Updated: Jan 31, 2021
You know what scares me more than snakes, spoiled milk and performance reviews at work?
It scares the hell out of me. I think I have a plan, I'm executing against this plan, but I'm scared shitless. So many thoughts go through my head, so many what-ifs.
Luckily I have time to either find mitigation plans for these fears, or just become comfortable with them, except them and leap into early retirement full of bravery.
These are my top early retirement fears. None of them do I solve in this article, but I do hope to solve them over the coming years before I retire. Be sure to bookmark 3qfi.com to follow me along on this journey to see what answers I do come up with over time.
Let the horror story begin!
(Side note: there are some really great horror movies on Amazon Prime Video...sign up today to check them out).
What will my health insurance solution be?
Of all of the fears, this one is the biggest due to the total unknown nature of it. Who knows what the health insurance industry will look like when I retire early-ish in 2026. What will the federal government do by then? What state will we end up retiring to - and what will their health insurance options be?
I've been extremely lucky to have top tier health insurance for the past couple of decades through my employers, something I've oftentimes taken for granted. But that is going to change drastically when I no longer earn W2 income. Plus by that time my wife & I will both be over 50, so medical care needs will most likely increase. A solution must be found.
What if more of my identity is tied to my job than I admit?
This one is a bit darker from a psychology standpoint. What if I have more of my ego aligned to my career than I want to admit? When I retire early, will I feel like I'm not as worthy as I was when I was working? Will I feel insecure about who I am? Will I feel like inadequate?
I like to think that my career is just what I do to earn a paycheck and invest in the future. But I've poured a tremendous amount of time and energy in my career, to be as successful as I can be. What if that success defines me more than I like to admit? And my identity takes a big hit in early retirement?
What If my savings & investments don't hold up?
Am I putting too much faith in the 4% rule? Too much faith that the income streams I'm building in stocks, real estate and the music industry will be sound? What if all of this research and spreadsheet number crunching turns out to be incorrect? What if, in the end, I have no idea what I'm doing?
I tend to be fairy prepared, to research and plan for my future. I try to not leave too much to chance. But what if what I'm doing is wrong? What if I've found myself in echo chambers which are simply telling me what I want to hear? What if this plan is nothing more than a fever dream?
What if I’m bored in retirement?
So much of my time and mental energy gets poured into my career currently. What will I do with that time and mental energy when the career is no longer there? Will I sit around and gaze into the abyss? Will I invest more in some hobbies that I currently enjoy but don't have time for? Will I find new endeavors to focus on? What will I do!
Luckily I tend to fall into new adventures often. My life has been full of them, some of which I'll be documenting on the blog. I'm sure that my creative energy will allow me to find ways to occupy my time in engaging ways. But what if I'm wrong?
What if downsizing my life is something I hate?
Part of the retire early-ish strategy is downsizing our lifestyle a bit once the last of our children are off to college. What if this ends up feeling more like deprivation than I expect? What if I long for the previous lifestyle of living in a million dollar home in a affluent neighborhood and all of the trappings? What if I absolutely hate this new lifestyle?
I think we are going to be okay with this, my wife and I have aligned on a strategy that feels sound to both of us. But what if what we put on paper doesn't match the reality of our future existence?
What if the market takes a dive after I retire?
Over the long run markets generally go up. Okay, but what if they don't? What if the stock market has a decades + long correction? What if the real estate markets crater? What if there's hyperinflation? What if the dollar weakens?
I've really pushed to diversify our investments and where we'll generate future income. This should help us navigate future economic choppy waters but who knows for sure. There are so many levers that get pulled and pushed in the overall market, it's hard to have faith that significant bad decisions are not forthcoming. This could all be a house of cards in the end.
What if my kids need more financial help than I can provide?
I'm really hopeful that after college our kids are self sufficient, independent earners who forge a life path seeded by the fruits of their own labors. That being said, what happens if that doesn't pan out? If they need more financial support in early adult life than what we are capable of providing? How will we help them through the sticky life situations?
We've really tried to instill a strong work ethic in our children, to push them towards being self sufficient and independent. But there's only so much that's in our control as parents, the bulk of it has to come from inside of them. What if they fail to step to the challenge?
What if taxes go up more than expected?
It really is hard to plan for the unexpected - but what will the tax structures look like when we make the leap into early retirement? Taxes from all levels of government, from sales to income, from dividend to real estate.
I've got a CPA who helps me navigate tax environments, so we're doing what we can. There's just so many areas where the tax man has his hand strategically placed. How hard will he squeeze in the future? And are we prepared for these squeezes? It's impossible to know for certain.
So that's a walk through my mental house of horrors when it comes to retiring early. Many of these fears I'm going to just have to find a way of living with, while others I will be able to do something about. All of them I can and will prepare for.
That journey of preparation will be documented here, so stayed tuned - if you dare!
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Personal Capital: My go to place for tracking all things Net Worth.
YNAB: My go to place for managing my spending and budget.
Betterment: I use this account for general investment purposes.
M1 Finance: I use them for my dividend stock investments.
SoFi Invest: This is where I make individual stock investments.