Early retirement may seem to be the end of the line for some folks, but is an exciting future for those who have been working all of their lives.
The term early retirement has some negative connotations for some people. Also called voluntary retirement, it is defined as a full exit from a career path, or from a company or organizational job. To some individuals of a certain age or at the mid or late in their career life, it can be the end of their working life, especially if they have not hit the mandatory retirement age, which is 65 years old in the Philippines. The decision to go for an early retirement means easing out of their attachment to work may be disconcerting for many, especially those who feel like they can still have more to prove to themselves or to their peers.
But for those who are looking forward to a life where they pursue their own passion, or simply a life where they can just take it slow and enjoy every moment, early retirement is a new, exciting beginning. It can be more precious and sweet if you have built yourself a sweet little nest egg, have solid investments like luxury real estate or have a luxury mansion house to come home to.
But before we highlight the benefits of early retirement (and before you start dreaming of owning one of the most beautiful houses in the Philippines as your retirement house), let us first understand what early retirement actually is like.
What Actually Happens When You Retire Early?
It can be many things, but early retirement definitely gives you more time to pursue your passion or time to savor life’s offerings.
The most obvious fact when you retire is that the routines in your working life will suddenly disappear or be reduced to a bare minimum. While some will completely retire from their actual jobs, some will still work in a reduced capacity, such as on a project-based or consultancy basis.
Some will take the opportunity in starting a career path that is completely different from what they are used to doing.
Regardless, the early retirees will often include something to do in their plans that will not make them idle. And usually starting from scratch and wanting to accelerate success would mean spending some of that retirement money. And because you are pursuing something of your interest, you are willing to part your hard-earned retirement money because it is something that you wanted to do. Every expense towards something of passion is considered an investment.
For those who just wanted to take it slow in their early retirement, it may mean also spending money to make life convenient. They buy properties for sale to earn rental income later, or snap up a luxury house and lot for sale as their dream home and furnish it with the latest appliances, fixtures, and furniture.
But as you usher into a new lifestyle, it also means considering the reality of what happens when you retire early. And this means financial security. Prior to early retirement, earning a salary monthly provides financial security. Losing this upon early retirement means not being able to receive the money you use to earn. If you’re not careful in managing your finances, you may end up regretting financial decisions that didn’t work longer.
Benefits of Early Retirement
Early retirement can be a huge opportunity for those who are seeking more to life, but can be a nightmare for those who do not prepare nor are prudent with their financial decisions.
We list some benefits and disadvantages of early retirement to help you make the choice:
1. Early retirement may be good for your health
Work requires a rigid schedule, more so for people who are in managerial or executive positions. The many responsibilities you have, the less time you actually have for yourself to even do the most basic of activities, like eating lunch or sleeping a recommended 7-8 hours a day. Leaving the office grind behind when you seek early retirement allows you to take back the time to take care of yourself, including actually sitting down and eating a meal properly, and getting the required number of hours of sleep.
Moreover, the responsibilities that come with the work will naturally be no longer your worries. And that is significant, especially for those who experience work stress almost on a daily basis. People with higher-level jobs may look forward to the day where they no longer carry the weight of the worries that come with the job.
However, there are studies that suggested that the empty space once filled by work may be detrimental to the mental health of early retirees. This study said retirement is actually not doing wonders for one’s mental health and mobility. The study also highlighted that some retirees even experience illnesses such as a stroke after they retire. While the lack of social and physical activity may be the cause of such health woes, retirees who continued their regimen of a good diet and rigorous exercise. Moreover, those who remain socially connected were less likely to suffer any ill effects.
2. Early retirement means having more time to go on a leisure travel
Imagine the places you can go to! You are no longer limited to your availability. You can simply make a plan to go somewhere you want to go for the longest time, and even extend your vacation if you are thoroughly enjoying the place. Moreover, if you are at the prime of your life, wouldn’t it make sense to travel now instead of later, when you are experiencing health or mobility issues? Early retirement allows you to travel and experience places beyond the usual tourist trap. If you are the adventurous type, you’ll even find yourself immersed in physical and social activities that will require your sharpness and strength, two qualities that may no longer be present when you are a senior citizen.
3. Early retirement means the start of a new career
For some, leaving the company does not mean that they stop working. Early retirement can mean the beginning of a new career that is a total 180 from your old one. Even celebrities, musicians, and sports legends do this. Michael Jordan, for example, retired early from basketball, and started a new career in baseball, even in golf! Actress Cameron Diaz seems to be retired from acting and is focused on her family and her winery business.
