Dense routine makes some people want to immediately finish their work and retire early. In some countries, the minimum retirement age for civil servants is 58 years depending on the position held. While for private employees, the maximum age for retirement is 57 years. However, many also decide to retire under this age. Some even apply for early retirement at the age of 40 years.
The decision to make an early retirement is returned to individual consideration. However, early retirement must not be done rashly. Employees must know how much severance and pension funds they will receive. For civil servants, pensions are received monthly in accordance with applicable regulations. What about private employees?
Pros and Cons of Early Retirement
At a glance early retirement is quite tempting, especially for employees who are easily bored. However, there are several advantages and disadvantages if you retire early. What are the advantages and disadvantages in deciding early retirement?
Pros of Early Retirement
Many employees apply for early retirement because they think that early retirement has an advantage over retirement according to the applicable age. The following benefits you will get if you decide to retire early, are:
Spend more time with family
Family is the most important compared to other factors. With flexible time and not tied to working hours, you can spend your retirement surrounded by family without the need to tie working hours from the company.
As a New Beginning to Develop Yourself
Retirement is not always synonymous with ending. Retirement can also be the first step to starting new things and developing themselves. There are some well-known businesses that start when the owner’s retirement period has arrived. For example Colonel Sanders, founder of the worldwide famous fried chicken franchise, Kentucky Fried Chicken. He started his business at the age of 65 when other people at that time decided to have a total rest. So, retirement is not a reason to stop developing yourself.
Rest Towards Old Age More Comfortable
Who doesn’t want to rest comfortably when they are old? With early retirement, you will focus on yourself and loved ones. Mind burden is not too much because you do not need to think about office project deadlines, traffic jams to the office, and the complexity of a multitude of jobs. Looking forward to old age is even more comfortable.
Cons of Early Retirement
Not always good and guaranteed, early retirement also has some shortcomings and risks that can lurk. What are the disadvantages of early retirement?
Income Threatened to Reduce Much
The monthly pension fund certainly isn’t as big as the salary you received while you were still actively working. While the cost of your life remains the same, or at least you only need to finance yourself and your spouse because the children are independent. Therefore, in deciding to retire early, planning is needed in many ways.
You will lose your routine of getting up early, going to work, and leaving work. Maybe at first everything will be fun. However, the free time you have opens the gap for boredom and results in feelings of loneliness even though you are surrounded by loved ones. Therefore, fill your retirement with useful and productive things.
Vulnerable to Having Financial Problems If Unplanned
Due to reduced income, financial problems began to lurk. Ranging from medical costs to unexpected costs that could have arisen. Managing money and assets at a young age while still active is the main key so as not to be haunted by financial problems when undergoing early retirement.
Tips for Applying for Early Retirement
There are so many things that employees face when deciding to retire early. Starting from the limited source of funds, reduced productivity, to be attacked by boredom. When all of these things attack, over time will affect the level of quality of life in old age. All of these things can be overcome if an employee does some anticipation before applying for early retirement.
Setting a Target for Early Retirement Age
Life expectancy in some countries averaged 71 years. Such as you are currently 27 years old and plan to retire early at the age of 45 years. You have 18 years left to reach the early retirement that you apply. Make the most of the remaining time as possible. In the remaining 18 years, collect assets and develop strategies that will be used when retiring later. Careful early retirement planning makes you more calm when the expected early retirement has arrived.
Try to pay off debts
When relaxing from the routine when retiring early, you certainly do not want to be disturbed by a series of installment fees and debt that you must pay off. Therefore, calculate how much your current installment and forest. Then try to calculate how much should be paid. While still productive and in the working period, try to pay off all existing installments and debts. Thus you are not too burdened in terms of costs to still repay debt when retirement.
Calculating Current Assets
How many total assets do you currently have? And what about managing assets for retirement? All of these questions you must answer with careful planning. Good asset management will support a more prosperous retirement life.
Calculate Living Costs
The most basic cost of living is the cost of food, clothing, children’s education, mortgage and vehicle payments that you have to pay each month. More or less the cost of your life now is a projection of how you will pay for retirement life.
Manage severance pay well
When applying for a pension, the company will generally pay a number of severance pay when it has contributed to the company within a certain period of time. Don’t waste your severance pay! It would be better if you saved severance pay. You can allocate severance pay to things that are more useful such as investment, capital to build a small business and so on.
Learning New Skills
You will be hit by boredom when you are no longer actively working. Boredom should not be underestimated, you know! The combination of boredom and low levels of productivity will trigger Alzheimer’s. Alzheimer’s is a disease of memory loss, ability to think and talk, as well as gradual changes in behavior that often attacks the elderly aged 60 years.
New skills that you can learn for capital in retirement can be cooking, cultivating, knitting and weaving, and so on. Learning new skills will keep you productive and stimulate your brain to be active so that you avoid Alzheimer’s.
Try a Small Business
When you retire, you only receive a pension whose funds are limited each month. If you want extra money every month when you retire, small businesses are worth a try. Small business that you can do when you retire is to sell groceries, snacks, to rent out a simple boarding house. Besides not requiring large capital and the risks tend to be small, small-scale business is an alternative activity to fill the vacancy when retiring.
Imagine what will happen if you make an early retirement? Retirement is a time for you to rest and spend the rest of your time with loved ones. Therefore, whether you decide to retire early or retire according to the applicable age, you must prepare it while you are young and have a lot of energy to work harder.
Experienced Recruiter with a demonstrated history of working in the media production industry. Strong human resources professional with a Bachelor’s degree focused in Psychology from Universitas Kristen Satya Wacana.