10 *Downsides* to Early Retirement

[Please welcome back to the site today, John, aka “ESI,” from ESI Money and Rockstar Finance! We’ve lured him back after two years of retirement to share the negative sides of the early retirement coin (big thanks to reader Bill who prompted this!), and we hope this gives you a more fuller perspective on life after pulling the trigger… Since retiring early – or at all – isn’t always amazeballs!]


Last year I wrote a guest post for Budgets are Sexy titled 10 Things I Didn’t Expect in Early Retirement. The post detailed ten awesome things I had discovered about early retirement since taking the dive months earlier.

The article was picked up by Business Insider and created quite a bit of publicity. Its message is popular with a broad audience so BI runs it again every now and then. When that happens, a new wave of readers visit this site as well as mine.

A recent re-run of this post brought a new reader here who left this comment:

I know this is an old post, but I just recently found it in my news feed. I retired 9 months ago at age 47, and I have the same 10 surprises with little regrets, too. This is a great summary of how I currently feel.

But it’s NOT all just good surprises and there can be a dark side, so I would hope you could balance the positives with a few negatives to paint a clearer picture. Maybe you could do another post with a list of the potential downsides? I’m not talking about money concerns here: the top of my list is social isolation.

After receiving this comment, J. Money forwarded it to me and asked if I was up for a “one year later” post covering some early retirement drawbacks instead of the positives.

While I have not experienced much of any of the downsides associated with early retirement, I have followed the subject closely for years and realize there are some. With that said, I’d like to share ten early retirement downsides to consider as part of an early retirement decision. I’ll also include ways I’ve overcome some of these, plus suggestions for avoiding them.

And while the commenter wanted to focus on non-financial issues (and social isolation specifically), there are significant monetary downsides to early retirement. Leaving these out would make the post incomplete in my opinion, so my list will include both monetary and non-monetary downsides.

With that said, let’s get on to the list (in no particular order)…

#1. Loss of Income

Let’s face it, the reason people go to jobs they (generally) dislike and put up with all the politics, long commutes, brutal hours, and so on is because of the money. Very few people would “keep working even if they didn’t pay me.” Therefore, the loss of income has to be listed as a big downside for almost all early retirees.

Just the thought of losing an income is enough to stop potential early retirees in their tracks. My parents are an example of this. They would like to retire (not early, mind you) but my dad just “keeps thinking about all that money I’ll leave on the table.” At this point I’m not sure he’ll ever retire because he fears the loss of income too much.

Of course, anyone can plan to combat this issue through several means:

  1. Knowing your retirement spending needs
  2. Saving enough to cover expenses (i.e. drawing down assets to pay for retirement)
  3. Investing assets to generate income (real estate, dividend investing, etc.)
  4. Building in margins of safety into your financial plan.

But all of these require planning, self-control, and at least a basic understanding of personal finances. Many Americans are not so keen on any of these much less all of them.

To be honest, I considered this downside myself before I retired. I made a great salary for most of my career. During my 50’s alone I was set to cash in big-time. But the truth was, I already had enough a DECADE before I actually retired. I finally discovered that I could stop accumulating assets and move on. That said, I still wonder from time to time how I might have spent that few extra million dollars I gave up.

#2. Reduced Social Security Income

My financial plan is based on zero help from Social Security. If I get one penny from the government it will be more than I’m planning on.

But for those who need Social Security to retire early (or perhaps need it later in retirement), retiring early is going to put a huge dent in what you’ll receive.

Here’s a somewhat understandable explanation of how Social Security benefits are calculated:

All workers paying FICA (Federal Insurance Contributions Act) and SECA (Self Employed Contributions Act) taxes for forty quarters of credit or more on a specified minimum income or more are “fully insured” and eligible to retire at age 62 with reduced benefits and higher benefits at full retirement ages, FRA, of 65, 66 or 67 depending on birth date.

Retirement benefits depend upon the “adjusted” average wage earned in the last 35 years. Wages of earlier years are “adjusted” before averaging by multiplying each annual salary by an annual adjusted wage index factor, AWI, for earlier salaries. Adjusted wages for 35 years are always used to compute the 35 year “average” indexed monthly salary. Only wages lower than the “ceiling” income are considered in calculating the adjusted average wage.

If the worker has fewer than 35 years of covered earnings these non-contributory years are assigned zero earnings. If there are more than 35 years of covered earnings only the highest 35 are considered. The sum of the 35 adjusted salaries (or less if worker has less than 35 years of covered income) times its inflation index, AWI divided by 420 (35 yrs x 12 months/yr) gives the 35 year covered Average Indexed Monthly salary, AIME.

So if you work 35 years, your total is based on those years. If you work less than 35 years, your total is based on the years you worked plus zeroes averaged in for the years you didn’t work, dramatically lowering your benefits.

As an example, let’s say Joe worked 35 years and averaged $50,000 in income those years. His Social Security would be based on that $50k average.

Now let’s say Joe’s twin, Jim, retired early. He worked 20 years at $50k and the other 15 years at $0. Jim’s Social Security would be based on an average of $28,571 (($50k * 20)/35).

