Why Can’t I Pull the Trigger on Early Retirement Despite Being Financially Ready?

A Reddit user in his early 40s is in a position where he can retire.

He has a wife and several children, and he also has a $6.2 million net worth. After subtracting for his house and 529 accounts for his kids, he has $5 million invested that he can live off. 

Unfortunately, despite having enough money, he said he’s unable to pull the trigger on retirement. Here’s why he is struggling, along with some details on how he can overcome his fears and enjoy the fruits of his labor.

Why can’t he pull the trigger on early retirement? 

The poster made very clear that he thinks he is in a good financial position to retire.

He has tracked expenses for years, and he’s confident his comfortable spending level with healthcare and quality of life improvements as a retiree would necessitate spending $165,000 per year. He has a side hustle that brings in $30K to $50K per year, so the rest of the income he needs would have to come from investments. 

Since he has $5 million, he said if he follows the 4% rule, he’d have $200K in annual income from his investments. That’s more than he needs, especially given the side hustle money. So, the math supports early retirement.

In his mind, though, he isn’t ready. The problem is he keeps considering the opportunity cost of what he’s giving up, including his fancy job title in the financial industry, peer admiration, and the potential to be much, much richer if he just worked another 10 years before retiring.

He basically explained that he can’t get over his ego, and he keeps thinking about all the stuff he could buy and do to have amazing experiences and impress people if he stuck it out. 

How can he feel better about early retirement?

Reddit posters had several suggestions for the original poster (OP) to try to help him feel better about retiring early.

One suggested that he shift his focus from caring what others think about his title and wealth to instead looking at what would be most personally fulfilling for him. Others pointed out that time has value and the OP would be giving up another decade of his life — and an important one, when he’s in good health and his kids are young — just to make more money that he doesn’t really need. 

Some other posters also had some stories of their own, including how they hesitated to retire early because they felt similarly, and commenting that they also lamented the income that they missed out by quitting.

However, the reality is, you are often going to be in a position where you could work longer and make more money instead of retiring early. And, when you’re making a lot of money, it can be hard to give up the prestige of a big paycheck and the potential to have a huge bank account. But, at some point, the extra money is just numbers on a piece of paper or a computer screen, and it doesn’t enhance your life very much.

In this case, though, the poster may not have gotten to that point. While he could afford to retire now, he obviously has dreams of doing even more with his life in his later years. If he thinks being super-rich would make him happier than just being sort-of-rich, and if he likes his job and wants to keep doing it, he doesn’t necessarily have to retire early, and doing so may not be the best path to his happiness.

Ultimately, the poster should consider talking with a financial advisor, getting an idea of what his life would look like both if he retired now or if he waited, and thinking about which vision of the future would make him happiest. He needs to make that decision based on his own desires, though, and not just on his wish to impress others who probably don’t think about him nearly as much as he would expect. 

The post Why Can’t I Pull the Trigger on Early Retirement Despite Being Financially Ready? appeared first on 24/7 Wall St..