Could You Move Your Retirement Date Forward, Instead of Constantly Pushing it Back?

If you spend much time around ordinary working people (as opposed to the uber wealthy) you’ll have noticed that everyone’s talking about pushing their retirement date back. Inflation is high, wages are stagnant, and depending on where you live, taxes may be going in the wrong direction.

It’s easy to assume this means retirement is getting further away, but knowing what you’re dealing with, and thinking through your options, is the first step to seeing if you can actually bring retirement closer, rather than pushing it back.

Invest to Beat Inflation

Inflation, and wages not keeping up with it, is a major reason that many workers feel that they’re going to need to push their retirement date back. Inflation in the USA, and worldwide, is certainly high, but how high is it? Official figures put the US inflation rate at 6.5% for the 12 months ending December 2022, but that’s deceptive. Everyone knows that the price of specific essential products, from gas (which rose 49% in the first half of 2022) to eggs, can fluctuate way outside of normal inflation levels.

Inflation does impact retirement savings, so it’s important to approach retirement with inflation in mind. You need to account for inflation by making smart choices with your investments and your asset allocation. Many people are still wary of investing, outside of their company sponsored retirement schemes, and to a certain extent, it’s wise to be cautious. It’s always advisable to do your research and take professional advice, but it’s also good to remember that over time, stock investments do tend to stay ahead of inflation (or at least that base rate of inflation that shows up in official statistics).

It’s also important to remember that while crazy price swings in essential products may seem scary, there are usually specific reasons for them, and it’s unlikely that they’ll continue at the same rate in the same direction. According to US Energy Information Administration, those gas prices fell again pretty quickly in most areas, and ended 2022 lower than at the start of the year.

It’s hard to predict price fluctuations that are tied to world events completely out of our control, but before abandoning the idea of early retirement we probably need to consider the bigger picture rather than “drawing a graph” where things always continue on their current path, taking our retirement ever further away.

Consider ALL Your Options

Many of us focus on the finances of retirement without considering the day-to-day realities. Considering exactly how you want your retirement to look is important, because it will help you define the level of income you need, which may be significantly different if you tweak a few things. We’ve talked before about how far you can stretch those retirement dollars in other parts of the world, outside of the USA. But even if you’re not planning a change of country, changes in retirement can impact the amount of income you need, and therefore the date you retire.

Are you considering downsizing your property, vehicles, or lifestyle? Moving out of state? Or drastically changing how you spend your leisure time? All of these can impact your outgoings, some of them in either direction. Some major expenses that most workers need to meet (from transportation to taxes) disappear or reduce in retirement, and it’s not unusual for people to over-estimate how much they’ll need. However, it is vital to think things through, because it’s fairly common for people to under-estimate their retirement needs as well.

Create a Customized Retirement Plan

Another thing that might enable you to bring your retirement date forward might be reconsidering what retirement actually involves for you. Workers everywhere are complaining that they’ll “never retire” but that might not be a bad thing. Rocco Pendola (publisher of the Never Retire newsletter) claims that not retiring can make for an amazing life, whether it’s by choice or not.

Most people don’t really want is to carry on into their retirement years in the exact same job and situation that they’ve always been in, and that’s understandable. There are however, all kinds of ways they could potentially supplement their retirement income.

This might involve using the specialist skills learned at work to consult, mentor, teach, write or podcast. It may involve working reduced hours or more flexible hours, doing seasonal work you love, or working short stints in the gig economy so you can travel the rest of the year. It might involve creating semi-passive income via an online business or store. I recently met a “retiree” who teaches art classes on cruise ships for a month at a time, and another who teaches conversational English from their new (retirement) home in Spain.

Not (fully) retiring can mean your late-in-life years are more interesting and fulfilling than you ever imagined. But it’s no good deciding these things at the last minute. If you want to bring that retirement party forward a few years, and continue to work and/or generate income in different ways, it’s best to have a plan in place well in advance, and be building the skills, contacts and resources you’re going to need.

What do you think? Is your retirement date still moving further away? Or are there options you haven’t considered that could impact it?

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen