Why Waiting to Retire Might Be a Costly Mistake
Why Waiting to Retire Might Be a Costly Mistake
Hey there, future retirees! 👋 Let’s dive into something that could change the way you think about retirement. If you’re like many people, you might assume that you’ve got all the time in the world before you need to think about retiring. But guess what? Waiting might not be the best move for you. Let’s unpack why that’s the case.
1. Time Is Finite—Don’t Assume You Have It All
Here’s a reality check: time is not unlimited. We often think that because things are fine now, they’ll always be this way. I've spent countless hours advising on retirement, and I can tell you that the base setting for a lot of folks is that we think whatever is currently happening will continue to happen. When my son was a newborn, he was up all night, he was a terrible sleeper, and I was completely sleep-deprived. At that moment I felt like it would never end and I was destined to be sleep deprived forever. Now if you're reading this, and you've got children older than newborns, you know that eventually they start sleeping through the night, but when you're in the thick of it it certainly feels like this is your new forever.
Just like how challenging phases eventually pass, your current reality will change as well. What does that mean for your retirement? Well if you're just marking time, and continuing to work when in reality you may be wasting some of the best years of your life stuck behind a desk, or tied to your 9 to 5. And while that time is passing, your ability to enjoy certain activities, things you love could be passing as well. If you love biking or traveling, consider that there may come a time when you can't do these things as easily. Hiking the hillside in Italy might be fine today at 55 or 60. Are you going to want to do it at 75 or 80? Spending a 12 hour day at Disney with the grandkids might be doable now - but will it be doable forever? Waiting too long to retire could mean missing out on your bucket list experiences when you’re in your prime.
2. You’re Trading Time for Money—Make It Count
Every day you work, you’re trading your time for money. The goal is to reach a point where you’ve accumulated enough assets to buy back your time. Retirement is all about gaining freedom—the freedom to spend your days as you wish, without needing to exchange time for money anymore. You see retirement isn't just about the resource of money. It’s about balancing act between all your resources: time, money, health, and energy. If you’ve reached a financial point where you can retire comfortably, why keep trading more of your precious time for more money that you might not even use?
3. The Retirement Trade-Off—It’s About More Than Money
Think of retirement like this: You start with lots of time and hopefully good health. As you work, you’re spending some of that time and health to save up money. Once you have “enough” saved, the idea is to retire and start spending your time enjoying life. However, many people delay retirement, thinking they’re just working a few more years for a bigger account balance. But here’s the kicker: you might be sacrificing the most vibrant years of your retirement for a larger savings account that you may never fully use. The quality of those retirement years matters more than just the quantity of money you have.
4. The Current Climate Is Ideal for Retirement
Right now, the financial landscape might actually be in your favor. Many retirement vehicles and strategies are interest rate sensitive. If you are using bonds for retirement income - you can lock in higher returns now than you would have been able to 3 or more years ago. If you are looking to use an annuity to create lifetime income you can get a higher monthly payout now, as a result of higher rates than you would have been able to before 2022. Here's the rub - at some point interest rates will change, and when they do, you may go back to the space of not being able to get the same levels of income.
5. Overcoming the Fear of Retirement**
I understand that sometimes the decision to retire isn't just about money. That you may have concerns about losing your identity, based on what may be a 30 or 40 year career that will stop. You may have concerns of exactly what you will do with yourself when you retire. You may worry about the hole that losing that purpose brought on by your career gave you. All of these are valid, but all of these are things that can be planned for in advance.
I will tell you this however, I've talked with countless people about retirement, and while I've heard from a number of people who have expressed regret for waiting too long to retire, I'm yet to meet the person who retired earlier than planned and then regretted it. While it's important to plan, fear shouldn’t paralyze you. A good financial advisor can help you navigate these fears and create a solid retirement plan.
If you’re at a point where you think you may be able to retire, don’t let fear or habit keep you working longer than necessary. Time is a resource you can’t get back. Enjoying those retirement years while you’re still healthy and active is priceless. If you'd like to see if you're there, and you'd like some help developing a personalized plan for your own retirement, set up a time to chat with us right here.
