It’s been roughly eight years since I quit my investment banking job and retired at 34. My wife—also an early retiree—and I had a combined net worth of about $3 million.
Achieving early retirement is difficult for a lot of people, so we feel incredibly grateful to have financial independence and freedom from work. We also know that this lifestyle isn’t for everyone.
But if you are considering it, you’ve probably heard a bunch of downsides that made you second-guess early retirement. Based on my own experience (and conversations with dozens of other early retirees), however, the naysayers are wrong.
Don’t be fooled by these six biggest lies about early retirement:
1. The younger you retire, the more you risk running out of money.
While you should be always be prepared for the worst, this is an irrational fear for one simple reason: You will do everything you can to ensure that you will not run out of money.
People don’t just wake up with the decision to retire early—and then quit their jobs that very same day. Early retirement takes years and years of planning, discipline, saving and investing.
Even though my goal was to retire in 2011, I decided to stay working for another year. I’m glad I did, because in addition to growing my savings, the extra time allowed me to negotiate a nice severance package.
My wife and I also expected a passive income of about $80,000 per year in retirement (mostly from rental income, municipal bonds and interest from savings). To make sure we could survive off that amount, we experimented with living off of much less before actually retiring.
Lastly, we had emergency plan: If money ever gets tight, we’ll take on as much freelance work as possible or sell our San Francisco home and move to a more affordable area.
2. You’ll have to cut back on spending to save money—and it will suck.
Saving money doesn’t have to be a miserable experience. Happiness in retirement isn’t all about how much you have in the bank; it’s also about how much you spend, because your spending amount determines how much you need.
And you will soon realize that you don’t need much at all.
During the first two years of retirement, my annual income decreased by nearly 80%. And yet, the minimal lifestyle changes I made didn’t bother me at all. In fact, what surprised me the most was that I was spending 30% less than I anticipated.
It costs nothing to play at a public tennis court. Food is a lot cheaper when you no longer work in an expensive downtown area. A $2.50 burger from In-N-Out can actually be more satisfying than $50 steak. You can read all the books you want at the local library, for free.
3. You will feel permanently happier.
This isn’t exactly a downside, but it is a myth. If you’re looking for long-term happiness, retiring early is not the answer. Like most shiny new things in life, the excitement fades.
My euphoria kicked in almost immediately after I quit my job. But it was fleeting, and my happiness eventually went back to its normal baseline levels.
For months, I was weighed down by thoughts of uncertainty. Was retiring early a mistake? Did I make the wrong decision? It took me two years to get rid of my doubts. The key is to continuously express gratitude, while also finding new things to look forward to every day. For me, it’s spending time and having memorable experiences with friends and family.
But keep this in mind: There will always be lingering anxieties, some of which you can’t escape. Instead of meetings and deadlines, my worries have since shifted to the health and well-being of my children, parents and in-laws.
4. You will be bored out of your mind.
Yes, you will be bored … at first. But you’ll eventually replace the things you hate doing with activities you truly enjoy. That’s the beautiful of early retirement. The process just might take longer for some than others.
After I left my job, I was constantly twiddling my thumbs. Going from 12-hour workdays to absolutely nothing can be very disorienting. (There’s only so much tennis, golf and softball you can play before your knees start deteriorating.)
But after two years of experimenting, I developed a daily routine that kept me productive, engaged and happy. Diving deep into my writing on Financial Samurai (my finance website), for example, not only generated a surprising amount of supplemental income, but it was also a cathartic way of relieving any uncertainties on my mind.
Then we were blessed with a son in 2017, and a daughter in 2019. As full-time parents, we no longer have the luxury of boredom.
5. You will lose your identity and get depressed.
We spend the majority of our lives working, which makes it hard to find an identity beyond our profession. But it is possible if you keep examining your strengths, values and hopes and dreams for the future.
During my first year of retirement, I often wondered how my boss and colleagues were doing without me: Were they really able to survive without my expertise? I was there for 11 years. Surely, they needed my expertise and relationships. I stopped feeling motivated to achieve great wins and fell into a deep depression.
Luckily, due to a lot of soul-searching and “what the heck am I doing with my life?” questioning, I slowly discovered new things that define who I am outside of my work.
I’m no longer ashamed to say “I’m not working” each time someone asks what I do for a living. Instead, I proudly tell them that “I’m a high school tennis coach for three months a year” or “a proud husband and father of two.”
6. You’ll die younger, due to laziness and a lost of purpose.
This might be the most insidious myth of all, because the health benefits of early retirement are priceless.
When I was still working, I had all the common problems: Plantar fasciitis (inflammation of the fibrous tissue), a weakened immune system (due to immense work stress), chronic lower back pain (from sitting all day), teeth grinding (also from stress) … and that’s just the half of it.
All those issues miraculously went away once I retired. I firmly believe that stress is one of main causes for many of our biggest health problems. Instead of spending hours sitting in a chair and having takeout at my desk, I’m eating healthier, exercising more and meditating longer.
Finally, I absolutely have purpose. At first, it was educating readers about how to achieve financial freedom. Now that wife and I are parents, our kids have become our purpose. Our goal is to live a long and healthy life so we can watch them grow up to be happy, independent and loved adults.
Sam Dogen worked in investing banking for 13 years before starting Financial Samurai, a personal finance website. He has been featured in Forbes, The Wall Street Journal, The Chicago Tribune and The L.A.Times. Sign up for his free weekly newsletter here.
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