Retiring early is a dream that many people have, but looking at the financial conditions of the world, it seems to be unlikely for it to happen for everyone. However, some people are lucky enough to have accrued enough retirement funds to retire early, allowing them to prioritize other aspects of their lives.
William Schantz’s Pro #1 – More Time to Yourself
Early retirement is appealing because it offers people a chance to stop worrying about work and their finances and prioritize the things that are most important in their lives. They could take up new and exciting hobbies, travel on a budget, or start their own business.
William Schantz suggests that if you choose to go down this route, you should have mastered your budgeting and have complete control over your finances.
William Schantz’s Pro #2 – Opportunity to Start a New Business
Many people become tired of working a standard 9-to-5, which can be draining on their mental health. For this reason, it is worthwhile to consider retiring early so you can focus on building something you own. This is especially useful if you have laid out the processes and systems already, so you don’t have to start from scratch.
William Schantz’s Con #1 – Decline in Health
Early retirement can be bad for your mental health because your career provides meaning and direction in your life. Once you take that away, life can become mundane and monotonous, leading to greater chances of mental and physical health problems, especially cognitive decline. William Schantz suggests people think carefully about their early retirement plans, especially if they don’t have an active social life.
However, he also points out that people with meaningful connections in their lives are less likely to suffer from mental health problems, so it is something that can be built over time. Additionally, your previous job may have involved you being active and on your feet the entire day. If that suddenly gets taken away, you might suffer ill effects from early retirement.
William Schantz’s Con #2 – Retirement Savings Will Have to Last Longer
Older adults who retire after 65 will need their retirement savings for fewer years than someone who retires at 45. If both people live until 85, the former’s funds will need to last 20 years while the latter’s savings must last four decades. This means that people considering early retirement must have much money saved up to the last half of their life. Early retirement makes it difficult to contribute to a 401(k), meaning you will have less money at your disposal. Similarly, living expenses will probably rise over the years, which people cannot accurately predict since it depends on unpredictable factors.
Although you can make a case for both aspects of early retirement, the truth is that retiring early is extremely difficult unless you’ve accrued a lot of money. It also means you will have to be mindful of your expenses for many years and cannot rely on a stable disposable income for your wants and needs. William Schantz encourages people to consider these pros and cons carefully before making a decision that ultimately changes their lives.