Don't retire too early or too late.

We talk a lot here about when to retire. Beyond financial considerations there are also lifestyle considerations that make the decision/process complex.

On the financial side of the equation, you might have some sort of number in mind for what you think you need accumulated to meet what you expect your income need to be along with some sort of guestimate of how many years that accumulation needs to last. I have been of the mind that if you end up with 90% of what you think you need that you can probably make that work without too much discomfort. If someone winds up with only 40% of what they think they need then obviously there are going to need to be some serious changes, something or some things will have to give.

Many people also have very definite ideas on retiring young, late or never and these ideas can be influenced by need, preference or both. Health also has a seat at this table. It is not uncommon for people to have their hands forced due to health reasons.

Retiring early (whatever that might mean to you) has mixed results in terms of mortality. This article from Marketwatch says that retiring early from a job you hate or a physically demanding job can be a positive factor that lowers mortality whereas leaving work that is enjoyable and that provides purpose can have be a negative factor that increases mortality especially if there is no sort of purposeful, enjoyable endeavor that replaces it.

There was an excellent article in Barron's with one difficult story, one very positive one and some ideas about how to transition into retirement. The article started looking at a 72 year old retiree who lives in assisted living and has had other problems. There wasn't much detail as to how his situation evolved but it said he felt trapped. Regardless of whether someone wants to retire early or late, be busy as hell or do nothing, no one wants to feel trapped.

Without assuming any absolutes, the keys for not feeling trapped, or whatever your equivalent insecurity about retiring might be are behavioral and the transition mentioned in Barron's needs to start years ahead of time. The lead in for fitness and optionality of monetizing a hobby (whether that is part of Plan A or some contingent plan) are arguably lifetime commitments. While it is never too late to reap benefits from exercising, you'll be better off having always exercised versus waking up at 70 and deciding "today is the day I start." Likewise, you might be a literal overnight success monetizing some sort of hobby but the odds of success are much higher if overnight is more like a decade or two.

I've laid out my beliefs on early versus late versus never and all the rest but I try to be consistent in saying there is no single right answer for everyone, only for you. And the sooner you figure out your right answer, the better off you'll be. The other element of sorting out what you believe is right for you is understanding the drawbacks of what you want to do and figuring out how to mitigate the circumstance of having to confront something going wrong. If you want to retire at 55, some sort of unforeseen expense might leave you with far less than you planned on having when you're 70 and very healthy. What if you want, or on some level need, to work until 70? What if your hand is forced at 63 and you lose your job (this could be top down or bottom up)? What if at 63, you realize you were simply wrong about wanting to work until 70? You never know what the future you might want to do.

The article concluded with a sentiment that I have been talking about for ages related to optionality.

Maintaining your health and retiring debt-free is key, he says, but so is keeping busy. “I would be having a very difficult retirement if I didn’t have all these separate interests,” he says.

The way I have said the same thing is to say that every aspect of your life will be easier if you're fit and live below your means. Something unexpected could befall any of us, by definition, and the optionality you create for yourself will go a long way to determining how well you overcome the unexpected.