HOW TO “QUIT YOUR DAY JOB”

HOW TO “QUIT YOUR DAY JOB”

Have you ever lamented that you wish you could “quit your jobs yesterday?” With corporate cultures becoming more and more demanding, it’s no surprise that burnout is happening well before traditional retirement age. But, you’re way too young to quit at 50. In fact, most people at 50 still have dependent children and an underfunded retirement.

So what do you do?

Check out our outline below for some starters of ways to improve both your lifestyle and your finances

Clean Your (Financial) House!

If you’re feeling totally exhausted over your current job, it’s important to first take stock of your family’s life. This could, indirectly, involve actual cleaning! Mainly, we’re saying it would make good sense to create a financial plan –or better yet, to meet with a professional who can help!This should involve writing down what makes you both happy and unhappy about your current employment situation. Then, with your spouse, you outline some goals and objectives that will enrich life for both of you.

A part of financial planning involves taking a complete inventory of your finances. Especially if you work with a professional, you’ll be challenged to tackle those often-neglected financial to-dos. Is there some lingering debt you haven’t got around to handling? Do you have a variety of old accounts that ought to be consolidated? Are there areas in your spending that could be reduced or eliminated? A comprehensive financial plan will address all of these items and more, and truly help you and your family tackle your goal of a career change.

If your future goals don’t line up with your present, a good advisor will challenge you to start making changes. This could involve things like saving more to anticipate a reduction in income from a career change, and lifestyle modifications if you’ll be in a lower-paying career. Say for example that you remain at your current job to pay for your large house. It’s important to think about the real value that the physical house provides to your family, versus the home environment. Are there rooms in the house that go unused? We’ve had many clients conclude that the big, suburban single family home simply isn’t worth it anymore once the kids get close to college age. If downsizing a bit early can help reduce the financial pressures on you, this would be an excellent consideration.

Change of Scenery

Once you feel like your personal life and financial situation are in order, it’s time to really think about what a change of scenery could look like. A place to start is to think about your future living situation. Traditionally, retirees have relocated to a smaller home in a warmer climate; but we don’t necessarily consider that the default option anymore. Instead, we’ve found that many folks enjoy living in a smaller home in a more urban environment!

We think it’s more important to focus on how you spend your time in retirement versus where you spend it. This could (and arguably, should) involve a career change. We encourage a second career for a variety of reasons. First and foremost, it’s a great way to provide an additional stream of income for retirement. If you have a couple years early on to work, this allows your nest egg to grow and compound. If you know anything about compound interest, savings rates (or withdrawals) matter most in the early years. Yes, this means that you should encourage your 20-something child to save as much as possible for her retirement. But this also means that you need to be careful when depleting your own savings in your 60s; don’t forget that these dollars need to last you for 30 years or more! If you can delay early withdrawals near the beginning of retirement, you’ll have more to compound over that extensive period of time.

As well, a second career keeps your mind active. Think about it – you’ve likely been very intellectually challenged for 40+ years in a career; won’t you get bored completely “turning off” your brain? Retirement of the 2010s and beyond is more about freedom than relaxation. This freedom should certainly involve more leisure time; but it also allows you the opportunity to reinvent yourself. It could be a great way to give back to your community, explore your creative side, or really dive deep into something interesting. Funding retirement is simply a math problem; finding your passion is the real challenge.

How do you find this out? One interesting suggestion we’ve heard recently is to contemplate a sabbatical. Once you’ve determined that your finances are in order and you are ready to quit your primary occupation, we advise you to take some serious time off. This could last 6 months or even a year. During this time, we advise you to take a complete break – take a vacation, spend time with family, complete those nagging chores around your house, etc. That decompressing time should last about 2-3 months.

After that, we really advise you to think deeply about something of greater interest to you. Is there a local non-profit that tugs at your heartstrings? Reach out and see if you can volunteer. Have you always wanted to learn a new language? Sign up for a class at a local college. Are you interested in another career? Network with folks in that industry, and see if they’re hiring part-time. Try something different for several months, and see if you might want to develop a longer-term plan around learning, working, and giving back.

Give Yourself a Break!

Figuring out how you’ll spend the next 20 or 30 years of your life is a daunting task, so please don’t forget to give yourself a break as you go through this exercise. Some of your friends might figure out their new life plan quickly; and that’s great! But, if that doesn’t happen for you, don’t worry. Remember to enjoy yourself and not stress!

If you’d like our advice or ideas, feel free reaching out to us at nicole@prismplanningpartners.com