Can I Retire Yet? It’s a profound question that many of us struggle with. After saving and planning for years or even decades, there is no easy answer.
Many people stay in jobs and careers they are not passionate about and save more money than necessary, trapped by feelings of safety and security that accompany a regular paycheck.
The ideas of financial independence and early retirement have grown into a “FIRE movement,” buoyed by a decade long bull market in stocks and real estate.
The FIRE movement has created voices encouraging people to take the plunge sooner. In the worst case scenario, you can “just go back to work.”
About two years ago I left my career as a physical therapist. Recently, I’ve been pondering the question: Could I go back to work?
Financially, things could not have gone better for us since I left my job. The combination of my wife’s ongoing part-time income, the small income from my writing, and an ongoing bull market has led to our portfolio growing substantially in the twenty months since I left my job.
Still, the feelings of uncertainty and anxiety that come with early retirement have not gone away.
I’ve been thinking about the factors that could prevent an early retiree from going back to work. The biggest obstacle is one I never considered before leaving my career.
Skills and Knowledge
Skills and knowledge change at varying rates in different professions. As I approach two years since I left my career, I wonder how much longer I could stay out of the workforce and still return to my old career.
Things change slowly for a physical therapist on the clinical side. Human anatomy and physiology are constant.
There are always new advancements in medicine, but research has shown it takes over a decade for the latest medical research to be incorporated into practice!
I read far more now than I did when working full-time, because now I have more time. So my clinical knowledge would likely be at least as current as most full-time practicing therapists.
I would struggle on the administrative side. Insurance regulations are constantly changing and insurance plans are state specific. I have paid zero attention to any of this since I left my career.
I’d need considerable retraining to get back up to speed on current rules and regulations. Failing to do so could result in not being reimbursed or even committing insurance fraud.
The challenge of maintaining skills and knowledge is different for every profession. It is hard to imagine being able to return to work in almost any profession after more than a few years out of the workforce without considerable retraining.
Licenses and Certifications
Some professions require specific licenses and certifications. Returning to work means maintaining them or being able to have them reinstated.
Transitioning out of my career made me realize that credentials are a burden that many professionals accumulate. They cost both time and money to maintain, while often providing little value in return.
I allowed my Orthopedic Certified Specialist (OCS) designation to expire in my last year of practice. I changed the status of my state license and credentials as a certified athletic trainer (ATC) to retired on my last day of work.
I decided to maintain my physical therapy license as “health insurance insurance,” in the event I had to return to work if there was no other affordable way to get medical insurance for our family. The financial cost to maintain my license is minimal, less than $100 for two years.
There is also a time component to maintaining licensure. I have to complete 20 hours of continuing education every two years. The courses cost a couple hundred dollars for online credits and considerably more if I elect to travel to attend live courses or conferences.
I am currently licensed in Pennsylvania through the end of 2020. It would cost $150 to transfer my license to Utah, where I currently live and would most likely work.
It would hardly be worth the time and money to renew the license again or transfer it if I don’t do any physical therapy work by the time my current license expires. Once it expires, it will be considerably more difficult to renew the license and return to my career.
If going back to work is one of your contingency plans, it is worth considering what you will need to do to maintain your credentials.
Studies have shown that 70% of jobs are never advertised and as many as 85% of jobs are filled through networking.
The longer you are out of the workforce, the bigger an issue a lack of professional network can become. A combination of erosion of skills and knowledge (real or perceived) and lack of a professional network could present a substantial challenge to someone needing to return to work.
This problem could be further exacerbated if relocation is part of your early retirement plan, as it was for me.
Since moving across the country, I’ve only met one physical therapist in the past year. Interestingly, she asked if I would be interested in doing home health visits for her company and also offered to introduce me to someone with an outpatient practice who may be looking for part-time help. This reinforces the importance of having professional connections to find a job.
If going back to work is a contingency plan for your early retirement, what will you do to maintain your professional connections after leaving the workforce?
