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The dream of retiring early to pursue your passions and freedom is appealing to many. But it requires both financial and lifestyle planning to evaluate your ability to support your lifestyle for what could be half a century or more.   

There are many pros and cons to early “retirement”, which is increasingly being referred to as your “second life”: 

Pro: More Time for Leisure & Travel 

Retiring early, such as in your 50s or 60s, provides ample opportunity to realise deferred dreams and activities whilst having the physical ability to do so. You may wish to travel extensively, pick up new hobbies, spend time with family or indulge personal passions.  

Con: Risk of Lack of Purpose and Meaning 

Adjusting from the “busyness” of work to a less structured early retirement lifestyle can be challenging. Some retirees report boredom, loneliness, or lack of daily purpose. Routine is important, along with staying socially and intellectually active. 

Have a plan for how to spend your time meaningfully for others. Structure days with pursuits and relationships that provide fulfillment beyond just leisure alone. Find new ways to contribute or volunteer. 

Pro: Quality Time With Family

By retiring early while still energetic, you can play a more active role with grandchildren, aging parents or other family members who may need support. Pursuing favourite pastimes together also nurtures relationships.

Rather than waiting until old age, an early retirement allows you to share your time and wisdom with loved ones more fully. The family bonds created are invaluable. 

Con: Loss of Professional Identity

Work provides not just income but also a sense of identity, achievement and social connections. Losing your professional status can negatively impact confidence and self-worth. Pursuit of passions and service outside of work aids the transition to retirement, whenever that may be. 

Also, nurture workplace friendships via regular meetups, volunteering together, or joining hobby groups. Filling the social gap left by leaving your career eases the adjustment. 

Pro: Flexibility to Pursue a Vocation 

Early retirement provides the flexibility to pursue a career based on passion rather than financial need. You may launch a small business, pursue consulting or freelancing, or get involved with an organisation doing good. 

Having a clear vision for this next chapter helps ensure fulfilment. The balance of freedom and newfound purpose can be highly rewarding. 

Con: Affordability Challenges 

Exiting the workforce decades early is only realistic if you build substantial retirement savings. To withdraw income for a 30–40-year retirement requires a sizable nest egg along with supplemental income streams. Early retirement dreams often shatter when assets can’t support the extended timeframe.

To make early retirement feasible, financial experts suggest having at least 25 to 30 times your anticipated annual spending in retirement savings. Aggressively saving early in your career gives the highest probability of success. Assess savings shortfalls honestly. 

Pro: New Chapter for Dreams & Passions 

At the core, an early retirement is about pursuing long-deferred goals and ambitions outside work. You finally have the freedom to write that novel, learn to sail, fix up your dream home, start that business – whatever stirs your passion. It’s about re-imagining life on your terms.  

With vision and determination, an early retirement presents possibilities to reinvent yourself and your days with purpose and joy. 

While early retirement has its challenges, for those able to prepare financially and envision a fulfilling next chapter, the pros can outweigh the cons. Assess your motivations, run the numbers, and seek guidance from those who have successfully charted this path. Prioritise what matters most in your vision of life after work. 

At Fiducia, our multi award-winning team of Chartered Financial Advisers can help you reach your goals in a timely – tax efficient – fashion. To have a free initial discussion with a member of our team, contact us below.