that will help you age well. He noted that there are modifiable factors that can be influenced by what you do now in your 30s, 40s, and 50s).
Burning Bridges

It’s exhilarating to have the ability to walk away and retire early. Make sure that your exit is a graceful one. Preserve your working relationships. You might not think you’ll ever need them as you drop the mike and triumphantly ride off into the sunset, but you just might. Consider that an increasing percentage of retirees are coming back to work, many for non-financial reasons.[2] Keep your professional contacts strong. You may want to tap back into them a few years down line, even to build a part-time consulting business, for example.
Misaligning with Your Partner

Are you both in sync with your dreams and plans for this next phase of life? Are you both on the same page about the trade-offs – both financially and non-financially? And if you’re not both retiring early, what adjustments will need to be made? Have the conversations. You’ll be glad that you did.

Don’t let a great early retirement get derailed. Balance your retirement planning with attention to the non-financial aspects that can make this time of your life the best of your life.

Joe Casey is a former senior HR executive who is in his second act career as an executive coach and retirement coach. Joe is host of The Retirement Wisdom Podcast.

[1] Covey, Stephen R. The Seven Habits of Highly Effective People. New York: Free Press.

[2[ Maestas, N., Mullen, K. J., Powell, D., Von Wachter, T., & Wenger, J. B. (2017). Working Conditions in the United States Results of the 2015 American Working Conditions Survey. Maestas, Nicole, Kathleen J. Mullen, David Powell, Till von Wachter, and Jeffrey B. Wenger, Working Conditions in the United States: Results of the 2015 American Working Conditions Survey. Santa Monica, CA: RAND Corporation.

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What An Elite Athlete’s Early Retirement Teaches You About How to Retire

Retirement Wisdom · Aug 26, 2019 ·

by Joe Casey

Can an elite athlete’s early retirement give clues on how to retire? I woke up extra early on Sunday morning and was surprised to learn that Andrew Luck, the quarterback of the Indianapolis Colts had suddenly announced his retirement the night before. At age 29. News of his retirement leaked on Twitter during the team’s preseason game. Instead of informing his teammates after the game as planned, Luck held a hastily arranged press conference, which was originally targeted for Sunday. His press conference was emotional and heartbreaking at times as he explained what was the “hardest decision of his life”.

Luck explained that he was worn down by the repetitive cycles of injury and rehab over the past four years. He concluded that it was preventing him from living the life he wanted to lead.

“This is not an easy decision. Honestly, it’s the hardest decision of my life. But it is the right decision for me. For the last four years or so, I’ve been in this cycle of injury, pain, rehab, injury, pain, rehab, and it’s unceasing, unrelenting, both in-season and offseason, and I felt stuck in it. The only way I see out is to no longer play football.”

There has been a range of reactions. Luck was soundly booed by Colts fans as he left the field. One sports commentator tweeted that “Retiring cause rehabbing is ‘too hard’ is the most millennial thing ever”.

At first blush, the early retirement of an elite highly paid athlete may not appear to have much relevance to your retirement planning. Upon further review, these seven lessons can leave you better positioned for your own retirement decisions:

Know When It’s Time to Retire

In the NFL, a top quarterback who’s 29 and about to turn 30, is in the prime of his career. But Tom Brady aside, NFL careers are remarkably short, lasting 3.3 years on average; 4.4 years for quarterbacks; and 11.4 years for players with at least one Pro Bowl appearance, according to Statistita.com. Luck played 6 seasons with one season missed completely due to a shoulder injury. Think about what the equivalent would be in your profession. For many professions, this would be like retiring in your early 40’s.

Luck spoke about the clarity he reached in considering his decision. In pondering his future, he considered the physical and mental toll his job was taking. Luck shared that his injuries had created a vicious cycle: “I’ve been stuck in this process. I haven’t been able to live the life I want to live. (It’s) taken the joy out of the game”. These are two useful things to consider. Do you still love what you do? What’s the toll your job is taking?

Be Prepared to Retire Earlier Than Expected

A sizeable percentage of people are forced to retire early for health reasons or to care for a family member. According to surveys by the Employee Benefit Research Institute, 48 percent of retirees leave earlier than planned. It’s wise to factor this into your retirement planning so you have the flexibility to retire due to unforeseen circumstances beyond your control.

Can You Leave Money on the Table?

In Luck’s case, he’s earned over $80 million in his career. While that’s not relatable, everything is ultimately relative. Deciding to retire early in any profession means that you’re walking away from a projected future income. There are certainly many things that are more important than money and health tops the list. Is your financial planning positioning you to walk away when you decide it’s time?

Have Aspirations Beyond Work

Luck has a degree in Architectural Design from Stanford and has shown many interests outside of football, including my personal favorite, the Andrew Luck Book Club. If you’re still working, dedicate some time to personal pursuits outside of work. The ‘all-in’ work culture today makes this challenging, but you’ll be glad that you did.

Cherish Work Relationships

I was struck by how Luck talked about his past and present teammates, highlighting their working relationships, shared struggles, victories, and friendships. It was a reminder of how important workplace relationships can be – and a reminder of how they’ll need to be cultivated and often replaced in retirement. I was most impressed by how many people in the Colts organization he spoke about and thanked, at all levels from the owner to the equipment staff. It’s a good note to keep in mind when you’re planning to retire.

Embrace Uncertainty

It doesn’t appear that Luck has a specific plan for what’s next, which is not uncommon for early retirees. There’s already speculation that he may unretire, as approximately 25% in the “real world” do. In the immediate term, he intends to focus on getting his body and his health right. He stressed that he and his family love living in Indianapolis and see it as their home. He talked about how unsure he was about being around the team as he worked on his rehab at the Colts facility.

