Is “early retirement” another pot at the end of the rainbow?

Sonnie Bailey

28 February 2020

What does “retirement” mean to you?

In the last year or so I’ve spoken to a lot of people who are attracted by the idea of retiring early.

It has been an interesting exercise. Because those same two words mean different things to different people.

Of course, different people have different expectations regarding their retirement lifestyle and how much it will cost. But it gets more interesting than that.

Some people equate early retirement with stopping work completely.

For many others, they still want to work. They just want to do it on their own terms.

Lots of people love the thought of working because they want to rather than because they have to.

They also want to work on the projects that most engage them: either because the work plays to their strengths or pleasures, or because they think it will have a bigger impact than what they’re doing.

Some people have an itch to scratch and want time to focus on it.

For many people, retiring early isn’t about retiring from work. It’s more about changing their relationship to work.

When I talk about goals with clients, I’m careful to distinguish between end goals and instrumental goals.

It’s not uncommon for Kiwis to say they want to build a property portfolio. For example, they want to have three mortgage-free properties by the time they retire.

That’s a goal, but my hope is that it’s a goal to an end.

The more important and interesting question is: why do you want this goal? Perhaps you want to generate a reliable, relatively passive income.

Why do you want passive income? And more importantly, what will that mean to you when you get there? What will you do differently?

The idea of “early retirement” isn’t necessarily an end goal.

Why do you want to retire early?

What does retiring early actually meant to you? What does it look like?

I spoke with some clients recently who said that it meant freedom. Many people say the same thing.

When I ask clients about any goal – whether it’s early retirement, buying a Tesla, or building a passive home – I also ask about the trade-offs they’re prepared to make in order to achieve that goal.

For instance: if you had the option between retiring early in 5 years’ time, and working enormous hours in order to achieve it; or you could retire in 10 years’ time, but work at a more leisurely pace; which would you choose?

Would you move to a less expensive home in order to retire early? Give up on holidays? Wine? Sell your car and bike everywhere?

Everyone has a line. Where is the line for you?

There are many ways to define “retirement”.

Part of this definition relates to your relationship to work.

If you enjoy your work, it fits with your lifestyle, and aligns with your values and priorities, is there any major difference between being retired and not?

What instrumental goals are you trying to achieve?

If freedom is important to you, instead of making sacrifices and accumulating capital (eg 25 x your expenditure (ahem…)), might there be other ways of getting there?

Is early retirement the goal, or is it something else?


Here’s something else I’ve been thinking about. You’re probably aware of the idea of the hedonic treadmill, or hedonic adaptation. The basic idea is that whatever our circumstances, we return to a relatively stable level of happiness.

Is retirement likely to solve this tendency for you?

For some people, maybe it will. Especially if your working life isn’t a good fit for you. But what if you have a life, and a relationship with work, that works for you? Are you likely to end up any happier or satisfied?

I don’t have an answer to that one. Maybe the answer is different for you than it is for me. That’s okay. We’re all driving the personalities we’ve been given.

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