Early Retirement or Career Change?
The choice between retiring early or changing careers can be a difficult one for someone caught between jobs toward the end of their career. This is a decision that can come upon people unexpectedly and suddenly, whether their hand is forced by unexpected redundancy, corporate restructuring or just a downturn in the economy.
The twilight of your career is supposed to be the most lucrative phase, when you have finally scaled the heights of the corporate ladder and are earning more than at any other time in your life but for some, that dream has crashed and burned unexpectedly. The decision on what to do next is largely led by your financial situation.
Can You Afford to Retire Early?
This is really the key question that all of the other questions hinge on. Have you met your money goals for financing your retirement? What would your financial situation look like if you were to retire today? Would the combination of your savings and investments be enough to sustain you over the longer term or would you have a lifestyle that is way below what you had always hoped for?
How Can You Reduce Your Outgoings?
Tightening your belt as your finances shrink can help the money that you do have to go further. What lifestyle compromises can you make fairly easily to reduce your outgoings? You used to go to the cinema regularly and had a monthly subscription, but you haven’t been since the Covid-19 pandemic, so that can be scrapped. You haven’t played golf in years, that expensive club membership can be allowed to elapse. Do a firm but fair audit of your outgoings and decide what you need to keep and what can go, in order for you to still be happy.
You will no longer be commuting to work, so you can take that out of the equation. No more expensive snack foods and coffees from overpriced city-centre shops. You will be surprised when you realise how much you were spending on those. Socialising after work can also cost a lot of money, as can smart clothing required in most office environments. These can also be cut. Look at whether you really need that second car or whether the household can make do with one.
Can You Become a Freelance Consultant?
In the later stages of your career you will have gained experience and skills that are ideal for launching your own freelance consultancy. You will have made good contacts throughout your career that will stand you in good stead if this is the route that you decide to go down.
Companies that may not hire you for a full-time job at this stage in your career may hire you as an outside consultant for a set number of hours per week or month. You will most likely earn a higher hourly rate as a consultant than you did while you were working full-time. The beauty of consulting is the balance between work and free time that it offers. It is an ideal step between working and retirement as it allows you a taste of the freedom that will come with retirement while at the same time paying a decent amount of money.
Evaluate your skills and look on the internet at consultancy and freelancer websites to figure out what would be a reasonable amount to charge for your services. Be sure to charge what you are worth and don’t be caught in a race to the bottom with people from other countries who may lack much of your experience and many of your skills.
Monetising a Hobby or Taking a Side Gig
Everyone has hobbies and things that they enjoy doing in their spare time. Evaluate what you like to do and take a look to see if it is possible to repurpose a hobby as something you can make money from. If you have always wanted to write a book, now is the time to go and write it. If you have been learning computer coding for years, maybe now is the time to put it into practice for profit.
Many freelancer websites have a wide variety of potential ways of making money and you should take the time to explore some of them to see if any would be a good fit for your skill set. It may feel strange to take a step down and take a lower-stress but also lower-paid side gig, but it may also feel like a relief after a lifetime of high-stress jobs.
Working for yourself and being your own boss can be a freeing experience. You don’t have to take on any clients that you find objectionable and it is entirely up to your discretion whether you engage with someone at all.
Reducing Debt Liabilities
Examine your finances to see if there are any debt liabilities that you can reduce. Consider using any redundancy payment you may have received to pay off your debts as far as possible. This will mean that if you do decide to retire, you will not be spending your fixed resources on paying down debts. This can make a real difference to the amount of money that is available to the household.
Retirement Location / Geoarbitrage
The amount of money that you need to live comfortably in your retirement can be affected by the decision of where to retire. These days there are options all over the world. It is possible to retire with quite an average amount of money for the UK but to live well in a country where your money goes further and the weather is better to boot.
This is often called Geoarbitrage and many people live in different countries at the moment due to remote working. They can get paid in a high-performing currency and pay bills in a lower-performing currency and this will help to make their money go further. The same goes for retirement and there are many lovely countries that are worth considering.
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