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How to Prepare For Early Retirement

September 29, 2021

Preparing for Early Retirement

The following is a chapter I wrote for the Aussie FIRE ebook, put together by Pearler, featuring 20 bloggers from the financial independence community.


While at work in my mid-twenties, I would spend an abnormal amount of time dreaming of the day I could retire early.

These fantasies weren’t anything elaborate mind you.

Mostly just a vision of kicking back in a comfortable chair or maybe looking at the ocean, with a peaceful smile and an internal glow of satisfaction, knowing that I was completely free to do whatever I desired for the rest of my life.

And for all the time I spent with these images in my mind, for some strange reason, I never thought past that.  I just assumed I’d be happy living out the rest of my (hopefully) 60+ years relaxing and not doing much at all.

But because humans thrive on having things to do, it doesn’t work like that.  We need projects and meaningful tasks to ‘work’ on to keep our brains ticking and our happiness juices flowing.

It sounds silly now, but I just didn’t give the details of early retirement much thought back then.

Luckily, I quickly adapted and found many enjoyable ways to spend my newfound freedom.  But for some people, it’s easy to feel lost, directionless and even depressed, not knowing how to fill the large chunk of time where work used to be.

For this reason, it’s a great idea to prepare in advance for early retirement.

I’ll be writing about how to actually pull the plug and leave work in another post with some practical tips around that particular issue.  This article is really about how to mentally prepare and what to expect when you do retire early.

 

How To Spend Your Freedom

Maybe you’re wiser than me.  Maybe you’ve already thought about all the things you’d like to do during early retirement.  If so, fantastic!

Either way, here are my recommendations for deciding how to spend your freedom…

Firstly, think about your main motivations for retiring early in the first place.

Is it for more family time?  So you can do lots of travelling?  To focus on your health?  Something else?

Spend time revisiting this because it’s really important.

Next, make a list of all the things that interest you.

  • Anything you might want to do or try.
  • Activities you want to experience.
  • Topics you’d like to learn more about.
  • People you’d like to spend more time with.
  • Hobbies you want to get back into or try for the first time.
  • Maybe a business or freelance idea you’re keen to test out.
  • Places you want to visit.
  • Causes or charities you’d like to help or volunteer with.

Don’t think about it too much or question whether it’s practical or not.  Just write it all down!

It’s going to be a long list, and that’s okay.  In fact, it’s fantastic.  Look at all the possibilities and things you’ll soon have more time to dive into!

Remember, you don’t actually have to do any of it, but it’s there for inspiration.

 

Lifestyle Design

When we leave work, we lose one unusual thing that goes unnoticed.  Structure.

Our lives are built around our work, so we’re forced into a routine.  But without it, we’re more or less left with unlimited options for how we spend our day.

Some people struggle with this, which is totally understandable because it’s a huge change after all.  The solution is to create a new routine, one that we love. But how do we do that?

Well, first imagine what your ideal day looks like.  And I don’t mean the weather, I mean the structure.  What is the layout of your ideal day?

Remember, everyone’s different in this regard, so your ideal day will probably look quite different from someone else’s.

Maybe you’re not sure what your ideal day looks like yet.  That’s okay too.

To offer some insight here, I’ll share some details from my own life.  After being ‘retired’ for about 4 years now, I’ve noticed a similar theme from the days I enjoy the most.

 

My personal recipe for an enjoyable day

  • A few hours of being active.  Any combination of a nice morning walk, bike ride, lifting weights or bodyweight exercises, playing with the dog, and maybe some yard work.
  • A few hours being productive.  For me, this means working on a new article, planning podcast topics, responding to readers comments/emails, thinking and jotting down new ideas, and perhaps managing/monitoring our finances.
  • Ample time for relaxing.  This means having plenty of space in the day to gather my thoughts, ponder the universe, think about the future and appreciate the present.  Having time for thinking and reflection is so incredibly valuable, yet we largely ignore it in modern society, to our detriment.
  • A few hours of reading and entertainment.  Enjoying whatever book I’m reading currently, listening to a podcast or simply watching a little TV at night.  A day doesn’t feel complete if I haven’t made an attempt at learning something that day.
  • Time spent socialising.  I’m very much an introvert by nature, so I don’t need tons of socialising.  But my best days definitely include some of it!  This includes catching up with friends, talking with relatives on the phone, or simply enjoying time with my partner and our dog.
  • Enjoying nature.  After leaving full-time work in 2017, we decided we wanted to be around more nature since we had the time to enjoy it.  Now we live in a much greener area of Perth, next to a huge regional park.  Nearly every day we get to see beautiful birdlife in the trees and swans on the lake.  Sometimes we see kangaroos in the woodlands, and certain times of the year, long-neck turtles which we’ve been doing some volunteer work with.

