Social media often glorifies the idea of early retirement a little too much. The idea is undoubtedly appealing, and the desire to retire early from the job market may be widespread. However, not everyone wants to retire early, nor is it suitable for everyone.
People often mistake financial independence for early retirement. Both are part of the FIRE (Financial Independence, Early Retirement) concept, but they are not the same. If you have “enough” money to be financially independent, early retirement is an option you can consider. But you don’t have to choose it.
So if you don’t want to retire early, that’s totally fine. But given the new realities of the employment industry, what do you do if you are forced to retire early?
Imagine you are 52 years old and plan to work until you are 60-62. Suddenly, you are fired by your employer (for various reasons: availability of younger, lower-paid employees, lack of modern skills, technological or industry disruption, etc.) . Considering your age and experience, finding a suitable job will be very difficult.
This is really dangerous. Even if you are not aiming to retire early, you may be forced to retire early. And this is reason enough for people to plan and prepare for early retirement, even if they don’t want to.
And the possibility of being kicked out of a job at a not-so-young age and having difficulty finding another job isn’t the only scenario. There are other such possibilities.
You are healthy now. However, things could change. If your health problems make it difficult to continue working in the future, you may need to plan for early retirement. I know several people in their early 50s who have had to quit their jobs due to health issues. They always wanted to work until their 60s. As always, your health ultimately determines how your life turns out.
Another possibility, although not as dire as the previous one, is that one day you will grow tired of the job or job description you currently like. If you have the flexibility of knowing that you have enough money at that point, you can choose not to work, rather than being forced to do so because you don’t have the money.
So what should you do if you don’t want to retire early?
Let’s say you’re between 35 and 40 years old and don’t buy into the idea of voluntary early retirement. And you plan to work until age 60, or even beyond. In such cases, it may be wise to plan for retirement assuming that retirement (forced or regular retirement) will occur around his age 50-55. Of course, that means you need to save and invest more. But that’s okay. If you can do that given the current economic situation, you will at least have flexibility and a cushion should a forced retirement scenario develop in the future.
I often hear that early retirement is a privilege only for the rich. But whatever your thoughts, understand why you can’t work until age 60, even if you want to. If you think this idea has merit, prepare for some early retirement, even if you don’t plan to retire early. No one wants to be forced to do anything, let alone retire.
Just like in the game of Monopoly, remember that being forced into early retirement is like getting a “go straight to retirement” card. No passing “retirement”, no need to collect $200, just a lot of free time and less money than planned. .
Dev Ashish is a registered investment advisor and founder of Stable Investor.
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