So if you’re going to need all the money you can get from Social Security, retiring early can be a significant downside.

#3. Healthcare Insurance Issues

Between my websites I have interviewed many millionaires over the years.

I changed the questions several months ago, and this was a recent question I added to the list:

Are there any issues in retirement that concern you?

Almost every single one of them mentions health insurance. And these are millionaires! If they are worried about affording medical insurance, how does the rest of the world stand a chance?

Retiring early further aggravates the issue because there are limited options prior to Medicare.

Insurance under the Affordable Care Act is not affordable for most people with even an average income. Others don’t like the criteria imposed by alternatives like health sharing ministries, are concerned by their ability to pay, and/or don’t qualify (they often mandate the insured avoid several activities that are known to cause health issues, like smoking).

We have used a health sharing ministry since I retired, pay a fraction of what we would under the ACA, get better coverage, and have seen it pay out for us. I know many others who have similar testimonies from other health sharing companies.

Some other options that have worked are healthcare coverage locked in by time of service (like in the military, or provided to teachers in some school districts), one spouse keeps working to provide insurance, or taking a basic job just to cover health insurance (for example, with Starbucks).

However, there are few alternatives and all come with as many problems as solutions. It’s clear why millionaires and any other early retirees would be concerned about this downside.

#4. Mental Decline

You’ve probably heard the phrase “use it or lose it.” Well, it appears that this could be the tagline for our brains as well. And early retirement could be just the thing to turn our minds to mush.

Consider this from the UK:

New research shows that brain function declines rapidly as soon as people stop work and put their feet up.

A major British study which tracked 3,400 retired civil servants found that short-term memory declines nearly 40 percent faster once employees become pensioners.

It appears that the lack of regular stimulation takes a heavy toll on cognitive function and speeds up memory loss and dementia, researchers warned.

In other words, if you don’t use it, you’ll lose it.

It’s a wonder that the retirees of old survived past a couple years with all the leisurely pursuits (like TV, bowling, etc.) they pursued after quitting work.

Obviously there’s a great solution to this: Keep learning and growing. Try new things. Challenge yourself.

Most of the early retirees I’ve met aren’t sitting at home eating Twinkies and watching Game of Thrones for the fourth time. They have passions and pursue them. And many of their interests include brain-enhancing activities.

The past two years being retired have allowed me to participate more often in many activities that challenge my mind, including:

  • Reading more than ever (I’d include listening to podcasts here as well)
  • Buying a business and growing my personal site (EDITOR: Hope you’re enjoying it, buddy ;))
  • Managing my rental properties (limited time since I use a property manager, but I still need to stay sharp to keep them on their toes)
  • Playing more chess
  • Traveling more and learning along the way

And there are many other ways to keep your mind sharp. Here’s a piece from Harvard listing 12 ways to keep your brain young. Most of them have to do with getting and staying physically fit.

Of course, if your idea of retirement is lounging all day in front of a computer watching cat videos, you’ll probably have problems.

The key is that you need a plan to USE your brain so you don’t lose it.

#5. Physical Decline

Put this one in the “use it or lose it” camp as well.

Unfortunately, that’s not the only physical problem for early retirees. Here’s a summary of the issues from the Harvard Medical School:

A new salvo comes from researchers at the Harvard School of Public Health. They looked at rates of heart attack and stroke among men and women in the ongoing U.S. Health and Retirement Study. Among 5,422 individuals in the study, those who had retired were 40% more likely to have had a heart attack or stroke than those who were still working. The increase was more pronounced during the first year after retirement, and leveled off after that.

The results, reported in the journal Social Science & Medicine, are in line with earlier studies that have shown that retirement is associated with a decline in health. But others have shown that retirement is associated with improvements in health, while some have shown it has little effect on health.

In their paper, Moon and her colleagues described retirement as a “life course transition involving environmental changes that reshape health behaviors, social interactions, and psychosocial stresses” that also brings shifts in identity and preferences. In other words, moving from work to no work comes with a boatload of other changes. “Our results suggest we may need to look at retirement as a process rather than an event,” said lead study author J. Robin Moon, who is now a senior health policy advisor to New York Mayor Michael Bloomberg.

These changes may be why retirement is ranked 10th on the list of life’s 43 most stressful events. Some people smoothly make the transition into a successful retirement. Others don’t.

Understanding how retirement affects a large group of people is interesting, but doesn’t necessarily have anything to do with how it will affect you.

That last point is key. The results above are general, not specific. The group overall has these results but any given individual may be significantly better or worse off.

Basically, if you have plans that will keep you busy in retirement and you hated your job in the first place, retirement is probably going to be great for you.

If you have no idea what you might do in retirement, it might be rough on you (and your health).

Personally, retirement has been a huge win for me health-wise. I now have the time to workout six times a week and walk 15,000 steps a day. I hired a trainer and kept him the first year of retirement (I now have enough routines to keep me busy) and he whipped me into the best shape in my life.

So it’s like much of life: If you have a plan for positive change, retirement can be a great time filled with better health. If you have no plan and simply let life “happen”, it probably won’t turn out well.