Explained visually, here is a rough breakdown of how I spend my waking hours…

A little more balanced than the average lifestyle I’d say.  Certainly far more enjoyable than my old work-life schedule!

Of course, there are other things we do and not everyday looks like this, but on average I think you get the idea.

Like anyone, I’m prone to laziness and procrastination, so not every day is a happy, productive day.  But when I remember how much I enjoy certain activities, it helps me refocus and start using my time more wisely.

The overarching point is, your lifestyle can be designed around the activities that bring you the most fulfilment on a daily basis.

Okay, so we’ve covered what you might do with your time and the importance of having a structure in your days.  Now I’d like to share some of the things you can expect from ‘retired’ life and the lessons I’ve learned.

 

What To Expect From Early Retirement…

Upon leaving work, you’re likely to quickly experience or realise many of the following things:

  • Every day starts when you decide it will.  No more mandatory alarm clock!
  • No more soul-sucking commute.  You can structure errands to avoid traffic/busy times.
  • Much, much more time is available for your kids/pets/hobbies/self.
  • Health gets to be a focus, and you can invest time in preparing nice food.
  • Any work chosen from now on is completely optional so you can be extremely picky about any income earning activities you take on.

For us, the first few months were dedicated to unwinding from the rut of full-time work. It was about enjoying the freedom, considering our options (like the list from earlier) and settling into a nice, relaxed groove.

After this initial ‘holiday’ period, you’ll likely find yourself feeling refreshed and with near-abundant levels of energy. And before long, you’ll soon find yourself wanting to be productive.

That surprised me because as I mentioned earlier, I was someone who thought work was over and simply imagined a satisfying life of leisure.  How wrong I was!

Anyway, with our newfound energy, my partner decided to really get into gardening, while I decided to start a blog.  These are both activities which we enjoy to this day.

As more time passed, we had a few more realisations…

 

Some lessons from retired life

  • Working on things is way more fun when it’s something you’re actually interested in.  And doing it without the draining nature of a robotic, productivity-driven workplace makes it even better.
  • Without direction, your mental state and happiness can suffer.  This may differ between personalities, but I’m much happier when working on, or learning about things that are important to me.  Don’t get me wrong, I’m a laid-back guy who likes a simple life and a small to-do-list, but getting stuff done feels good.
  • Time still passes relatively quickly… unless you literally do nothing.  But that’s not a great idea either – see above!  It seems inevitable that a good life is going to feel like it goes fast because you’ll be busy doing stuff you enjoy.  Maybe that’s the trade-off?
  • Money is less meaningful after reaching Financial Independence.  Don’t get me wrong, it still matters.  But most of the time, money is simply a bunch of numbers on a screen or a spreadsheet.  The FIRE movement is more about life than it is about money.  This sinks in more than ever once you no longer work for a living.

So your new mission (and the real lesson here) is to find engaging hobbies or work that you’d do for free.  Because if you’re just doing it for the money, then it can’t be that good!

 

Some surprises about early retirement…

1. Freedom can be scary.

It sounds weird, but hear me out.  Looking down the barrel at a lifetime of freedom ahead of you is kind of like winning the lottery.  At first, you can’t believe your luck.

Next, you start to realise what this means.  Your mind is flooded with options, ideas and opportunities.  Now you actually start feeling a little overwhelmed. You now have too many choices!  A first-world problem, for sure, but a problem nevertheless.

And it’s the same with Financial Independence.  Having complete freedom can be a little daunting.  Because of this unique opportunity, you might start feeling like you have to do something ultra meaningful in a save-the-whole-world type of way.

But after a while, you realise that just having a couple of enjoyable things to work on that mean something to you, is plenty good enough.  As long as you’re helping others or a cause in your own little way, you’ll derive a sense of meaning from that.

So you can then relax into your new life and work on things at your own pace.  This is another reminder of why it’s good to have a rough plan, structure or list of ideas ready before retiring!

 

2. You forget that you’re retired!

After a while, you’ll be going about your day, maybe working on something or doing whatever it is you do, then it hits you.  You remember that all this stuff is optional because you’re FI!

Or sometimes you might be grumpy for whatever reason (yes you still experience the full range of emotions once retired!), and then realise that you’re more fortunate than a large portion of the population, or the rest of the human race for that matter!

