Monday, December 6, 2010

How Irreversible is the decision really?

When discussing early retirement with friends and acquaintances, I sense that in their minds this decision feels irreversible. As in, if you choose to give up your work and take up early retirement and it doesn't work out for whatever reason, you are completely done for.

I know this feeling well. This feeling of going down a one-way street. But this thinking is not fully correct. Sure, there are certain aspects to quitting a regular job that have long term consequences. But that is not the full story.

Let's tackle the biggest fear that comes up in any discussion first. What if one runs short of money? The fact that you won't be earning a salary, but might need some money (for unforeseen circumstances) can be scary. Fortunately, this can be mitigated with some planning and foresight.

People who have only worked full-time don't seem to fully appreciate the range of options that are available. Options like taking up part-time work or consulting or freelancing. It will initially take some time, but these can be a real possibility if you keep your skills fairly current (always with an eye on staying employable).

There are, however, certain things that are difficult to get back, if you do quit mid-career. Irreversible is too strong a word. What I really mean is "difficult to reverse." For example: If you were progressing rapidly on a career-path, it might be difficult to regain that if you take a long break. Or, say you are part of a great team that is doing excellent and engaging work. If you quit that, you may not easily find that sense of camaraderie and purpose again. Also, if you are currently very well compensated, it won't be easy to attain comparable compensation after a 2-3 year break doing something else. (Individual cases vary, of course)

So there are both aspects to the decision of quitting a full-time job. What feels scary is not really the irreversible part. But the difficult-to-revert aspects do have to be considered before any decision regarding early retirement can be made.


Classof65 said...

I had no choice. A competitor purchased the company and, suddenly, several hundreds of us became redundant.

I interviewed and interviewed to no avail. I lived on my husband's salary (half of our income lost immediately) and unemployment for as long as it lasted. Then my husband became redundant as well.

We sold our house, making a rather large profit, moved to a state where our money should go further. Then the bottom fell out of the housing market and the stock market. The savings we have to live on is not stretching as far as we thought it would. There are no jobs here at all, not even fast-food jobs. I'm now getting Social Security at the lowest rate. We'd like to sell this place and move back to where we were, but MUST get our money out of this place -- and doubt we can. We're stuck in a state where we know no one and we'll probably run out of money before we run out of life. We're scared.

Anonymous said...

I had an interesting conversation about this yesterday. Essentially, my back-ups came down to my not wanting a desk job again, but being willing to either (a) run the ship with a startup, or (b) do something fun, like work on a construction site.

Anonymous said...

Retiring now versus retiring at sixty-five would be tremendously more expensive, not only because I would need to support myself for a longer period without a working salary, but also because my desired retirement lifestyle would involve many more expenses. As the conventional sixty-five-year-old retiree, I'd move to a North Carolina retirement community, likely a Charlotte retirement community. But as a much younger retiree, I'd want to travel extensively, not only to America's most exciting places but to the most beautiful, historical and diversely cultural places in the world!