#6. Loss of Social Interaction

Now we get to the issue brought up by the original commenter. Retiring often severs relationships (especially those around work) which is quite hard for many people. And much of the research above will back this up — loss of social interaction is a bad thing.

Personally, this is zero issue for me because:

  • I grew up as an only child to a single, working parent. Much of my childhood was spent alone and I actually like it that way.
  • My key relationships are with my family — both my immediate and extended family. Retiring early allowed me a year at home with my daughter before she went to college. It allows me to take two walks a day with my wife. It allows me to go to the movies with my wife and son in the middle of the afternoon (on discount day, of course). It allows me to call my mom more often and chat for longer. It allows my dad to visit without me having to dole out limited vacation time. In other words, the social interactions that are most important to me have vastly improved in retirement.
  • We retired in Colorado and when you retire here, people come to visit you. We have so many visitors every year. And we can actually spend time with them since I don’t have to work!
  • I see people in other places — the gym, at church, at neighborhood events, etc. If anything, I do MORE of these things since I’m not exhausted by work commitments. I remember not going to many neighborhood parties because I was too mentally exhausted from work or had to work the next day. Now I don’t have those concerns.
  • Work relationships were never my main social connection. Sure, I spent the most time with people at work, but it wasn’t like they were my family. They were great and I developed some close friendships, but I didn’t see work as a social club. It was WORK.

All that said, I know many people get lots (most? all?) of their social interactions from work and from friendships related (directly or indirectly) to work. So retiring early can be pretty hard for them.

To this group I’d offer the following ways to get their needed social connections:

  • Join a club. Cards, cycling, singing, whatever. Do something you like that involves others.
  • Go to a gym. My wife takes classes at our gym and has made several friends there.
  • Visit a church. Hey, they are supposed to be friendly to you, so take advantage of it.
  • Volunteer. Non-profits can use your time and experience.
  • Be more neighborly. Get out and meet your neighbors. Check out Next Door as there’s always something going on. If there isn’t, organize a 4th of July BBQ or Christmas party and invite everyone. We have both of those in our neighborhood, plus someone usually rents a bounce-house for Halloween which is the place all the grown-ups congregate to chat while the kids raid the neighborhood.

I could go on, but you get the idea.

Now if you’re the kind of person who doesn’t make friends easily, let me suggest you learn to do so. That’s a double win: it will be a challenge for your mind that will also satisfy your need for social interaction. :)

#7. Loss of Identity

I think it’s no secret that for some people what they do is who they are. Then when the job is over, they don’t know who they are any more.

They have spent 30 years at something that’s taken the majority of their time, effort, focus, energy, and whatever else they have. When that goes away, what’s left?

This is a tough issue for many and the only way through it is to find new activities to replace the time and meaning they got from work. These could be recreational (hobbies, traveling, etc.), volunteer (church, non-profits, etc.), or even occupational (a part-time job to help them feel productive again.)

Even so, if a person’s identity is so closely tied to a specific job (doctor, lawyer, teacher, etc.) and that’s gone, then it may be hard for them to get over the loss. If this is you or someone you know considering retirement, you may want to think long and hard before you retire early.

As an alternative, you may want to seek professional help if you think this issue will present a real challenge for you.

I liked my job, but it never defined me. I was a husband, father, and simply a person well ahead of being a business executive, so I never really dealt with this concern.

I also think this downside was more common in the past when people worked in one industry or for one company their entire working lives. As that has changed, I believe those who connect so closely with their profession for it to be a major retirement issue has declined as well.

#8. Boredom

I know. This sounds like an angsty adolescent. “I’m bored!”

This is a downside that’s similar in cause to the last one: it impacts those whose work is such a large part of their lives.

For some people, work is their life. They eat, sleep, and breathe work. As such, they develop few (if any) outside interests.

Once work is gone some lose their identity, some grow bored, and some experience both.

Of course the solution to this is to develop some outside interests. And better yet, these interests should be considered/explored prior to retirement to see which ones stick and which ones aren’t of interest.

I worry about my dad being bored. Most of his life has been about a few things: work, watching TV, and a trip out to eat/shop once a week. I have never seen him read a book and only occasionally look over a magazine. He has no hobbies. When work is gone for him, what will he do? It’s a very good question.

Even if your interests are a bit broader, boredom can be an issue. You can only watch so much TV, play so much golf, and read so many books. You have to have other interests or retirement will be B-O-R-I-N-G.

On the other hand, if you have a list of things you’d like to do or try, then retirement will be a blast.

Here are some of the things I’ve added since I retired:

  • Exercising more
  • Spending more time on my websites (including buying a new one)
  • Traveling more. I’ve been to Grand Cayman, DC twice, Seattle, Portland, Dallas, and home to see my parents three times.
  • Two-times daily walks with my wife
  • Volunteering at church (I’m an usher)
  • Spending more time with Colorado visitors
  • Cooking more. I grill at least once a week these days.
  • Get out into nature and hit the trails. There are many options here in Colorado.

