A while back an old blogging colleague of mine named ESI Money wrote about 10 downsides of early retirement.
Yesterday, Joe from Retire by 40 shared his biggest downside to early retirement. I won’t give you any spoilers. However, when you finish reading it, you’ll see that last sentence was a bit of a pun.
Joe covered all ten of ESI Money’s downsides before giving his own thoughts. Since there are few original thoughts in the personal finance space nowadays, I’m going to blatantly steal the idea, while giving him great credit. It will help if you click on his article, so he doesn’t get mad at me. Just kidding, he’s too happy and nice to get mad.
Exploring My 10 Downsides to Early Retirement
Well first you have to retire early to have a downside, right? Depending on your definition of retirement I either retired at 30 or I will never retire. I like to say that I’m self-employed, but my life isn’t that much different than Joe’s who views himself as retired. Just to make it more complicated we aren’t sure if we are FIRE, leanFIRE, or FatFIRE . For the purpose of this article, let’s just assume that I’m retired.
Let’s look at each of ESI’s top 10:
1. Loss of Income
That’s a natural one. However, my wife has a military pension. We also have a lot of alternative income, which includes side gigs like dog sitting and blogging, along with rental properties and equities. In fact we should have more than $200,000 in annual retirement income with many of our expenses paid off. We don’t have that now, because we have about 8 years of rental properties to pay off. It’s also hard to get to the money in our retirement accounts at our age (43).
2. Reduced Social Security Income
My wife has been a big earner for a long time. I was for awhile, but not as long. I keep paying into social security with my side gigs. We don’t need this income and don’t plan for it, so it’s not a big deal. Last I looked it could be $50,000 a year combined.
3. Health Insurance
My wife’s military retirement comes with a very generous health plan that we can keep for life. We realize how extremely lucky we are to have this, especially in this day and age. We do have to pay for it and I’m sure it will get more expensive. However, it will surely be much better than what ordinary early retirees could get for the money.
4. Mental Decline
Here’s where it starts to go south. It would take a lot of work to be a good software engineer again (if I even was in the first place). I’ve spent the last 7 years focusing on interactions with babies and toddlers. I’ve spent the last 4 years sitting over 200 different dogs. While I have learned some very valuable skills that I treasure, the intellectual challenges are more about patience and understanding, not intense problem solving.
To help combat this, I’m trying to learn Japanese with Duolingo. I’m looking for more things that I can work in to windows of a few minutes of the day. I don’t get a lot of time to sit down and study anything at length.
5. Physical Decline
I’m getting older and that starts a natural physical decline for most people. I try to keep active with lots of dog walks. If I was full-time computer programmer, that wouldn’t be the case. I need to get back to going to the gym and lifting weights.
6. Loss of Social Interaction
This is a big one. I was never very social with my co-workers, but there were adult conversations. This goes back to my main conversations being about Pokemon and Daniel Tiger… or with a barking dog. There’s not a lot of deep peer friendships in my day-to-day life.
I didn’t lose these because of early retirement though. I feel I lost them through a series of moves, my introvertedness, and my old college friends just moving in different directions.
I’m hoping to build some new friendships with other parents through kids’ activities. So far, it hasn’t been very fruitful.
7. Loss of Identity
I very much feel this. I used to be a software engineer who built search engines. It was easy to explain and people understood it in just a few words. Now I’m unexceptional blogger, dog sitter, landlord, investor, customer support specialist, and corporate blog editor. I don’t know if they make a big enough business card for that.
I’m not even “retired” (except for this exercise) and my primary focus is on the kids.
I have no identity.
You’d think that with all the above that I wouldn’t be bored. If so, you’d be wrong. There are not a lot of “new” things going on in any of those activities. It’s not like I have a new assignment of a special project that requires me to learn a new skill. I suppose that blogging is always changing, but with all the other activities, I have some difficulty in keeping up with the changes.
I’m planning to buy a wet suit next year and take surfing lessons with the kids. The kids joined the Cub Scouts recently so we’ve got a camping trip planned. There are so many new and exciting things in this world, I just need to find them. Many FIRE bloggers love to travel. I don’t like traveling much. Also, it makes sense to wait until the kids are a little older before going to any distant countries. I would want them to remember it.
9. Spouse Overload
My wife already works from home a lot. However, sometimes we do need our space. She’ll go off on a run. I’ll go blog at the library for a bit. We have some different interests, but we share many too. If she weren’t working from home, it might be different. For now we each do our own thing for most of the day.
10. Lack of Challenge/Purpose
This is a little like the identity question above. I did have a good professional challenge in exposing MLM fraud. Unfortunately, we don’t have the freedom of speech in the US that we are taught in school. It’s only available to those who have 3 or more million dollars that they can blow on lawyers.
After being sued several times (and winnning!), I’ve decided that it simply isn’t worth the stress and potential harm to our family. So one of my passions, helping people avoid financial fraud, was thwarted. There’s a happy ending though. More and more media publishers are taking up the cause and awareness of MLM fraud is at an all-time high.
I haven’t found my next true professional passion project. Of course, I have the passion project of the family and teaching my kids new awesome stuff about life.
That’s a very worthy purpose, but it is different from the glitzy career of search engine software engineer or pyramid scheme activist.
Putting it All Together
Early retirement may not be as easy as you think it is. I imagine that’s even more true if it’s pseudo-retirement like mine. If you won the lottery and can hire out all the help you need, that’s a different story.
I’m still hustling quite a bit with all the jobs I’m doing now. As you can tell, there are gaps in my overall happiness, but that’s normal.
Everyone’s early retirement is going to be different. If you are not financially secure, I can tell you that the grass is certainly greener on this side of the street. However, there are at least 50 shades of green and sometimes it can be difficult to compare two.