Perhaps one of the most difficult emotions to face when you are on the edge of retirement is fear. With an early retirement you are literally changing how you live on a very fundamental level (ie: living off your assets instead of generating more). So all sorts of questions come up: will my investments earn enough, what if inflation is higher, will my spending be higher than I predicted? Will I run out of money or just be bored?
At some point you have to face those fears and make up your own mind if you are ready. Five suggestions on dealing with fear are:
- Get a second (or third) opinion. Seek friends or family who are retired and professional input on your situation. They may all be wrong, but shopping around for ideas is not a bad idea. You might come across something that helps you decide you covered your bases or something you forgot.
- Do some scenario planning. Imagine various problems and try to come up with some creative solutions for them. Could you do some part time work if required? Could you sell your house and pay rent if you needed? Do you have some excess spending in your budget you can live without in a few lean years? Could you spend some more time with your investments and increase their return? Don’t focus on the problems, find the solutions.
- Remind yourself why you are doing this. Does an extra 10, 15, 20 years of complete freedom worth some risk? Write up a list of pros and cons, but make sure to put FREEDOM in big letters at the top of the pro column.
- Plan some activities. Worry tends to come about when you have too much time on your hands, so plan to be busy. That way you can keep yourself busy while your subconscious keeps working on the problem and perhaps finds a solution.
- Acceptance. If you are lucky some of the above will get you to this point. You realize I can’t know everything or even plan for it all. Life is full of surprises some good and some bad. So get busy living already and break out of the shadow of fear. Do you really think your last thought on this earth is going to be: I wish I worked longer?
This post is now part of the 140th Carnival of Personal Finance.