When it comes to early retirement, the concept is filled with myths and opinions about what it is supposed to be like.
Most of these are propagated by people who either have not retired early or never intend to. These are not the people you should be taking too seriously then.
So, what exactly is early retirement like and is there any truth to the myths you might have heard?
It is time to debunk some of those early retirement myths and get to the reality of it.
Early Retirement Myth 1 – Early Retirement Has a Standard Definition
Reality – No Two Early Retirements will look the same. Everyone has their own unique journey.
We all seem to crave for certainty and hate ambiguity. We love putting things into set boxes.
As a result, people end up making these rules and definitions of what an early retirement is supposed to look like.
Here is the thing though – There are no set rules or definition of early retirement. You get to choose what your early retirement looks for you.
No one else must define it for you.
You want to volunteer for no compensation in your early retirement – Absolutely.
You want to work part time in early retirement – Sure, that works too.
Just want to spend time with your dog all day – That is wonderful. Enjoy it.
Given that no one forced you to pick early retirement, you don’t need to let anyone else tell you what it is supposed to look like.
Don’t worry about the internet police telling you what you can or cannot do. You no longer must care about what people think or say. Let them stew in their own heads.
It is your early retirement and whatever makes it right for you is what you should do.
There is no standard definition of what an early retirement life is. Build you own life in early retirement and enjoy it as you deem fit.
Early Retirement Myth 2 – Early Retirement Will Solve All Your Problems
Reality – Early Retirement will only solve the problem of not having to go to a job you disliked.
If hating your 9-5 routine was your biggest problem in life, then surely early retirement will solve it.
Your second biggest problem in life will now become your biggest problem though. It could be a health issue, a relationship issue or something else.
That is what will now start to occupy your mind. That becomes your biggest problem now.
A 9-5 job may have helped to suppress these secondary problems under the surface. Leaving your 9-5 job will free up time in your schedule and your head.
That time will not stay unfilled once you retire early.
It can easily get overwhelmed by your second biggest problem if you are not mindful.
The good thing is that having more time at your disposal may help you to address some of these problems.
Retiring early from a job you disliked may lower your stress or give you more time to work on your health issues.
Spending more time with your loved ones can help to work out any relationship challenges. Of course, there is no guarantee that this will help but still.
Moreover, pursuing something in early retirement that you are passionate about could have a positive spillover effect into your other life challenges as well.
Early Retirement Myth 3 – You Will Stop Thinking About Money
Reality – Nope. Not going to happen.
Saving and investing money over decades is what gets you to financial independence.
You are fooling yourself if you think you can instantly stop thinking about money once you have reached your enough.
Even after you get over the one more year syndrome, your awareness about money matters will never leave you.
Every decision you make will still have you doing mental cost-benefit gymnastics.
Money and thinking about money become a part of you on your early retirement journey.
Instead of trying to force yourself to stop thinking about money just accept it as part of your personality now.
That will make it much easier to settle into a financial independence mindset in early retirement.
Money is a tool and continue to treat it as such. It is a tool that can continue to assist you even in retirement.
Early Retirement Myth 4 – It is Easy to Do Nothing After Retirement.
Reality – Doing Nothing is Really Hard to Do.
Remember Peter from Office Space?
“If I had a million dollars, I would do absolutely nothing”.
That is easier said than done though.
Early Retirement could drive you nuts with boredom. This is especially if you are a type A person who does a cold turkey move into early retirement.
Being driven, ambitious, and productive is what gets you to climb up the corporate ladder.
It is a myth to believe that you can give all that up in an instant once you retire early.
Yes, you can laze around for the first few months, but the itch to get productive will be back sooner or later.
They key to address this is to plan a transition into early retirement instead of just blindly heading into it. The preparation for early retirement should start years in advance.
Exercises to find your purpose, the pursuit of contentment, and taking a step back to look at the world all helps.
All these need to start while you are still at your 9-5 job. It absolutely does not mean that you give up on the idea of early retirement since you will be bored to death.
The key is to figure out what a meaningful life looks like to you that is aligned with your personal values.
Once you find out what an ideal life looks for you, you no longer will crave to be a productivity ninja just of keep yourself busy.
Early Retirement Myth 5 – You Can Switch from a Saving to a Spending Mindset in an Instant
Reality – Switching to a Spending Mindset is much harder than you think.
Saving and Spending are entirely different mindsets. You see this over and over across generations.
If you parents grew up in a household with limited means, you might have seen their struggles to spend in old age even when they had more than enough.
Saving is a way of life, a tool to make choices, and a lifestyle decision. It is what gets to your dream of financial independence or early retirement.
It is not a switch that you just flip off and flip on the spending switch instead.
The emotions that you will go through will be varied as you try to spend more. At times you may want to YOLO it all in just to get spending mindset going.
At other times you could be filled with the guilt of spending.
If you intend to leave a big inheritance, then spending money today can feel like stealing from your kids or grandkids.
So how can you get better with spending once you have enough?
Accept first that consumption for the sake of consumption will never be something that you will be able to do.
You do not have to consume more just because you can.
People who are on an endless consumption binge are not the ones who get to an early retirement.
Another thing that helps is to get a passive cash flow from your retirement nest egg.
Spending money where you are not burning through your principal is much easier to do.
Dividends, interest payments or rent are examples of such passive income streams.
Early retirement is a relatively niche and obscure concept for most people. That lend itself to all sorts of myths about what it involves.
Go out and talk to people who are already in early or even regular retirement. That will give you a fresh perspective as you frame your own opinions about it.
There is no standard type of early retirement. It is what you make it out to be.
Dushyant Choudhary is the founder of dushyantnomics, an early retirement blog for professionals. Dushyant retired early from his 9-5 corporate life after a successful international career. He brings his knowledge and experience to his current role where he’s dedicated to helping professionals achieve a fulfilling retirement.