Ask five people what it means to retire early and you're likely to get five different answers. Some would consider leaving work before age 65 as early retirement, while others would argue that it has to happen before age 45. Regardless of how you quantify “early,” saying adios to work isn't necessarily the solution to a happy and fulfilling mid-life experience. Many people who long for early retirement may have never known true job satisfaction. A better goal for some may be to shoot for a mid-life career change instead of an early retirement.

Why People Retire Early

Why do people retire early? Sometimes it's unplanned: a layoff, a long-term illness or caring for a loved one. In these cases, early retirement may be unavoidable, whether you're ready for it or not.

Other times, it's a conscious move to pursue personal interests, be it travel, training for a marathon or becoming the watercolorist you always felt you were meant to be. Early retirement (or the desire to) can also serve as a means of escape from an uninspiring career, a toxic work environment or a frustrating job with no room for creativity or advancement.

Either way, retiring early may not be the answer you're looking for. Keep in mind that retiring early has its own challenges, and a career change might allow you to continue working while doing something that you find more rewarding and that improves your overall quality of life.

Challenges of Early Retirement

The most obvious challenge to retiring – early or not – is having enough assets to provide the level of income you'll need. The earlier you retire, the more assets you will need to compensate for the potentially decades-long period that you won't be earning wages. If you retire at age 45, for example, will you have enough to live comfortably for the next 50 years? And what if some of those years require expensive medical care?

Social Security

Maybe you’re counting on Social Security? The age at which you start receiving Social Security retirement benefits has a significant impact on your monthly benefit amount. The earliest you can start collecting Social Security retirement benefits is 62, but your monthly amount will be permanently reduced. Your full retirement age (67 if you were born in 1960 or later) is the age at which you can start collecting full or unreduced benefits. If you wait until after your full retirement age to start receiving benefits, you may be eligible for delayed retirement credits that would permanently increase your monthly benefit (there is no further benefit increase after age 70, even if you continue to delay benefits).

Retirement Accounts

Many people rely on retirement accounts to help fund their golden years; however, early withdrawals from a retirement account such as an IRA, 401(k) or 403(b) may be subject to a 10% penalty tax in addition to regular income taxes. The penalty can be even higher if you take an early withdrawal from a SIMPLE IRA. If you wait until age 59.5 to start withdrawals, you can avoid the penalties.

Non-Financial Challenges

Aside from the financial challenges, not working frees up a lot of time. Do you have enough hobbies, adventures and pursuits to keep you occupied and engaged for the next 10, 20, 30 or 40 years?

The workplace also provides a social outlet, and for many people, it's their primary means of socializing, either directly at work or through work-related outings. Some people may be perfectly happy staying home and talking to nobody but their pets, but most of us need some human interaction on a regular basis. If you leave the workforce, will you have enough opportunities to fulfill your need to be social? Do you have an existing network of friends and family outside the workplace?

Some people may also experience an unexpected side effect of retirement: explaining to other people why you no longer work. For some, this is as easy as stating they are financially self-sufficient and leaving it at that. Others, however, find it difficult to face judgment (whether real or imagined) from people who question their decision to leave the workforce early or who suggest they should be working to contribute to society. Will you feel adequate without a job title? Will you be confident telling someone you no longer work, or will you feel guilty or defensive when asked what you do with your time?

Changing Careers

According to a poll by the Associated Press, 82% of working Americans over age 50 indicate it is likely they will work for pay during retirement, and 47% of people working now expect to retire later than they originally planned. Many of those working longer are choosing to start their own businesses: Data from the Kauffman Foundation show that in the United States, the highest rate of entrepreneurship has shifted to the 55-64 age group. The research also shows that people over 55 are nearly two times as likely to found successful companies as those between 20 and 34 years old.

Depending on your age, you might expect to spend anywhere from five to 30 years in a second career before actually retiring, so it's a good idea to think of ways to combine your existing skill set with your interests to create work that is rewarding. Have you been an ER nurse in your local hospital for years but long for more travel? Consider becoming a travel nurse. Are you an experienced attorney, computer programmer or human resource professional with a cause? Consider switching to the non-profit sector to assist a greater purpose you believe in. Like the idea of running a bed and breakfast, or offering kayak tours? Put your management, marketing and customer service skills to work and start your own small business.

Remember when you were young and everyone asked, "What do you want to be when you grow up?" You may have answered anything from an archeologist to a ballerina to a rock star. Somewhere along the way, if you are like most people, you let that dream slip away because your interests changed or it no longer seemed practical. You might even remember the exact moment you gave up on your dream - a job offer you couldn't refuse, a friend's reaction to your big plans or a bump in the road that sent you down a different path.

A second career is a great opportunity to rekindle those earlier dreams, even if you adjust them slightly. If you dreamed of being a rock star, you could put your music skills to work and teach guitar. Or, if you wanted to dig for dinosaur bones, you might look for work in your local natural history museum. Too late to become a ballerina? Open a dance studio in your community. However, you don't have to recreate a childhood dream to have a fulfilling career change. After decades in the workforce, you might have the knowledge, energy, talent and time to devote to a whole new career path that can provide both a paycheck and a purpose.

What if your skill set doesn't match your dream for a second career? It's never too late to learn new skills through education and training. Professional programs, graduate schools and community colleges cater to people who have work and family obligations, offering evening, weekend and online classes to provide students the flexibility they need. If you plan it right, you can complete the necessary coursework while still in your current field, allowing you to “hit the ground running” when you do switch careers.

The Bottom Line

Not everyone has a choice when it comes to retirement. A job loss or health problem can result in an unexpected early retirement, or your financial situation could keep you from retiring as soon as you would like. If you do have a choice, it may be worth considering a second career over leaving the workforce altogether. A different job, whether it draws on your existing skills or enters totally new territory, can give you a platform for pursuing your interests while keeping you engaged, productive and financially sound.

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