Early retirement.
It’s the holy grail of personal finance, isn’t it? Entire communities have sprung up around the idea, fuelled by promises of cocktails by the beach, no money worries, and the ultimate dream: the freedom to choose how to live your life.
It’s alluring, I’ll admit. But it never appealed to me. I can’t help but wonder if we’ve romanticised early retirement to the point of ignoring its downsides.
The glossy vision of retiring at 40 or even 30 may dominate social media feeds, but beneath the surface lies a set of counterfactuals that rarely get discussed.
What happens after the novelty of freedom wears off? What are the hidden costs of bowing out of the workforce decades early? And, most importantly, is early retirement the key to a fulfilled life?
Let’s examine what might lie on the other side of this so-called dream.
Early Retirement and the Loneliness of the Unstructured Life
At first glance, retiring early seems like the ultimate freedom.
No alarms, no deadlines, no bosses breathing down your neck, no stress. But remember that Janis Joplin said that ‘freedom’s nothing left to lose’?
There’s a darker side to all that freedom: the crushing weight of an unstructured life. When you’re employed and working, your days follow a natural rhythm. Your responsibilities lend a sense of purpose, even if you don’t always take pleasure in them. In retirement, as I have been learning, that rhythm vanishes, and its absence can be disconcerting.
Imagine waking up each day with nothing you must do.
It might sound blissful, but you’ll find yourself adrift after a few weeks. Without meaningful activities to anchor your time, days blur into weeks, and the joy of leisure fades into monotony.
You need to plan carefully for early retirement.
Sure, you can travel, pursue hobbies, or volunteer, but even those pursuits can lose their shine when they are no longer breaks from the grind but your everyday reality.
Retirement and the Loss of Identity
Work isn’t just about earning money; it’s a significant part of who we are. Whether we love or hate our jobs, they provide structure, social interaction, and a sense of accomplishment.
When people retire, particularly young ones, they often struggle with losing their identity. Who are you when you’re no longer a teacher, a doctor, an entrepreneur, or whatever it is you’ve built your career around?
For early retirees, this loss can be even more pronounced. Your peers are still working, achieving, and contributing. Conversations about professional growth or shared challenges can feel alienating when you’ve opted out of the workforce.
It’s not just about what you leave behind but about the sense of relevance and connection that vanishes when you no longer share the same experiences as those around you.
The Myth of Endless Leisure
Another unspoken truth about early retirement is that leisure isn’t as fulfilling as we think. After working hard all your life, lounging on a beach or binge-watching Netflix might seem like the ultimate reward.
However, the human brain craves challenges, stimulation, and growth. While leisure is enjoyable in short bursts, it doesn’t fulfil those deeper needs.
Counterfactuals provide a stark perspective here. What are you left with if retiring early means giving up decades of opportunities to learn, grow, and achieve? You might have more time, but that time is only meaningful if you use it to pursue something of value.
And if pursuing value means building or creating something, isn’t that just another form of work?
Financial Freedom or Financial Fragility?
One of the arguments for early retirement is financial independence. But the financial reality of retiring young isn’t as rosy as many would have you believe.
Retiring at 40 or earlier means you’re relying on savings and investments to last not just 20 or 30 years, but potentially 50 or more. That’s a long time to live off your nest egg, especially with inflation, market volatility, unexpected expenses in the mix and geopolitical turmoil.
And here’s a question few early retirement enthusiasts ask: what if you get it wrong? What if your investments underperform or you face unforeseen financial pressures, like medical bills or supporting loved ones? The financial safety net that comes with a steady income disappears in early retirement, leaving you more vulnerable than ever.
The Problem with the “Retire Early” Narrative
Another issue with the early retirement movement is how it frames work as inherently negative.
Certainly, we all fantasise about escaping difficult bosses, stressful deadlines, and the daily grind. However, work is so much more than that. It serves as a source of learning, collaboration, and contribution. The narrative suggesting that we should all be racing towards an exit overlooks the satisfaction that many individuals find in their careers.
The irony is that most people who successfully retire early don’t stop working. They pursue passion projects, start businesses, or find other ways to stay engaged. In other words, they return to some form of work, but on their own terms.
So, is it really retirement, or is it simply a shift in how they work? And if that’s the case, why demonise traditional careers in the first place?
The Opportunity Cost of Checking Out Early
Perhaps the greatest downside of early retirement is the opportunity cost. By retiring in your 30s or 40s, you’re opting out of decades of potential growth, achievement, and contribution.
Think about all the relationships, challenges, and milestones you might miss by leaving the workforce early. What about the chance to mentor younger colleagues, build something lasting, or make a difference in your field?
There’s also the financial opportunity cost. The years between 40 and 60 are often the most rewarding of a person’s career, as experience and expertise compound over time. By retiring early, you’re potentially walking away from your peak earning potential—not to mention the power of continuing to invest and grow your wealth during those years.
Redefining Retirement
So, where does this leave us?
If early retirement isn’t all it’s made out to be, what’s the alternative? Perhaps it’s time to reconsider what retirement truly means. Instead of viewing retirement as an escape from work, why not consider it an opportunity to craft a life you love that balances purpose, leisure, and growth?
Maybe you don’t need to retire early to find freedom.
Maybe you need a career that aligns with your values or a way to work fewer hours while contributing meaningfully. Perhaps the real goal isn’t to stop working but to stop working in ways that drain you.
Retirement, whether early or traditional, shouldn’t be about abandoning work. Retirement it should be about finding fulfilment.
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Early retirement might sound like the dream, but it’s not without its pitfalls.
The loss of structure, identity, and financial stability can outweigh the benefits of free time and independence. And while it’s tempting to idealise a life of endless leisure, the reality is that purpose, challenge, and growth are what truly make life fulfilling.
Instead of rushing towards an exit, why not focus on creating a life you don’t need to retire from?
Build a career that excites you, pursue passions alongside your work, and find ways to balance your responsibilities with your dreams.
Retirement isn’t the destination—it’s just one chapter in the story of your life. And maybe the best chapters are the ones you write while you’re still fully in the game.
Photo by Zac Durant on Unsplash