And my list is still full of things I want to do. Here’s a sample:

  • Learn to sail
  • Learn to scuba dive
  • Hike Pikes Peak
  • Complete The Incline in less than an hour
  • Find a board position for a non-profit
  • Write a book or two (maybe)
  • Visit at least one Caribbean island each year

And there’s more… Plus it seems like every time I take one thing off the list, I come up with two more to replace it!

#9. Spouse Overload

In many households (either one spouse at home and the other one works or both work) the couple is used to spending significant time apart.

When one retires and joins the other at home (or they both retire and join each other), the couple could be thrust into close contact for several hours each day. It’s different for sure. Is it better or worse? That depends.

One of the most frequently asked questions I got when I retired was, “What does your wife think about you being home so much?”

My wife LOVES it. We take walks more than ever, we travel more than ever, we talk more than ever, and on and on.

And we still have our own interests, so it’s not like we’re joined at the hip 24/7. It’s been a big win for us.

But if it’s a problem for you or your spouse (or could be), then you’re going to have to deal with it. Have some conversations prior to retirement. Many of the suggestions above (developing new interests, friends, etc.) will lead to time apart for spouses which could be helpful.

Now if you hate spending any time with your spouse or vice versa, then I’m not going to be able to help you with that one. That is for a completely different post…

#10. Lack of Challenge/Purpose

For many people, their career is their purpose in life. They work. That’s what they do. It’s what they were “meant” to do. Once they retire their purpose is… what exactly?

For others, work is a challenge, they are type A’s that need a mountain to climb. Then when they don’t work, their mountain is… what?

I can’t really identify with the first group. Work was never my purpose in life. If it is for you, I suggest you consider finding a new purpose before you quit. Someone with no purpose is not going to be a happy camper.

I do identify more closely with the second group. For me business was a great big challenge. The scores were tallied in sales and profits and after every accomplishment there was another challenge waiting. Yes, I was a bit obsessive about it, but that’s what growing up poor does to some people — it lights a fire in them.

So I had to learn to channel that energy into other pursuits: developing my websites, getting in great shape, traveling to new locations, and so forth. I’ve seen others take new jobs that paid less but were more enjoyable. Still others have written books, started RV adventures around the U.S., or taken a position as a full-time volunteer.

In my experience, this downside can usually be overcome with simply a bit of thought and planning.

How to Avoid the Downsides

There are the ten downsides to early retirement. If you can think of some more, please leave them in the comments below.

Before I sign off, let me make a few general comments about these downsides:

  • If you plan well financially, the money issues go away.
  • If you consider what you’ll do in retirement and have plans to address the downsides, you’ll be fine. As someone once said, those who retire to something have good retirements. Those who retire from something usually have challenges. Make sure you have something to retire to.
  • The same traits (planning, being diligent, etc.) that allow someone to retire early are generally the same traits that can help them have a great retirement — as long as they put them into practice.

For me, the downsides have been almost non-existent. My biggest regret in retiring early BY FAR was that I didn’t do it much, much earlier when I actually hit financial independence. But I can’t turn back time, so I’m making the most of each day now. This is why my suggestion for everyone thinking about retiring early is “DO IT ASAP!”

And if you do retire and the downsides become too much for you, you can always go back to work if you leave the right doors open. As J. Money once said, if you’re smart enough to retire early, you’re smart enough to figure out your future.

ESI is the founder of ESI Money, a blog about achieving financial independence through earning, saving, and investing (ESI). He’s also the proud new owner of Rockstar Finance, after J. Money transitioned away to spend more time with his family last year. To see the first part of this Early Retirement Series, click here: 10 Things I Didn’t Expect in Early Retirement

[Photo cred: hobvias sudoneighm]

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  1. Accidental FIRE June 15, 2018 at 6:07 AM

    To me the healthcare insurance issues is the #1 problem here and why I only keep one foot in the retirement pool. The one that I least worry about? Boredom… it’s just impossible.

  2. Menard Solve June 15, 2018 at 6:15 AM

    Great insights from ESI. Maybe I shouldn’t get too excited about early retirement. I’m so obsessed with the idea to the point that I’ve been checking the retirement countdown app on my phone on a daily basis even though it’s set as far as 2026!

    1. J. Money June 15, 2018 at 9:40 AM

      You get closer by the day, at least ;)

  3. Cubert June 15, 2018 at 7:05 AM

    Nice list. I would consider “loss of control” as number 11. If you control the income, you control the finances. Retire early, and you’d better be ready to give up some of that control to your spouse, especially if he or she is still working.

    Boredom is a dangerous one. Don’t retire early just to escape a bad situation. Gotta make sure you have a clear vision of what your pursuits after Day 1 will be.

  4. Martinus June 15, 2018 at 7:13 AM

    Your writer says: ” And these are millionaires! If they are worried about affording medical insurance, how does the rest of the world stand a chance?”

    Every other civilized country in the “rest of the world” has a “one payer” insurance program. It’s time America too acknowledged that reality. No other country spends anything remotely close on a per capita basis to what America does on health care. Yet for many in the USA the results are terrible.

