Do You Want To Retire Early?
Retiring in your forties or fifties to spend time on a beach or in the mountains sounds exciting, but it requires proper planning and financial assets. Of course, financial assets are crucial to a successful retirement, but, more importantly, you need to be emotionally prepared to retire.
Leaving the workforce may be complicated if you've been working for several years. If you're contemplating early retirement, here are a few ideas to help you make a more informed decision.
- Give retirement a practice run by taking extended vacations or sabbaticals. Disconnect from your office, turn off your phone and enjoy your time off. Visualize retirement.
- Research possible retirement destinations, including your hometown. Create a spreadsheet of things vital to you and your family. Do the cities have what you want? Entertainment? Sports? Outdoor activities? Airports? Healthcare?
- Visit cities where you might retire. Book a flight to Laguna Beach, Austin, Estes Park, Bend, or Martha's Vineyard and give the town a tour. What do you like? How are the restaurants? Are the homes affordable? Is the city easy to navigate?
- Is your new town politically aligned with your thinking? Is your state red or blue? Do you want to move to a town where you're a blueberry in a cherry pie? Or vice versa?
- What is the tax environment in your state? Does it have a state income tax? Moving from Texas to California or New York would cause your taxes to rise. Oregon has a steep estate tax; Wyoming does not.
- How's the weather? The heat in Texas is brutally hot, and the winters in Connecticut are wicked cold. Other than San Diego, not many cities have pleasant weather year-round.
- Talk to your friends who are retired. Use them as a guiding light – a beacon. Ask them about their experiences. What would they change or do differently? How do they spend their days?
- Do you have hobbies that will occupy your time and keep you physically and mentally sharp? Do you want to play pickleball by day or bridge by night?
- Can you volunteer your time to help others? Non-profits, schools, and hospitals need volunteers and mentors. Dedicating a few hours a week to help others is good for the soul. Volunteering may also give you a purpose.
- Is your identity wrapped up in your business? Does your career define who you are? If so, you need to practice divorcing yourself from your job because you're no longer a banker, teacher, doctor, or police officer once you retire.
- Do you have a tribe? Are you connected to people in your neighborhood? Friends and family are an essential part of your retirement team. If you move to a new city, you'll need to develop friendships and connections by joining a church or other organizations. Don't fly solo in retirement.
- Write about your hopes, dreams, fears, and concerns. Keep a journal of your thoughts as you approach retirement. Document your journey. Committing your thoughts to paper is therapeutic, liberating, and emotionally rewarding.
Retiring requires a long emotional runway. It's a journey. With proper planning and preparation, your odds of a successful retirement increase. On the other hand, if you quit cold turkey, it may be challenging to transition to a fruitful retirement. Also, if you retire from your vocation to start another job, you're not retired; you just changed employers.
Early retirement is an important decision and requires a long emotional runway, so start planning today, so you can retire on your terms.
Retirement is not the end of the road. It is the beginning of the open highway. ~ Anonymous
September 10, 2021
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor.