What if you wake up one day and realize you really want to retire early? Nay – you need to retire early. Your job is slowly killing you and you can’t take it much longer. Okay, that was me in 2010, but you get my drift. If you’re married, then your next step would be to announce the early retirement idea to your better half. This is when SHTF, as the prepper community would call it. BTW, it probably isn’t a great idea to blurt this out when your wife is pregnant. (Yes, that was me…) In any case, it is imperative to get your spouse’s support if you want to retire early. This could be difficult because early retirement is usually inconceivable when you’re under 50.
A while back, I had coffee with Iris, one of our readers. She was an apparel designer for a well know local company and she was very stressed out about her job. She wanted to leave, but her significant other didn’t support the move. He said she should bite the bullet and keep working there because her position was very well paid. I advised her to save as much as she could and keep talking to her partner. It is much easier to work on big financial issues as a team. Recently, I met up with Iris again and she was just about to hand in her two weeks’ notice. Her husband is on her side now and she can leave without this decision affecting their marriage. She will take it slow for a while and work part-time to decompress. She is also working on a line of clothing on the side and hopes to open an online store at some point. That’s really great for Iris. She is very excited to leave a stressful job situation and try to make it on her own. I could tell she was very happy with her decision. I’m also really glad that she was able to persuade her husband to be more supportive.
The natural reaction of anyone who hears that their spouse wants to quit their job is to get on the defensive. The household income would decrease substantially and that usually means cutting back. That’s the most immediate issue, but there are other problems too. What if one person wants to retire early and the other loves their job? It isn’t easy to get on the same page. Let’s go through some scenarios to see what our argument would be.
Shoot for Financial Independence
If your partner is not crazy about early retirement, the best way to get them on board is to aim for financial independence instead. There are a lot of questions about early retirement. What will I do with all my time? Will I be bored? Will I have any social life without my “friends” at work? Can the retirement accounts be able to support 50+ years of retirement? A lot of these questions disappear if you shoot for financial independence. You can tout the benefit of financial independence and put off other early retirement problems until you get there. It usually takes years to achieve financial independence so you will have plenty of time to convince your partner. Here are some benefits of financial independence.
- Financial security – If you ever lose your job, you can take your time to find the perfect job or become an entrepreneur.
- Freedom to work on your own terms – Something funny happens when you achieve financial independence. You become emboldened at work. You can pick and choose your assignments and avoid a lot of the BS. At this point, your employer needs you more than you need them. The power balance has shifted.
- Wealth – You’ll be rich!
- Extra spending money – If your passive income covers your cost of living, then your earned income is gravy. You can use that money anyway you’d like. You can invest, donate, travel more, or help your extended family.
- Employment optional – Financial independence means you can transition to part-time employment, self-employment, or early retirement. You might not want to retire now, but who knows how you’ll feel in 10 years.
I Love My Work
Here is another scenario. One person wants to retire early and the partner loves her job. A lot of people will think it is unfair for one spouse to work. I routinely get this. Some people say I am not retired because Mrs. RB40 still works full-time. I quit my engineering career in 2012, but Mrs. RB40 kept working because she likes her job. That’s great for our family because we could keep investing and our net worth doubled since then. Why should she quit if she likes what she’s doing? Life is better for all of us since I retired. I cook during the weekdays and I can supervise our son while she’s working. The family is functioning much better without my job stress.
It’s fantastic that you love your job, but that should not get in the way of saving and investing. Loving your job doesn’t give you a free pass to spend all your income. Even if you love your job, it doesn’t mean you will love it 10 or 20 years from now. In fact, Mrs. RB40’s employer went through some restructuring recently, and work is not as fun as it once was. I’m trying to convince her to retire early, but she has one more year syndrome. For now, she plans to take a year off in 2022. We’ll travel a bit then she’ll figure out her next step when we get back. Things never stay the same so it’s better to be prepared. Financial independence will open up life’s possibilities.
We won’t be able to spend any money
This is a legitimate concern. Unless you’re already frugal and save 50% or more of your income, you will need to cut back. We lived modestly when I was making a good income so it wasn’t a huge obstacle when our income was reduced to one paycheck. Over the last few years, we shored up our passive income and reduced our expenses further through house hacking. Now, we don’t need Mrs. RB40’s income at all. We can cover all our expenses with our passive income. She can retire this year if she wants to. Working from home has been really nice, though. She loves it and wants to work a bit longer.
For most people, it’ll be a trade-off. Is your work more painful than cutting back on your spending? In my case, our lives improved tremendously after I retired. It was worth it to cut back a bit. We moved into our duplex. One unit is rented out so our housing expense is very affordable, about $1,200/month.
People will think I’m crazy
Your coworkers, friends, and family will think you are crazy. But, that’s because most people save less than 5% of their income and they will never be able to retire early. Once, I told a neighbor that I blog at Retire by 40. Her reaction was – “Right, retire by 40 and back to work at 50!” I laughed it off because I knew most people can’t imagine retiring this early. There are a couple of solutions to this problem.
- Don’t tell anyone you’re trying to retire early. The first rule of FIRE club is: you do not talk about FIRE club! By the way, FIRE is financial independence, retire early.
- If you talk about FIRE, then be prepared to ignore the Joneses.
Yes, early retirement is a little crazy, but there are many great examples of people making it work. Check out my list of early retirement blogs. It is not impossible.
You can’t depend on the stock market
Early retirement usually means investing in the stock market. You can’t just stick your money in a saving account. Inflation will eat you alive. You need to invest it and eventually use the passive income to replace your earned income. However, a lot of people distrust the stock market and they think it is just a form of gambling. Yes, you can invest like you’re gambling, but you can invest more conservatively also. If you consistently invest in solid companies over the long haul, you should do quite well. The simplest way to do this is to invest in low-cost index funds. There will be crashes and short term fluctuations, but those are the best times to buy. If the stock market ever drops to zero, I’m sure we’ll have bigger problems to worry about. Lastly, if you really can’t bring yourself to trust the stock market, consider rental properties. A lot of people retired with rentals. It’s more work, but it’s more tangible than the stock market.
All aboard the Early Retirement Train
So those are just some scenarios that most people will run into when they tell their spouse they want to retire early. The most important thing is to work as a team and try to get your partner on your side. It might take a while, but keep talking to your spouse and emphasize the positives. You can start off with the easy stuff like tracking your cash flow. Once you see where your money goes, you can evaluate your spending more effectively. Keep working on it. Hopefully, your partner will get on board the early retirement train.
Did you have any problems convincing your partner to get on board with early retirement? What are some other scenarios that you could run into?
One way to help convince your partner is to show them the numbers. Here is a great tool for individual investors – the Retirement Planner at Personal Capital. It is the best retirement calculator out there. It’s even flexible enough for early retirement. Sign up with Personal Capital and check it out.
You can read my review of the Retirement Planner here.
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Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.
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Originally posted at https://retireby40.org/getting-spouse-onboard-early-retirement/