    It’s time for the USA to move on and do better for its citizens. It’ll never happen though: special interests (doctors, lawyers, insurance companies etc.) and the “American Mythos” (the rugged individual) conspire against good public policy.

    So relocation to a country with good public policy would ameliorate those financial health care concerns.

    1. Huong Meeks June 15, 2018 at 12:15 PM

      I very much disagreed with the one payer insurance program. The government tends to be bloated and inefficient (immigration policy is one example!), so I do not want them to control the insurance. But i also don’t see the necessities of the insurance companies. I think it is ridiculous that I would go to the doctor and have no idea how much i would pay (and neither do the doctors!) because the hospitals/clinics will negotiate with the insurance companies! Personally, I would like to know the cost upfront before I go to a visit and able to choose the doctor based on my preference and my wallet. I think insurance is only necessary if you or your family have a history of illness and you know you will need to be prepared….It’s like emergency funds…not everyone need 6 months of savings in the account- some can make do with less and some need more…

      1. Martinus June 15, 2018 at 1:39 PM

        Well YOU might not be interested in a single payer, but from a PUBLIC POLICY PERSPECTIVE it is clearly superior. USA spends around 18% of GDP on health care. Australia around 10%. Health care outcomes in the USA lag other countries. Why? Bad public policy.

  5. Lily | The Frugal Gene June 15, 2018 at 7:28 AM

    “I grew up as an only child to a single, working parent. Much of my childhood was spent alone and I actually like it that way.”

    Me too!!! Yay introversion. Thanks for being so honest ESI. I was worried about social interaction impacts (co-workers, lunch meetings, work outings) with my husband who grew up with 3 other older siblings. I was a latch key kid so I theorized I’ll be just dandy alone but I do worry about him.

  6. Roman @ Ten Factorial Rocks June 15, 2018 at 7:37 AM

    Great post John. I will bookmark this and keep referring to it as my own self-doubt about ER peeps in once in a while. As you rightly said, Type A’s have a particularly tough time for transition. Maybe I should become Type B even before retire early?!

  7. Fritz @ TheRetirementManifesto June 15, 2018 at 7:42 AM

    Great list. I’ve been retired one week (!!), so I’m still in the first night of the honeymoon. ;)

    Healthcare is the obvious concern, but it’s not a reason to keep working. Like most things on your list, a little planning goes a long way!


    1. J. Money June 15, 2018 at 9:42 AM

      Congrats again, man!! Big days ahead for you!

  8. Mr AE June 15, 2018 at 8:00 AM

    Those “0” years really take a bite out of your Social Security benefits – good thing to know for anyone who is banking on those checks down the road (we are counting them as a bonus/3rd round of safety netting)

    Keeping yourself challenged and engaged – With the drive of anyone who actually retirees early I hope this is a small subset. Everywhere I look in the ER space is passion projects and it’s awesome.

  9. Sean @ Frugal Money Man June 15, 2018 at 8:01 AM

    I don’t think people account for “Loss of Social Interaction” as much as they should…

    One aspect that we take for granted at work is seeing others faces everyday (outside of our family), which makes it easier to take your mind off of certain things at home. As much as we all may love our families, it is extremely healthy to have your own life outside of them as well. I believe a lot of retirees struggle when leaving the workplace because they don’t get to socialize as much anymore with other people. It can create a certain type of laziness that leads to boredom, physical decline, mental decline, etc., all of which you also mention.

    Great insights ESI!

    1. J. Money June 15, 2018 at 9:44 AM

      Totally agree… I miss seeing faces all the time as a blogger who works from home… Which is exactly why I’m sitting at Panera Bread right now working today :) Just literally SEEING people helps my mood, even if we never say a word to each other! Interaction would probably be the top reason I’d ever go back to a 9-5… face-to-face collaboration is beautiful.

  10. Dave June 15, 2018 at 8:18 AM

    There are many things to consider before walking away from a career. Having enough money in savings is just one factor. The social aspects are greater then many people realize. Not getting the required qtrs worked to qualify for Social Security can lead to a life of poverty during old age. Early retirement is not a decision to take lightly.

  11. Renae June 15, 2018 at 8:47 AM

    “Spouse overload” Someone described retirement to me this way – twice the husband and half the pay. :)

    1. J. Money June 15, 2018 at 9:44 AM


    2. ESI Money June 15, 2018 at 11:12 AM

      LOVE THAT!!!!! :)

  12. Prudence Debtfree June 15, 2018 at 9:25 AM

    This speaks to me. Thank you for this great post. We are just deciding upon what retirement will look like for us and exactly when it will happen. It’s not a no-brainer! Much of what you say makes me think we will be just fine. Though I feel very blessed to have had the job I have (as a high school teacher), my identity and social life are not caught up in my job. I also foresee books, family visits, fitness, writing, volunteer work at church, and travel as being the components of our retirement. Next year? The year after? Me next year and my husband scaling down to part time in his business for a few years? These are the questions for us to answer now. Thanks for the help as we decide:)

    1. ESI Money June 15, 2018 at 11:13 AM

      You can always test it out by going part-time as well. Then if things are not to your liking, you haven’t gotten totally out of the workforce.