Many people want to focus on wellness following a stressful and strenuous career. The key takeaway is to become comfortable with uncertainty and focus on the immediate next steps and build your next chapter one step at a time.

Have the Courage to Embark on a New Chapter

It takes a lot of courage when you’re at the top of your profession to make the call to walk away early. Andrew Luck displayed the courage to focus on his true priorities and move forward. There will undoubtedly be many adjustments and opportunities ahead.

I applaud Andrew Luck’s thought process and admire his decision.

Joe Casey is a former senior HR executive at Merrill Lynch, who’s created a second career as a retirement coach. He holds a Masters in Gerontology from the University of Southern California and, as a retirement coach and Designing Your Life coach, he helps people discover What’s Next after their primary career.

Freedom is Just Another Word for … Retirement

Retirement Wisdom · Jun 30, 2019 ·

by Joe Casey

When Can I Retire?

It’s a harder question today. And it’s less often triggered by a specific date or age – or even a number. It’s more about your readiness. The essence of retirement is freedom. If you’ve earned the freedom to retire, you can taste what it will be like to have the time to do what you want – when you want to. How to structure your day in retirement becomes an inspiring, creative exercise with tons of possibilities. But when will it be the right time for you to walk away? When you’ve built enough financial security to walk away and live on your own terms. When you graduate from the grind to a different lifestyle. When you want time to focus less on pursuing the outward markers of success and more on the other ways you’d like to invest your time.

Readiness is your personal judgment that you’re ready financially and emotionally. It starts with achieving the financial assets to have the security and freedom to retire, but it’s also about the question How will I use the freedom that retirement offers? It’s also about assessing how ready you are to adjust to retirement, let go of many things from your career-focused days, and re-invent yourself in your next chapter.

Are You Ready for Retirement? Take time to assess your readiness financially - and emotionally. Share on X

Is Your Retirement Planning Balanced Enough?

There are many resources to help you save and invest for retirement, but there are few good resources to help you focus on how to retire well. The traditional supporting structures for retirement have eroded and there’s no roadmap. You have to chart your own course. So retirement planning concentrates on the financial side – until you’re in it and the other side of retirement emerges. You learn quickly that retirement is about both your money and your time.

How Ready Are You to Adjust?

We see that people are often surprised by aspects of the transition to retirement that they hadn’t fully considered. And they can limit freedom until they’re worked through. Many of these are rooted in things that are easily taken for granted while we’re working – and are sorely missed once we’re not. Here are a few areas to prepare for:

Professional status and identity. Retirement can lead to a loss of status. Research done by Michelle Pannor Silver at The University of Toronto illustrates how the transition can be especially challenging for people. [1]

Purpose and meaning. Work can define purpose – and stepping away can lead to feeling adrift. Kicking back and relaxing sounds great, but people can feel empty when goals have been removed from their life. Freedom from work can be thrilling at first, but 20 to 30 years is too long a stretch for vacation mode, especially with early retirement.

Loss of structure. Working life provides a framework for how we spend our time. It becomes part of the background and we don’t have to think much about it. Moving to blank slate each day sounds exciting, but some people struggle with defining their own structure and creating a new rhythm for their days, weeks and months. How to structure your day in retirement becomes an important task and affects your engagement and satisfaction.

Isolation. Retirement changes social relationships. That demanding boss? Those unreasonable clients? Those annoying co-workers? You may not miss all of them, but you may miss the level of interaction. Some people struggle to create new social relationships, especially men, who may not have tended to their social networks outside of work.

Experiment With New Ways to Use Your Freedom

Once you’ve dealt with the core issues in transitioning to retirement, it’s time to optimize your freedom. Contrary to what some may think, this doesn’t happen overnight. Here are a few places to start:

Pursue a new interest. Retirement provides a great opportunity for learning and mastery. Take up something you’ve always wanted to learn about – or take something to the next level. Start small. Take a course. There are more options available today than ever before.

Return to an old interest. Over the years of a career, some people put something that was a keen interest earlier in life on the shelf. Is there something you always loved to do that you didn’t have time to pursue during your working years? Now you have the time to pick it up again.

Set new goals. Goals give us something to strive for. Set a few goals in different areas of your life. Start small, build momentum and track your progress. Then take it up a notch, or two, over time.

Get involved in something greater than yourself. As we age our sights often shift from attaining more success to significance. Have a cause that interests you? Get involved. It will also help you cultivate a new social circle.

Cultivate a new purpose. Find places where your talents and experience can contribute to the greater good and perhaps make a real difference to someone. A new purpose can help provide inspiration, motivation, and direction. It can also be good for your health. A recent study at the University of Michigan of over 6,500 older adults in the U.S. highlighted an association between purpose and longevity.

Think twice before deciding if you can retire. Take care to make sure you’re ready financially and emotionally – so you can make the most of your freedom to retire.

Related podcast episodes:

You Can Learn a Lot from the Principles of FIRE

Preparing Well for the Soft Side of Retirement

What Unique Challenges Do People Who Love Their Work Face in Transitioning to Retirement?

Are You Ready to Follow Your Own Path in Retirement?

References

[1] Silver, M. P. (2018). Retirement and Its Discontents: Why we won’t stop working, even if we can. Columbia University Press.

[2] Alimujiang, A., Wiensch, A., Boss, J., Fleischer, N. L., Mondul, A. M., McLean, K., … & Pearce, C. L. (2019). Association Between Life Purpose and Mortality Among US Adults Older Than 50 Years. JAMA network open, 2(5), e194270-e194270.