It is sad to read about boomers who jump at the chance to retire early and are then told by a personal finance professional that for them, their decision to retire “early” actually meant “too soon.” That is the case for a boomer couple featured in a recent newspaper article.
This couple’s entire retirement nest egg consisted of $65k in taxable accounts and $77k in a retirement account. Even with cutting expenses to the bone (although they had a mortgage), their annual expenses exceeded their $46k pension income by $8,000! That of course doesn’t include buying a new car, replacing the roof,and other non-budget expenses. They would not be receiving Social Security.
Considering their combined life expectancies, their financial advisor told them that they needed to go back to work. Their plan was not sustainable. He also commented on how much financial opportunity was lost by making that early retirement decision.
The husband said this about his need to be retired from his job as a procurement officer:
I wanted my freedom. I consider procurement a ball and chain. It’s working with all these crazy regulations and frustrations and bureaucratic wrangling.
It sounds like desperation – not logic – was at the root of this bad early retirement decision. This made me think of a recent post I wrote for the On Retirement blog at U.S. News and World Report. In the post, I discuss how I redesigned my job to make it more enjoyable and therefore attractive for me to continue to work. Maybe this won’t work for everyone but you should at least consider it as an alternative to retiring too early and then being forced to “unretire.”
Here is the link to the full article: Early retirement sounds good, but costs plenty