Personal Finance

I'm ready to retire but having a hard time pulling the trigger because I know I won't be making any income

Rich Duprey

Published: December 3, 2024 2:30 pm

We all look forward to quitting the rat race and retiring, but letting go of a steady job and living off our savings isn’t easy. Suddenly, a lot of things are beyond our control and we have to convince ourselves we did it right.

That’s the situation a Redditor finds himself in on the r/ChubbyFIRE subreddit. He’s 53 years old with a wife and four college age kids. Although he’s certain he can do it, the Redditor still finds it difficult to pull the ripcord.

24/7 Wall St. Key Points:

• Retiring early is a goal many would like to achieve, so don’t give in to the fear this big change represents.
• Plan early for your future so you can hit the ground running.
• Understand the hurdles you face before you make the leap, so confronting them won’t be big a challenge.
• Also: Are You On Track to Retire? Take This Quiz and Find Out ^(Sponsored)

Get ready to make the leap

Quitting a job is not just turning in your resignation letter. It involves facing new financial considerations and lifestyle changes. But many individuals become fearful when thinking of leaving a job behind. The security of a regular paycheck, health benefits, and retirement contributions create strong attachments to employment, which make the decision daunting.

Primarily is the fear of the unknown. You question your financial stability, health insurance, and even social connections in early retirement. For some, there is a loss of identity because work is a significant part of who they are. Quitting a job can result in doubt about one’s self-worth. Since success is often associated with career advancement and financial achievement, we hold back for fear of being judged by peers and family.

The challenges of early retirement

Transitioning to retirement presents unique challenges. What we imagine retirement will be and what reality is can be dramatically different. 

Financial considerations are top of mind. Retiring early means relying on savings and investments. Ensuring they last throughout our retirement requires careful planning and management. Early retirees must be prepared for market downturns and the impact inflation will have.

There is also the well-grounded concern over ever-rising healthcare costs. Not having access to employer-sponsored health insurance means navigating the complexities of choosing an affordable plan that can drain our finances, time, and well-being if we choose poorly.

Also, without work, people may struggle to fill their time meaningfully, so developing hobbies, interests, and social connections is essential. 

The ChubbyFIRE lifestyle emphasizes a comfortable yet mindful approach to spending. Striking a balance between enjoying life to the fullest with managing our expenses can be difficult, especially when we’ve previously been able to indulge ourselves.

Overcoming the obstacles

While quitting a job and retiring early can seem scary, there are strategies to successfully navigate the transition to a life of leisure.

• Create a detailed budget. Develop a budget that outlines your expected expenses in retirement, including housing, healthcare, and leisure activities.
• Build an emergency fund. An e-fund was essential while working, now it is critical. Continue to save at least six to 12 months of living expenses to cover unexpected costs.
• Continue to invest. Our portfolios won’t be as aggressive as when we were younger, but diversify your assets to mitigate risks. I’m not a financial planner, so these are just my opinions, but consulting with a financial advisor can provide valuable insights into creating a sustainable retirement plan. It may give you peace of mind, too.

Put your head in a different place

It is necessary to accept that retirement is a significant life change. Having a positive attitude can help ease the adjustment period. Remind yourself why you are pursuing early retirement. Spending time with family, traveling, or undertaking hobbies can be incredibly rewarding.

Use your new-found freedom to explore interests you previously ignored as it can create a sense of purpose and fulfillment. 

Also, set goals for your retirement years. Whether it’s traveling, learning new skills, or volunteering, it can provide you with a source of motivation. 

Key takeaway

While quitting a job and retiring early can be challenging, it is why you worked your whole life. By having a plan in place, your can ease your financial concerns while maintaining a positive outlook. 

At worst, if you find your plans weren’t as solid as you thought, you are still young enough to return to the rat race. But no one wants that, so plan accordingly and be ready to enjoy the next stage of your life.