The Downsides of Early Retirement & How to Overcome Them

Are there any downsides to early retirement? We often want to achieve financial independence as soon as possible. At least, that’s the goal in the FI circles I’m part of. Maximize your income, cut your expenses and invest the rest. The soonest you’re able to invest 25x your annual lifetime expenses, the better! You can call it a day or tell your employer that from now on, you’re working for fun.

And that’s all great. After all, the FIRE principles can teach us some great lessons along the way. Living within your means, not spending recklessly, avoiding lifestyle inflation every time we get a pay rise, strive for extra income, to name a few. It can even improve us in other ways that cannot imagine. I started focusing on self-improvement. For example, motivation and productivity while reaching for financial freedom.

Even if you can never achieve full financial independence the benefits are huge, anyway. 

But I want to take a moment and reflect. After reading a recent review of the Work Optional book, I feel I must pin down what life I want to live after becoming financially independent. Design my “next life”. To those of us that don’t have a dedicated plan of how to spend our time after FIRE, this exercise will be very valuable. Maybe not changing jobs or working part-time will be just what I need.

Because there are downsides to retiring early and leaving your full-time job. And I’m not talking about money here. Your investments will take care of that. I’m talking about all the other consequences. Here I list the most important early retirement downsides I could think of:

1) Risk of cognitive decline

My grandpa used to solve Sudokus and crosswords in order to exercise his mind when he was 80 years old. That’s in traditional retirement of 65 years old+. What if you retire at 40? 

Nobody wants to deal with office politics, bad bosses, annoying colleagues, daily commute etc. But solving problems as a working person keeps my brain power in shape. I’m exercising my mind. The risk of cognitive decline is definitely something I consider as a negative and it’s what worries me the most. I’m not saying that I will be watching Netflix all day. But it takes some discipline to work hard when you don’t have to.

2) Identity loss

I am associated with a professional identity that will be hard to remove. My social circle, family and acquaintances will no longer refer to me as a software engineer at Megacorp anymore. I will be just, Michael.

Now a part of me doesn’t care about titles and how people will think. But another part feels strongly connected with the technology profession. I feel I’d miss the profession and the problem-solving challenges it throws at me every day.

Am I willing to give up my tech identity? I may find out that working part-time or taking one short contract a year may be the ideal situation.

3) Lack of life structure

Financial independence will give us the power of not having to care about covering our transportation, housing, health costs etc. We can do what we want when we want it. But with great power comes great responsibility.

Currently, I cycle about ~1 hour a day. I will need a lot of discipline to keep exercising when I have no job. 
My life will lack structure which is both good and bad. 

Good because… you know, you can do whatever you want! Brew your own beer Monday mornings 🙂 Or you can go build a wood oven in the garden from scratch. You define it. That’s why people love weekends. Because nobody plans a schedule for them.

But lack of structure can be problematic because simply, you are responsible for building your own structure. There are some built-in benefits to a working life that are often overlooked. Routine is one. Your life has a schedule. Currently, my life looks like this:

Wake-up -> Cycle to work -> Work -> Cycle back -> Cook with my wife -> Eat dinner -> Read a book/Watch Netflix – Sleep.

foxymonkey daily routine
Ok, I must admit this diagram looks absolutely basic & boring 🙂 This is what you get for hiring a software architect to create real-world pictures.

Then weekends are lots of fun too but often pass too quickly. By the time we decompress it’s Monday again. If I live a life where I define my own schedule, I want to make sure I build one that makes me happy. Not one that removes all the pain from my schedule. Hard choices, easy life. Easy choices, hard life they say.

4) Will social interactions take a hit?

I’m quite an extrovert introvert* person. During the week, most of my activities come from work. Beers with colleagues or ex-colleagues. Tech meetups or an occasional tennis match. It is definitely possible to keep in touch with people you used to work with.

But what about 2 years later? What about 5 years later? You will keep having lesser things in common as time goes by. Will I be able to have the same level of social activity after leaving the workplace? Perhaps for an introvert that’ s not so much of a problem. But it may be for you.

*So after an intervention from my wife, I’m clearly an introvert. Some online tests also confirm this big time!

5) Lack of purpose

I feel like I’m achieving something at work. Ok, I’m certainly not saving lives, but even small tasks make me feel I have some purpose. I believe this will not be a big concern when leaving the workplace but just wanted to point it out. 

Right now I have so many projects I want to do. Like, write more frequently and make Foxy Monkey a better place. Create a software project I have in mind. Create a co-working space in Greece. Will I have enough motivation to pursue them once money is not a problem anymore? It’s not easy to create a purposeful life. Will I go after projects that fulfil me? Will I feel the same level of satisfaction in my everyday life?

That’s probably my biggest concern out of all the early retirement downsides.

6) Missing out on my potential

I am lucky enough to have a good reputation in the industry. I can get a job easily sometimes without even sending my CV, thanks to networking.