A study of adults age 50 and older shows that about half face age discrimination in the workplace in their lifetime. Some employers offer incentives to older workers to retire earlier in an effort to save costs.
Some older workers are pushed out in less obvious and likely illegal ways. Only about 10% of workers who are forced out of their jobs recover to earn as much or more in future positions.
Age discrimination can be particularly challenging for an older worker looking to re-enter the workforce. Employers take measures to exclude older, generally more expensive, workers by recruiting only at colleges, targeting younger people through social media, or even capping years of experience as a screening criteria.
Even if you have unique skills and experience that could fill a specific need, it may be difficult for an older worker to get through the initial screening process to sell themselves in an interview.
This further reinforces the need to maintain a professional network if returning to work is a contingency to your early retirement plans. And it’s probably wise to assume you won’t find working conditions as favorable as those you left.
Those of us who think about and seriously plan for early retirement are not the norm. A survey of baby boomers by the Employee Benefit Research Institute reported that 79 percent of workers are planning to work beyond traditional retirement age.
Yet, the same study reports that only 29 percent of people surveyed actually are doing that. Why the disconnect?
Over one half of those who retired earlier than expected left their careers because they were no longer able to work due to suffering health issues or having to be a caretaker for a spouse who developed health issues.
Many people I talk to discuss reducing stress, exercising more, and living a generally healthier lifestyle as motivating factors to retiring early. While all are possible, early retirement is not a magic bullet that changes the reality of aging or negates all of the stress we’ve already placed on our bodies.
I chose to pursue FI and then took advantage of the opportunity to retire early while I have my health and can enjoy my life. A primary motivating factor was witnessing several loved ones diagnosed with cancer in their forties.
However, understanding that health is not guaranteed is a double edged sword. If doing some work, or being able to return to work, is part of your retirement plan, realize there is a substantial possibility your health could prevent it.
The Ultimate Lifestyle Inflation
The final challenge to returning to work would be the biggest for me. And I never considered it when I made the decision to leave my career.
I got my first job in the summer after my sophomore year in high school. For the next twenty-five years, I never had more than two consecutive weeks where I didn’t have to be at school, work, or both.
Now that I’ve experienced the freedom with my time that comes with early retirement, it would be incredibly hard to go back to any job that places constraints on my time.
Lifestyle inflation is real. This is a common challenge among people who want to retire early, but have to make major lifestyle changes after buying more house or car than they need, or becoming accustomed to fancy clothes or expensive vacations.
I never felt I sacrificed much while saving towards financial independence and early retirement. But my wife and I saved a high percentage of our incomes from day one of our adult lives and slowly inflated our lifestyles, so we never had to give up anything of value.
Despite the challenges that come with early retirement, I love the freedom and flexibility it allows.
The ability to own your own time is the ultimate lifestyle inflation. If I had to get a job to support my family, I certainly would. But, it would be incredibly difficult to give that freedom up now that I’ve experienced it.
Could You Go Back to Work?
As I step back and analyze the obstacles returning to work involves, the only one that may be totally out of our control and insurmountable is health.
Most early retirees could go back to work. You may not be able to return to your prior career or find work conditions as good as you left. But if you are seriously considering early retirement, you most likely would never have to. A small amount of income can go a long way to relieve stress on a portfolio.
The high savings rate that enables early retirement implies a combination of having a valuable skill set combined with a relatively low cost of living. Returning to your prior career in a part-time capacity or taking on a lower paying job should allow most of us to get by if needed.
Don’t stay trapped in your career in perpetual fear. But be aware that there are potential obstacles to returning to work that should be considered, and plan for them before taking the plunge.
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Addendum: A reader “Peter” sent me this “Pepper. . . And Salt” cartoon that ran in the Wall St. Journal the same day as my post, which he found ironically funny and complimentary to this post. I agree!
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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to email@example.com. Financial planning inquiries can be sent to firstname.lastname@example.org][Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to email@example.com. Financial planning inquiries can be sent to firstname.lastname@example.org]
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