  13. Cody Wheeler June 15, 2018 at 10:21 AM

    Great post. I’ve been considering a lot of these things lately as we continue our planning. A few never crossed my mind. The social security thing definitely hadn’t, although who knows if that even exists in 30 years. We should probably cut that bucket in half. Changes things in the later years for sure.

    Biggest concerns for me are the uncertainty of healthcare and cash flow needs. Working on figuring all of that out. I’ve been kicking around the idea of one of us working a low stress job just to cover healthcare, but that also sounds like it defeats the purpose, haha.

    Either way, great food for thought as this becomes more of a potential possibility.

  14. Superbien June 15, 2018 at 10:21 AM

    One thing that could help is to volunteer as a mentor or business advisor. A friend started a business that came out of her expertise, but the business side was a struggle. She got a lot of help from the Small Business Adminstration volunteer, who showed her resources, gave advice, and connected her to others. Another person mentors older students.

    1. J. Money June 15, 2018 at 10:34 AM

      Totally! And you don’t even have to wait until you retire to do that either ;) It’s amazing how volunteering just a few hours here and there ends up motivating yourself as much as those you’re helping!

  15. Mattej June 15, 2018 at 11:16 AM

    Great article. Hits home.
    I lost my work at 50 and 2.6 years later, I have decided that almost at 53, the offers are simply not there.
    I have read so much about FIRE and I talk to many people and yes, not working and trying to find work is the worst. “Taking a year off” until I try again allows you to spend less and more time on the markets and health improves a lot but you lose in identity as that is what happens to us. Me=job said the caveman.
    I have no wife or kids or partner – (with home) I am at $2m (1.7m cash) and zero debt. I travel a lot and spend on my health but don’t need the fancy car or brand name clothes.
    At 53 when I see friends drop dead of heart attacks or suicide I think – enough. If you are not working and live on 4k a month, do your best with the markets = you can survive especially when you have health insurance worldwide at $1,500 – $2,000 a year.
    I will say corporate life is ageist and despite having it all, for them you are not 35.
    Curious to read more (like the links you have included) on much your readers are at and what age.
    Keep up the great writing and in your 50s – time is our greatest asset.

  16. Jason@WinningPersonalFinance June 15, 2018 at 11:27 AM

    This is a fantastic list. For most of my adult life, I had a goal of early retirement (I know I was a very weird 22 year old). I’ve since changed my goal significantly to a career pivot. Some folks would call this change “FIRE” but I don’t look at it that way myself.

    I’ve realized that I want things like income, health insurance, socialization and mental challenges and a sense of purpose that come with work.

    My goal today is not to retire early. It’s to retire from a corporate job early and pivot to a new career helping people with their finances. Ideally, I’m I’ll find a way to set this up to have both location independence and flexible hours so I can enjoy the free time I want out of retirement while having all of the benefits of a career.

    1. ESI Money June 15, 2018 at 11:56 AM

      Some great thoughts here. I’ll add my support to “location independence and flexible hours.” With those you can live almost any life you want (within reason, of course) from anywhere you want.

  17. PaulM June 15, 2018 at 11:48 AM

    Great list ESI! For me it’s the fear of “change” I addressed that by cutting back to half-time, which may not be for everyone but works for me. I plan to fully retire next spring but this period is giving me the time to plan for a full retirement. I hate not being in control so I need to plan ahead. It’s not so much the finances because I feel about as confident as I can (like others healthcare costs is the big concern), it’s the challenge of leading a purposeful life. Thanks for the suggestions

    1. ESI Money June 15, 2018 at 11:58 AM

      Going part-time is a great way to test the waters and see if retirement works for you.

      If it does, you can quit entirely (if you want).

      If it doesn’t, you can go back to full-time.

      Or you can do a partial retirement and work just here and there.

      All good options based on what works for you.

  18. Julie Grandstaff June 15, 2018 at 11:55 AM

    A very good article. All valid issues and good solutions.

  19. JoeHx June 15, 2018 at 1:06 PM

    My wife would love spending more time with me. And you know what? I would love to spend more time with her.

    Granted, we’ve been married less than a year, but we have been together almost four years.

  20. A Frugal Family's Journey June 15, 2018 at 1:34 PM

    Very true and all great things to consider before early retirement. Nevertheless, I will always choose early retirement and simply figure out how to minimize the impacts of these downsides. ;)

    Thanks for sharing. Best wishes and continued success on your journey. AFFJ

    1. J. Money June 18, 2018 at 7:39 AM

      You and me both :)

  21. Young FIRE Knight June 15, 2018 at 2:16 PM

    It sounds like a having a solid plan to keep your finances in order as well as a plan to keep you active and busy are absolutely essential for early retirement. All but the healthcare issue seems like it can be managed (since no one really knows where that is headed).

    I don’t think I’d ever have any problems with the staying active/being challenged, but I guess I’m lretty far awar from ER so who knows how things can change in the meantime!