How will it feel seeing my peers in executive positions in their 50s while I slowly sip my coffee and enjoy life? Maybe I won’t care but there is a risk I will. Like this doctor I met in Greece who was wondering where his life would take him had he accepted the high position in Boston – I sensed a feeling of nostalgia and regret. I don’t consider this as a big early retirement downside, since I expect myself to be quite active post-FIRE.

7) Risk of not being able to go back to employment

That really depends on the profession. But in the tech industry, things move so fast and you need to play catch up every year. Even a single year away from coding feels like a century and your skills are gone. Let alone trying to explain a “5-year sabbatical” on your CV!

I feel there is a big risk of not being able to return to -at least a pure technical- position. So once I’m gone, I’m gone for good. Maybe other professions, say a plumber taking individual jobs won’t have the problem of applying their skills again. However, the loss of networking will be a big minus when coming back. There’s no silver bullet here.

Taking Action: Solutions to early retirement downsides

Having laid out all early retirement downsides I could think of, it’s time I take action. Without having read Tanja Hester’s book (yet) it looks I need to focus on 3 areas of our life. How to stay connected, stay creative and continue exploring. That’s according to my fellow blogger Done by Forty who created a similar diagram. Here’s mine:

How to fight the early retirement downsides
How we plan to overcome the early retirement downsides


On the creating front, blogging is definitely an area that I will keep growing. This will for sure help with the Connecting bullet below. Meeting likeminded individuals and writing my thoughts has always been very creative to me.

What about Mrs Foxy? She wants to create a business! She may be the one creating a co-working space after all 🙂 Or a supper club at home.


How will I build a sustainable circle of friends that make life fun? If I tell you to name your happiest moments in life, I bet they include other people too!

I believe we will meet lots of fun people in the activities we will pursue. We’re lucky enough to have deep connections with old friends and I expect that to continue too. Having friends to spend your time with is important, but making real connections is always hard to achieve.

I expect that having a kid will open the door to meeting other parents during kids activities. Last but not least, being more active with the personal finance community (offline) is always at the back of my mind.


Plans to explore other areas of the world. I bet slow travel will be one of my favourites. Taking the family around Cyprus for 2 months. Not for 2 weeks.

Weekend trips will happen more frequently. And so will long trips.

Yosemite Half Dome
From our US road trip, July 2018. Exploring different places will definitely help combat the early retirement downsides.

Most of the points I’m raising here depend on the individual. You may not care as much for the loss of identity. Or you may be more of an introvert which means smaller social circles won’t have a big impact on you. But planning your “next life” is something that you should not neglect until you’re financially independent. 

Agile FIRE

I want to avoid the early retirement downsides as much as possible. How does one transition to FIRE? In software engineering we have a term called agile. Changes are implemented iteratively and are monitored closely before introducing more. It now has become industry standard compared to the waterfall approach where software development phases come in Big Bangs. 

You see where I’m going with this. Is there a way to smoothly transition to my life after FIRE without having to BIG BANG it? Planning to take advantage of a low expenses lifestyle in the Mediterranean doesn’t help given we live in London. That’s a big bang on its own, let alone all the lifestyle change that will take place from our transition to financial independence.

The grass is not always greener on the other side… How can we peek in an agile way so we avoid all early retirement downsides?

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4 thoughts on “The Downsides of Early Retirement & How to Overcome Them”

  1. What about not retiring early, but taking that 6 month cycle break in between contracts?
    Your article reminded me of this guy:

    I unknowingly find myself following his advice; I’m new to contracting but not to IT, I’m in a six month contract and I intend to take at least 3 weeks of at the end of it. If I can apply some of the FIRE principles you talk about, after contract 3-4 I might be able to take 6 week breaks off in between contracts.

    Why do I want to do that, rather that retire early? I have a 2 year old child, and want to spend quality with them now, not in 20 years.


    • This is a very interesting thought Darryl and thanks for the amazing video. I need to remind myself of TED, I keep forgetting it exists!

      A few people I know do this and they call it “semi-retirement” or 6-3. Basically, taking a 6-month contract and then 3 (or more) months off. I think you are definitely right. Spending quality time with your kid now is very valuable. It won’t be the same when they will be 20 years old.

      Maybe my thinking will change once the young one comes out 🙂 But for now, I want to focus on full FIRE until I get to a decent number of passive income. Good luck and I’d be very interested in hearing about your sabbaticals and their effect on you.

  2. These are _EXACTLY_ the things I fear most about FIRE.

    I would like to add charity to the list of solutions. I believe that for me, finding something I can do to make the world a better place when I have more time, should be pretty purposeful.

    • Hi Eelis, glad you found it useful. Charity and volunteering is definitely something I missed! If you can combine it with something you’re passionate about, then I think you can help people while staying motivated.


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Hi! I’m Michael and I love writing about different ways to earn, save and invest our money. Coffee addict :)

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