It’s always difficult to take the leap into something new – be it starting a new job or business.
The same can be said for retiring early – choosing to retire after working for so long is scary.
There are 4 fears that prevent people from retiring early once they reach their savings target:
Fear of the Unknown – you are afraid of things that could happen that you never predicted.
Fear of Running out of Money – afraid that your money will run out due to a market crash.
Fear of Loss of Community – afraid that you will lose your friends or family when you retire.
Fear of Loss of Identity – afraid that you will not be sure of who you are when not working.
In this post, I talk about how to overcome the fear of the unknown and running out of money.
I also talk about how retiring early will give you a new community and a new form of identity.
Finally, I discuss why you should take the leap of faith and where to go for more information.
Fear of the Unknown
It’s funny because on the start of your journey to early retirement – you are really excited.
The prospect of not having to work until you are in your 60s is amazing – I can’t wait to retire.
However, once we are actually on the brink of retirement, something strange happens to us.
It’s a phenomenon known as the “wall of fear” – where excitement suddenly turns into fear.
One of these is the fear of the unknown – where you worry about things that could go wrong.
What some people do to avoid this fear is continue working – even though they could retire.
They think “if I just work one more year things will be better” – but they never take the leap.
This is the last thing to do. After building your investments for years it’s time to now enjoy it.
There will be things that you never would have predicted – whether you are working or not.
By having these expectations, you’ll be able to face anything that happens in your retirement.
Fear of Running Out of Money
This is one of the main fears when it comes to early retirement – what if I run out of money?
Logically you know it doesn’t make sense, you have measures in place so that doesn’t happen.
For some reason, our emotions start to overpower our logic on the brink of early retirement.
Here’s a reminder of all the measures you would have in place before it is time to retire early:
- Portfolio Income – cash your investments produce without withdrawing from your portfolio.
- Cash Reserve – spare money that you have in your bank account incase your portfolio is down.
- Inflation – 4% Rule is adjusted for inflation, so you can withdraw more accordingly every year.
- Expat Insurance – health insurance that will cover you if you plan on living in another country.
As you can see, there is little risk that your cash will run out if you’ve these measures in place.
Plus, if you do happen to run out of money, you can always work temporarily if you need to.
Fear of Loss of Community
When working, you’re part of a tribe that work during the week and are off on the weekends.
This tribe becomes your community – people that you’re used to seeing each and every day.
Inevitably, when you retire early, you will stop being a part of this community of employees.
People may even despise you – they’ll think you are weird and may even stop talking to you.
Suddenly, the friends within this community that you’ve known for years, will be alien to you.
All I can say is that is to be expected; You will realise that you no longer fit in this community.
Of course people will envy you – you get to stop working while they have to keep on working!
However all is not lost. This is the chance to find a new community and make new friends.
There are early retires all around the world, with conferences and meet-ups so you can meet.
If interested, check out Chautauqua, MrMoneyMoustacheMeetups, ChooseFI, and CampFI.
Fear of Loss of Identity
One of the first questions we get asked at any event or any party is – “So, what do you do?”
To which the reply is something along the lines of – “Oh I’m an engineer, doctor, lawyer, etc.”
For some reason in modern society, our profession forms a huge part of our personal identity.
What happens when you retire? Can you still say you’re a doctor if you’re no longer working?
How will you feel when you are no longer at your profession? What happens to your identity?
The good news is you can have a new identity: “I’m retired” – that’s a conversation starter!
Perhaps you were an engineer but always wanted to be an entrepreneur – now you can be!
Because you don’t need money, you can pursue anything you want without the fear of failing.
In the past you may not have perused things because of the financial uncertainty associated.
Now you do whatever you want and take on your dream identity – I’m an actor/author/artist!
Take the Leap
There is always going to be some level fear before making any big decision – like retiring early.
You’re excited but also anxious – you’ve been waiting for so long and now you’re finally here.
It’s normal to feel fear – like being on a rollercoaster that’s ascending before its big drop.
You can either let that fear stop you from going on or let it empower you to get on and do it.
Just like a rollercoaster, going to hand in your resignation for the last time is going to be scary.
But once you do it and retire early, in a few years you’ll be asking – what was I so afraid of?!
To find out more the fears around early retirement, check out the book: Quit like a Millionaire.
The authors talk about their fear when it came to retiring early and how they overcame them.
Are you on the path to early retirement? How is it going? Please share in the comments below.
If you have any future blog article suggestions, please let me know in the comments below!
