Written by Alex Seleznev, MBA, CFP®, CFA | Oct 16, 2024
A few weeks ago, I met with one of my long-term clients for our regular semi-annual meeting. We will call him David for this newsletter. What came out of this meeting was rather surprising and even eye-opening.
Just to give you some context, I helped David transition into early retirement. He has a fully prepared income plan, tax plan, and retirement-ready investment plan. Given David’s life goals and financial situation, he decided to retire a year ago at the age of 57, which most people would consider to be early retirement. It took several years to properly plan for the transition so that when the decision was finally made, there were no surprises. Certainly none on the financial side.
Back to our meeting. Once we covered the normal items on our agenda, to my surprise, David, with some noticeable hesitation, mentioned that he has some doubts about his decision to retire early. We are talking about someone who has always been “business-like” and hesitation and indecisiveness are not traits he usually shows.
As I listened to him, it became clear that his friends and family have been giving him negative feedback about his early retirement. Over the past year since he departed his employer, he had a chance to travel some, visit friends, and spend more time with family. All of those goals that he had on his bucket list. He even made some new friends in his community and on pickleball courts.
Invariably, the question "What do you do?" would come up. When David responded that he was retired, he was met with a few second stares, and some even remarked that he was "way too young to retire!"
As many of us know, the question “What do you do?” translates into “How do you contribute to society?” And the answer "I’m in retirement" is perceived by many as if you’ve stopped contributing and focus mostly on leisurely activities. Over time, these interactions with those close to him made David really unsure about his situation, to the point where he began to rethink his early retirement plan.
He even felt guilty about it.
For many, this can be far from the truth, as retirement means actually focusing on what you want to do, helping others since you have more time, and doing meaningful work that was not possible when you were employed full-time. As David and I kept talking about his situation, I remembered one of the best responses from one of the retirement coaches to questions of this nature:
Rest, Test, and Learn.
So, for those of you in early retirement (or even those who retired at a “normal” retirement age), when someone asks, “What do you do?” consider responding that you are “Resting, testing new ideas, and learning new things.”
We certainly believe you need to have 10 out of 10 confidence in the financial component of your retirement plan. This is the primary objective of my work.
However, as this interaction with David clearly shows, finances are not everything. You need to have a holistic plan for the next chapter of your life.