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Reader Question: What's All This Talk About Early Retirement Print E-mail
(4 votes, average 5.00 out of 5)
Personal Finance - Retirement
Written by livecheap staff   
Friday, 26 March 2010 03:03

A question from reader Chris, "A theme that I see in LiveCheap's articles is the notion of being able to retire early. I don't want to retire early and many others I know are of the same opinion. Why the focus on early retirement."

Chris, great question. Many people are quite happy working and have no interest in stopping early. The point is that you have the option to do so when you live cheaply. While you might think that working is great when you are 35, when you hit 50, you might not be of the same mind. Having choice is one of the key benefits to building up a solid net worth. What happens if you hate your boss when you hit 50? Or maybe you just want to work in a more rewarding but lower paying job. If you haven't been living below your means, you don't have that choice.

There's also another reason. Early retirement isn't always an option, sometimes it is forced upon us. Being 50 plus years old and hunting for a job is difficult especially in a down economy. So if you are "offered" an early retirement package or your retirement is created by a layoff, you won't sweat it if you know that you are set for the rest of your life.

Thanks for the question, and keep them coming!

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frugal nomad |2010-03-24 07:09:39
I think that there is another reason you should always make provisions for early retirement - your health. You never know what shape you're going to be in when you hit your fifties. And it's not just your health that factors in. You'll be surprised at how many people are forced to drop out of the workforce to take care of an ailing parent. That's hard work and even if it's a labor of love - you still don't get paid when you do it.

People change, circumstances change and your outlook on life changes. Maybe you won't want to wait till your feeble and in your seventies before you venture out to see the world.

There is something to be said for retiring while you're in good enough health to do all the things you missed doing.

The underlying assumption of your question is that retirement means sitting in front of a television and clicking the remote control. You'll be pleasantly surprised at all the other things you can do in retirement. I've been early retired for going on eight years and I can't find enough hours in the day.

There is another thing - you're also making the assumption that when you retire - you step out of the work force for good. Not so, you can re-enter. I have this thing about "periodic retirement" - work a year - take a year off.

It's all about having options in life - the kind of options that make you a free man doing what you want to do when you want to do it.
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