  22. MrFireby2023 June 15, 2018 at 6:44 PM

    Of the above list of downsides, only two concern me: Healthcare costs & Spouse overload (that’s a biggie, I’m so glad you brought this up!). I have a question about your health sharing ministry. How do you/they handle prescription drugs? Do you pay 100% out of pocket or is there a co-pay like most normal health insurance?

    On spouse overload, this can be a problem for many. I’m married to my best friend and I’m very much in love; but after 4-5 straights non-stop days with each other we are ready to slit our own wrists or kill each other! I wonder how many other folks share this sentiment.
    I travel less with my job than ever before and my days aren’t so long. I’m home early and I’m with her throughout the evening, from early afternoon until bedtime, plus all weekend together. That’s a shock to our systems and our marriage to go from being out of town on business trips 4 nights per week for weeks-on-end, to now I’m only gone 2-3 nights per month.

    1. ESI Money June 16, 2018 at 8:33 AM

      We don’t take any prescription drugs on a regular basis, so I’m probably not the best person to ask. I do know that when we’ve needed medication, my wife has called around to different pharmacies and received quotes ranging from $200 to $20 for the same stuff!!!! So my advice would be to shop around.

      That said, I know there are discount opportunities that can be taken advantage of, so I’d ask the specific health share you’re thinking of what they can do for you.

      As for being together too much, we find that both of us having interests gives us enough alone time. We both work out in the morning but I’m in at 7 am to 8:30 am and she’s after that (we then walk together around 10 am.)

      I am in my office after that and she’s either at a volunteer job or working in the house. It’s not an issue for us as our home is large enough that even when we’re both here, we’re not on top of each other.

      Something for you to consider is what each of you will be doing in retirement. If you both have hobbies/activities that take you out of the home (in separate ways at different times) perhaps that will be enough to give you the time you each need.

  23. Mark June 15, 2018 at 11:02 PM

    Some of this hit home. I used to think my job was my end-all. Money was the goal. I have 4.5 mil in net worth but was forced to retire in my late 40s because of a neurological disorder. I am now 64 I discovered money wasn’t everything. I cannot drive long distances because of the disorder. My wife continues to work. After the children left home, I found loneliness, boredom and no social interaction, everything you mentioned. Early retirement is good if it’s not forced upon you.

  24. Bryan June 16, 2018 at 6:25 AM

    Boredom and Social Interaction – That is my fear when I get there. I get bored extremely quickly. I must be mentally engaged all the time. Making new non-work friends at mid-life…how the heck do you even do that?

    1. ESI Money June 16, 2018 at 8:36 AM

      Did you see the suggestions above. Won’t any of those work for you?

    2. Neo June 23, 2018 at 9:32 AM

      ESI is right.

      Look at Justin’s examples, too.

      Do you have enough friends already?
      How to gain more friends
      Where do I find these friends?
      But all the people my age work Mon-Fri and can’t come out to play during the week!
      The miracle of children
      Spouses as friends?
      Start making friends before you retire completely
      Is this only a concern for socially awkward, type B personalities?


  25. Seth @ Two Corporate Millennials June 16, 2018 at 3:02 PM

    Well done! As someone pursuing FI, I appreciate this list that I can learn and refer back to! Thanks ESI and J Money!

  26. Xrayvsn June 17, 2018 at 1:04 PM

    Really great points you bring up with the challenges of early retirement.

    The biggest thing and is oft quoted is that you need something to retire to, not from. For those who look to retire early to escape something, they are often lost when they finally do and find nothing to now occupy their time.

    I can totally see how there are several risks with early retirement (loss of social interaction, decreased activity, loss of mental stimulation, etc) that you mentioned. I know I have said I want to travel the world more when I retire, but traveling can only take up so many days of the year.

    I’m glad I found blogging because it is mentally stimulating, there is great social interaction, and it keeps me busy. Although I am still working, I hope that I can continue blogging for many years so that I will always have this to keep me engaged.

    1. J. Money June 18, 2018 at 7:41 AM

      Blogging has completely changed my life/finances/career/friends too – very thankful!

  27. JR Knoxville June 17, 2018 at 7:36 PM

    Wonderful article! If I may make a suggestion, gradual retirement is a wonderful alternative. One may decrease their workload gradually.
    At age 50 I moved to a four-day week. I plan to move to 3 days a week when I turn 60 which will still allow me to keep health insurance until I’m eligible for Medicare. I’ve been amazed at the improvement in my lifestyle in so many ways with a three-day weekend. I can’t wait for a 4 day weekend. And my new arrangements allow me to take many more vacations each year. Yes I do make significantly less money but my kids are out of college so my lifestyle hasn’t suffered.

    1. J. Money June 18, 2018 at 7:41 AM

      I like that idea :)

    2. ESI Money June 18, 2018 at 12:04 PM

      Great suggestion! It doesn’t have to be all or nothing!

  28. Noonan June 18, 2018 at 12:27 PM

    Great list!

    I live in Colorado as well and have been retired since 2008 (when i was 48). A book that helped me address many of the issues you raise is Ernie Zelinski’s How to Retire Happy, Wild, and Free. It’s become my go-to gift for friends who have just retired.