So if you dream of switching fields or starting your own business, then retiring early may seem to be a good option for you. You have the wits and the energy to focus on your new career and do everything to get it off the ground. While it is possible to start a business at age 60, it doesn’t mean that your mental and physical health may cooperate with you. Doing it at, say around 40 years old, will allow you to pursue your dream, even in the next 20 years.
4. You have total ownership and responsibility of your retirement savings
When you opt for early retirement, especially from your role at a company or organization for how many years, you get the opportunity to choose how your hard-earned pension gets disbursed to you. Some offer lump-sum payments, which are of significant amounts that you can already use towards something of high value, like luxury real estate, a new car, or even one of the most beautiful houses in the Philippines.
Others, on the other hand, may opt to receive their pension as if they are still receiving their monthly salaries. The monthly pension is usually similar to what you receive while you were working. And because you are no longer working, you no longer need to concern yourself with work-related expenses such as transportation, business meeting lunches, and whatnot. There will be days where you will opt to rest and stay at home, and therefore inadvertently save a little in living expenses.
While this may seem to be ideal, you do need to bear in mind that should you decide to retire early, your retirement savings will have to last longer. You will need to be responsible with every peso you spend moving forward. And if you have not made any investments that will provide supplementary income, relying solely on your retirement savings may not be a good idea.
As such, if you do consider early retirement, it is important that you also plan to introduce supplementary income to your retirement savings, especially well after you plan to stop working. Your expenses will not decline during retirement and sometimes may balloon, especially if you have reached a certain age, or God forbid, pre-existing conditions may manifest. As you grow older, you tend to outsource more for the sake of convenience, which will add a new layer of living expenses. It is important to invest in assets that can sustain potential, and hopefully, inevitable growth that can help tide spending over the rest of your lifetime.
Retiring Early? Invest In Assets that are Worth Your While
Investing in luxury real estate not only provides a comfortable roof over your head, but will also support the lifestyle you dream of upon retirement.
If early retirement sounds great to you for whatever reasons it may be, then good for you! Before you take the plunge though, you do need to make sure that you have the retirement savings enough to cover your passion and continue your lifestyle.
There are plenty of rules of thumb when it comes to determining how much do you need for your retirement savings. A common piece of advice is that you need to have retirement savings that are 80 to 90 percent of your yearly pre-retirement income, which is 12 times your salary pre-retirement. Now the amount might be big or too small for you because it really depends on how you intend to live your life upon early retirement. Moreover, there are factors such as inflation, medical issues, or other life events that may force you to dip in more than you use to.
The pandemic, however, highlighted the importance of investing in living spaces. A home that is not only able to provide comfort and expanse while remaining confined during these uncertain times is now sought even by early retirees more than ever. What better way to spend retirement than in a luxury house and lot that has lots of space, amazing architecture, better furnishings, and is located in a prime location? And if this luxury real estate is located in the countryside but still has access to modern conveniences? Not only it provides an ideal permanent home that can support a comfortable lifestyle, but it is also a high-value asset that can grow with you, like Crosswinds Tagaytay.
Crosswinds Tagaytay is a Swiss-inspired resort development stretching over 100 marvelous hectares of land featuring breathtaking vistas and vantage points that feature the lush, rolling terrains that draw vision towards the aerial views of the rest of Tagaytay City and Metro Manila. Anyone who has taken a drive on the rolling terrains of this idyllic resort development feels a sense of ease, comfort, and relaxation from the cool climate and the majestic nature of Tagaytay
Moreover, Crosswinds Tagaytay prides itself in offering prime properties that bring nature closer to you. And if you plan to spend the rest of your retirement in a prime location away from the city like Tagaytay, or simply want a vacation home to come to once in a while and lease it out the rest of the year to tourists, Crosswinds Tagaytay can provide that laid back and relaxing lifestyle.
Investment-wise, what is not to like about owning a property at the only pine estate South of Metro Manila? With over 35,000 lofty pine trees surrounding the massive mountainous development, the ambiance and the location add a premium to your luxury mansion house.
If you are not keen on staying at home, feel safe by exploring the development and neighboring points of interest such as Picnic Grove, People’s Park, the Tagaytay Sky Ranch, and premier golf courses such as the Splendido Taal Golf Course. It is also close to top medical facilities such as Tagaytay Medical Center, De La Salle University Hospital Dasmarinas, and Tagaytay Medicare Hospital.
Best of all, you get to enjoy the luxury real estate investment at the prime of your life, when you have the energy and vigor to enjoy every moment.
So if you are tired of the working life, early retirement may be the best idea at this point in your life. But before you do, prepare the way towards that life, rather than life having it forced on you because of job loss or ill health.