How Early is Too Early to Retire?

Filed in archive Finance , Retirement on July 20, 2006

The Wall Street Journal's CareerJournal columnist Perri Capell is "retiring" at age 55. I put "retiring" in quotes because in reality she is still going to freelance for WSJ and others. On the other hand, she's giving up the full-time gig with the thought that she'll freelance occasionally to supplement her less-than-copious savings, so it certainly can't just be termed a career switch.

She got both applauded and dissed for her decision by readers. Some thought it was the smartest move ever, some thought she was simply going to lean on her husband for income and couldn't really be considered retired.

Personally I don't care, but I'm interested in the thought of an early retirement, and interested in the forms it might take. I've always heard that some retired people are bored stiff with nothing to "do", that recreation gets boring fast. I can't see it for me, but I'm probably at the busiest time of my life right now between my work and having small children, so a big dose of R&R sounds like heaven.

Maybe Capell has the right idea. In my mind she's really going to be semi-retired, and that might be the best of all worlds. While we're working, we think of all the other pursuits we'd rather be doing, but, given the chance to do them full time, we might find that we're not quite as passionate about them as we think. In the same way, work can be a drag, but if you had very wide latitude in getting it done and were working much less than full time, it could be fun, and you might miss both the work and the cameraderie of colleagues if you completely cut it off.

What's also interesting about the discussion is whether retiring without a complete safety net is foolhardy or not. How many of us are really going to be able to set up the perfect nest egg to take care of every need in retirement so that we can cut out of work and never look back? Judging by recent surveys, a lot of people are going to have to work a long time or drastically scale back their lifestyles. What if you decide to drastically scale back your lifestyle at a younger age AND work a long time, but part time? Is that any better or worse?

It's going to be fascinating to watch the baby boomers and see how they tackle retirement. I've already got boomer in-laws who are on the cusp--they're ready to be done and just might have the money to make it stick. But I wonder if my entrepreneur father-in-law can really leave 100%--the guy can barely sit still, he's going to retire?

What would you rather do, scale back at a younger age or work like a dog until a traditional retirement age and say "bye bye" for good?