These little sledgehammers to the forehead often catch me by surprise and remind me to be grateful.

 

3. Mindset and Outlook

As time goes on, you may also find your attitude changes in a few different ways.

Firstly, because you’ve stepped off the glorified hamster wheel, you’ll start caring even less about what others think of you.  Besides, if you ever need reinforcement that sensible money management is a good idea, it’s simply a case of taking stock of your fortunate position versus that of your peers.

Essentially, your life will be more independent than ever.

You’ll also be living at a more calm and peaceful pace, like you’re in some parallel universe.  Where you literally have time to smell the roses, look at the clouds, and appreciate each day and the freedom you have.

There’ll be an unspoken deal with yourself, that any work undertaken must be enjoyable or worthwhile for its own sake.  The joy this brings is a game-changer.  Having the feeling that work can be dropped or you can make a change when it no longer suits you will prove to be hugely comforting.

Because of these reasons and the time you have to dedicate towards it, your health and energy levels will typically improve too.

Quality sleep.  Low stress.  Improved nutrition.  More movement.  And a more balanced, overall happier lifestyle.  All of these things are much easier once you’ve got your freedom back.

Above all, your focus will automatically shift towards spending time on what’s most important.  By your own measure, nobody else’s.

 


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10 Comments

10 Replies to “How to Prepare For Early Retirement”

  1. Love it, Dave… great article!
    As we suddenly became FI, this is the part I really didn’t properly prepare for.
    As we are still travelling, often there are things to see or places to go, but boredom can also set in if we stop too long (or get locked down!)
    I’m still trying to figure out what interests or hobbies I might have. Really haven’t found any “work” that I want to commit to.

    The other thing about FI is that spending all day, every day with your significant other can definitely put pressure on relationships too. It’s important to have some separate time.

    PS: I love your pie chart! Thinking I need to do one of those….

    1. Hey Laura, cheers!

      At least you have plenty of time and the ability to try things that might seem interesting to you. And yes, some independent activities and solo time is also a healthy thing – good tip!

  2. Hi Dave,

    Great article! I think a really interesting follow up or a part 2 to this post, would be interviewing your wife.

    My understanding is that she works part time. I would be interested in how she finds her life balance and if she agrees with your opinions or has a different take.

    I know in my own situation when I reach FIRE, that I plan to work a bit more that you do. I am curious as her path with part time work sounds a little more closer to my FIRE plan.

    1. Thanks mate 🙂 I did interview her a while back which you can read here. Hopefully that covers some of your questions, but I will ask her and then edit this comment…

      Edit: She said she likes working 2 days a week since she gets the social aspect of it and still gets 5 days off with plenty of free time for other stuff she wants to do, like gardening. She’s worked more than this at times when they needed extra work done, but she didn’t really enjoy it as much as the 2 days.

    1. That’s so awesome, and quite interesting too. I haven’t heard many examples of people retiring from a job they loved, only to enjoy retirement/freedom/independence even more. Very cool!

    2. Congrats FJ. I had been reading your blog for a few years and following your progress to FIRE, but dropped off… nice to get an update via another blog. Enjoy your freedom / retirement!

  3. Hi Dave, a great article and plenty to think about.
    Maybe you have covered this before, but how do you handle the stigma attached to being retired in your 20s/30s?
    Do people think you’re weird/lazy/arrogant/boasting/full of S, or something else?

    1. Good question. I’m not really sure what people think. I don’t announce it and even when people ask what I do and then I usually just say “I work part time” and it rarely goes further than that other than maybe mentioning I have a website. The people who know me know the full story and understand (far as I know!).

      I answered a similar question in this post (Question 1). But basically the advice I’ve given in the past and what works quite well in not opening a can of worms is this…

      – Tell people you’re taking time off and living off savings.
      – Say you’re just having a break before you get started on something new.
      – Say you have some savings/investments and don’t spend much so manage fine without working full time.

      This works well in explaining you have some money without it sounding like boasting. Or you can tell the whole story, which I’ve almost never needed to do as nobody has bothered to poke that far 🙂 Hope that helps!

    2. With the greatest respect Campese but by stating there is a stigma you are, by implication, applying that stigma assigned by others to yourself.

      While I know it is difficult, those who have reached FI should attempt to be indifferent to what others think of them.

      One approach which can work is based on people. They love talking about themselves. So if you can see the opportunity arise start asking them to tell you about their achievements (or lack of), hopes and various other matters. They will likely be flattered in the interest taken in them so whatever you have been doing (or not doing) will be forgotten. And they will think you are a great person!

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