Alternatives to Retiring Early

Winston Churchill, 65 years old in 1939, was the first to be involved in World War 2. He was in his prime years.

Ray Kroc was 52 when he founded McDonald’s. Harland Sanders, who was 62 years old at the time, founded Kentucky Fried Chicken.

Betty White’s major break came at 51 years old.

Nelson Mandela became the first president democratically elected of South Africa at 75 years old.

Stan Lee began publishing comics at the age of nearly 40.

Charles Darwin published On The Origin of Species at the age of 50.

Henry Ford created the Model T at age 45 and worked in the business up until the age of 82.

When I ask my new clients about their retirement plans, they often reply “tomorrow” with a smile.

Many people consider early retirement to be the pinnacle of financial success. It’s interesting because if someone was made redundant and found it hard to return to the workforce – an early retirement at a time that wasn’t their choice – then they are unlikely to be happy.

This week, I’d like to discuss a few alternative ways to retire early and why you may want to include them in your plans. You should go ahead and retire early if that’s what you want to do. If your ultimate goal is to lead a healthy and happy life, these options might be a good way forward.


Reflecting on the reasons why you want to retire early is a good place to begin. You’re miserable because you are in a stressful job that you can’t sustain. You may have a passion for a completely different field and wish to devote more time to it. You may want more time to spend with your elderly parents or grandkids.

We can help you find alternatives to early retirement that are easier and more enjoyable.

Consider first the situation of the high-stress role. This is something many of our clients face. Indeed, the job pays very well. But employers don’t give you those dollars because of your smile. This money is accompanied by a lot of pressure and expectations, which means you’ll only be able to maintain that intensity for a short time.

A sabbatical or extended break is a more effective solution than early retirement. Extended breaks are a great way to recharge your batteries and not leave the workforce. You can either resign, which will help you to let go of the stress, or take an extended break, maybe on half pay. You may find that after six or twelve months of not having to deal with the daily grind, you can reflect on your goals and decide that returning to a high-pressure role isn’t the best option. You may also miss the challenges of your previous job, your colleagues, or your sense of accomplishment.

What you do during this time can also be very interesting. I met a couple that spent two years traveling around Europe and creating a blog on vineyards. Another person I met volunteered for a non-profit organization for an entire year. My friend rode his bicycle down the West Coast of North America, from Canada to Mexico.

This is a great opportunity to reset your life. You can do this much earlier than you would like to retire.

If you are in a high-pressure role, you know that you won’t be able to sustain it until your 60s. If you plan to retire early, it may take ten years to accumulate a nest egg large enough to sustain yourself solely through investment income for 40 years. If you plan to take a break for a year and then decide what to do next, you can probably achieve this with a little planning.


What if you are unhappy with your job? You may be a creative person at heart, but Monday through Friday, you need to maintain consistency and precision. Maybe you are a people-person who is stuck at a desk all day staring at a computer screen. Career change is an alternative to early retirement. We explored this in the podcast last week with Kate and in other episodes. The most memorable episode for me was one I did with Tim, who changed careers from being a bank manager to a primary school teacher.

Career changes take planning. There is usually some training required, which costs money and may need time away from the workplace. With some financial planning, we can generally find a solution. Comparatively, taking two years off to return to school and learn a different career is easier than achieving an early retirement.

A career change can often have the opposite effect of early retirement. People tend to stay in the workforce later in life when they are faced with a new challenge. This will compensate for any short-term pain from retraining and lower wages as you start. A career change often involves a phase where you take one step back to make two steps forward. You should be aware of this, and we can certainly plan for it.


A second reason that I often hear about is the desire to retire early in order to spend more time with their loved ones. This includes caring for elderly parents and grandchildren. These two needs are both time-sensitive. When your elderly parents are in need of assistance, it is not a good idea to say, “let’s build an investment plan that will make this possible in 10 years”. It’s the same when you help out your grandchildren before they are of school age.

It is almost certainly more realistic to reduce your working hours than to retire completely. You can still earn enough money to cover your living expenses by reducing your work to just two or three days per week.

You can work longer if you reduce your workload to part-time. The extra years you gain can compensate for lower superannuation and other savings you would have made if you had stayed full-time.


Early retirement can be difficult. Early retirement can be difficult. Most of the sacrifices are made when you are in your prime health-wise and with your family. It’s worth it to work 12 hours per day in your forties so you can retire at age 50 when your kids are grown, and your fitness hasn’t improved.

Many people who retire early report mental health issues, such as loneliness, isolation, and a sense of lack of purpose. They often get bored.

You’ve likely heard me mention this before: a big part of our work for clients involves financial modeling and scenario analysis. We compare several different scenarios to determine the best way to proceed. Many people are surprised at how much a few extra years of work can improve their financial situation. Extra super contributions and extra years without any withdrawals from your super can make a huge difference to your retirement income and reduce your longevity risk.

If you want to retire at 50 with a $100,000 income per year, then you will need around $2.5 million in savings. To retire at 70 with the same income, you would need to save around $1 million less. Retiring at 70 allows you to enjoy your entire life.

Consider whether a longer break, a change in career, or a shift to part-time work could be an alternative to early retirement. This will allow you to enjoy a fulfilling and happy life.

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