    1. J. Money June 18, 2018 at 1:22 PM

      Hey ol’ friend! Thanks for the rec!

  29. Bill B June 18, 2018 at 4:25 PM

    This is spot on. Fear of the unknown can certainly cause some financial stress for us, but I’ve been struggling more with social interactions because of the awkwardness and associated stigma. Old friends are still too busy working, and it’s hard to relate to anyone not in the same situation. I live near D.C., which is one of the top workaholic cities in the nation. When you meet someone new, their first question is always “what do you do”. An honest answer can be very long-winded to avoid sounding pompous or bragging. Sometimes it’s easier to just lie and say “I work at home” and try to change the subject, so the other person does not have negative feelings.

    But this is all a small price to pay, and I would still recommend retiring as early as possible. Just realize it’s a process — not an event or even a goal, and you need a good system and philosophy of life to deal with the good and the bad.

  30. David Tashjian June 20, 2018 at 1:34 AM

    This is a great list! Although, I do think an entire article can be written on “How to Avoid the Downsides.” There is so much that can be done to make sure your retirement is great!

  31. Michael June 20, 2018 at 11:52 AM

    This is a great post! Early retirement may not be for everybody but financial freedom is. Meaningful work is fulfilling and gives on purpose so my philosophy is to get financially free through passive income and then I can find my purpose to pursue regardless of the income I get from it.

  32. Bob at The Frugal Fellow June 28, 2018 at 9:14 AM

    Funny – I think #5 would go the opposite way for me. Currently I am at a desk job, so it’s difficult to find time for physical activity. If I were retired, I would have a LOT more time to be active – it’s unlikely I would be sitting in a chair all day.

    Otherwise, good points, and many I hadn’t thought about. I’m still aiming for FIRE, though. :)

    1. J. Money June 28, 2018 at 1:21 PM

      Same…. it’s worth the risk ;)

  33. Pradeep July 2, 2018 at 6:49 AM

    Great post and very insightful.

    For point 7, would it help if people first reduced their working hours by a day or two every week? Instead of working 40 or 60 hours a week for 20 or more years and suddenly getting to 0 is hard. But getting from 40 to 30 is doable and in a year you can become comfortable going to 0. In the meantime using that extra day to get into clubs or nurturing hobbies may help getting there.

  34. Steveark July 2, 2018 at 7:56 AM

    The easy answer to loss of income, loss of identity and boredom was to create some lucrative side gigs. While I don’t need more money it is kind of comforting to have stayed at a zero withdrawal rate for the first three years of our retirement. Plus as a consultant I maintain the well known brand I built during my career. And working one or two days a week still leaves me ample time for volunteering and our many hobbies. I think it may work better for people who loved their former jobs like me. If you hated your former work then finding highly paid work you would enjoy is going to be much more challenging.

    1. ESI Money July 2, 2018 at 2:26 PM

      This is my situation exactly! Good stuff!

  35. Fred July 2, 2018 at 10:53 AM

    This is a great list.

    After finances, the biggest issue in my experience is keeping the mind engaged. My stepfather, a professor of pulmonary medicine, retired early for health reasons. He wasn’t mentally prepared. Going from teaching residents in a clinical environment to a somewhat forced retirement caused him to fall into a pretty serious depression. He finally came out of that and found another passion – painting. He and mom built a studio for him in their house. She had to pry him out of it after awhile. He wasn’t ready to retire and hadn’t prepared mentally for it. The early years were tough.

    My most offered piece of advice to clients wanting to retire, either early or normally, is to have a plan for how you will spend your time. Too many people’s identity and worth are tied to their jobs.
    Gotta think about that well before retirement. The consequences of not doing so can be significant.

    1. J. Money July 2, 2018 at 3:01 PM

      Painting – Awesome!!! So glad there was a happy ending to this story! :)

  36. Scott July 2, 2018 at 3:34 PM

    Good things to watch out for in early retirement and going on our third year of early retirement I would agree with all the workarounds.

  37. Dylin @ RetireBy45 July 2, 2018 at 5:25 PM

    My wife and I also retired early (in our early 40s), I can very much relate to all of these. Like you, I have found many ways to overcome these downsides. One of the biggest keys we’ve found to be happy in early retirement is to continue to challenge ourselves.

    Travel is a big part of that. In the 3+ years since retiring, we did a 5-week tour of SE Asia, a 2-week tour of China, a tour through the Panama Canal, and a cruise around the Mediterranean. We’re now planning a 5-week driving tour around the Eastern US, which will include both of our 30-year HS reunions and FinCon in Orlando (where I’ll be speaking).

    I sometimes wonder if my wife and I retired too soon, so it’s very reassuring that your only regret is that you didn’t do it much earlier!

  38. Doug July 24, 2018 at 5:00 PM

    Good article, but the point about social security isn’t as bad as stated for higher earners. The first $ put in have a 6x better return than the last $ if you’re above roughly 35*12*$5100 total put in. So it’s a lot better deal to put in the minimum amounts than the max. See https://rootofgood.com/early-retirement-social-security/