Retirement at 40 possible?
Planning to quit early because of health reasons or just to pursue passion? Make sure you have sufficient cover
MUMBAI: Hrithik Roshan’s character in the movie Zindagi Na Milegi Dobara wants to retire at 40. The character, Arjun, a London-based stockbroker, wants to make a lot of money and retire early, so that he can do things he loves such as cooking. Think early retirement is only for those who have high income and high-stress jobs. Not necessarily. There could be multiple reasons for it.
Financial planners say those with high-stress jobs burnout early, forcing them to opt for retirement. Even if they want to work till the age of 60, they opt for low-stress jobs, even if that means low pay. In some cases, experienced professionals are forced to retire early because their skills become expensive and they get replaced by cheap labour with lesser experience. Other factors include workrelated stress, carpal syndrome and urge to start a new project.
Whatever the reason, you don’t want to be caught unawares. If you are getting a sense that you want to or may be forced into early retirement, here is what you need to do:
START PLANNING
Nisreen Mamaji from Moneyworks Financial Planners said an early retirement should be a planned move to pur- sue passion, interest, travel, travel blogging or travel journalism.
“Early retirement is advisable as long as a person is happy and their investment journey continues,” she said.
Setting a timeline for early retirement will help you put things in order. “If you plan to retire at the age of 40 or 45, you need to plan 10 years in advance,” said Abhishek Parekh, founder, White Elephant Financial Planners.
According to Parekh, a majority of those who eye early retirement are from high salary background. “Those with mediocre monthly salary or high rent can’t afford early retirement.”
You need to have enough money to survive the years when you are not working.
To give you a sense, considering that longevity has gone up, you may end up living up to 85 to 90 years. In that case, if you plan to retire by 40 or 45, you still have 45-90 years to live. Wondering how to do it? Start with an insurance cover. You need to have adequate cover so that it comes handy in case of unforeseen circumstances. Next, focus on your investing your savings in a mix of debt and equity based on your risk profile. If you find it difficult to manage on your own, seek help from a financial advisor.
WHAT NEXT
Individuals who retire early take up some other work, say financial planners. Abhishek Parekh, founder, White Elephant Financial Planners, thinks the concept of early retirement is not going to last long.
“At least nine out of 10 early retirees may take up some work in their later lives. And one in nine may wish to go back to what he or she had been doing earlier.” A majority of early retirees either own a business or pursue a hobby after their retirement, he said. But it varies on case-to-case basis.
FINANCIAL PLANNERS SAY THOSE WITH HIGHSTRESS JOBS BURNOUT EARLY, FORCING THEM TO OPT FOR RETIREMENT. EVEN IF THEY WANT TO WORK TILL 60, THEY OPT FOR LOWSTRESS JOBS