Q&A: My Company is Encouraging Me to Retire Early. Should I?

By: Alythea Ho

Question: I've been offered the chance to retire early by my company. And I'm not the only one. I'm not upset at all, but I'd like to know if it's a good idea to accept the offer? Thanks.

Answer: Good question. The main thing to consider is whether you can afford to retire early. A recent JobsCentral poll shows that the majority of our respondents (37%) would accept an early retirement offer if the retirement package is attractive enough.

As you mull over the decision, ask yourself the following:

Have I…

1) Come up with a retirement income plan / timeline for my expenses?

If you haven’t done this, please do so now. When you retire, you need to know how you’re going to cover your expenses for at least 30 years or more – not forgetting taxes and inflation as well.

In short, you need a plan.

One way to go about this is to create a retirement timeline to estimate future income sources and expenses, year on year. Things to look at include fixed sources of income (e.g. CPF, dividends etc.), expenses, and calculating your delta – or the difference, between the two. The difference will be the amount you need to dip into your savings.

A good early retirement offer needs to cover as much of your upcoming expenses as possible. Should you choose to accept the offer, it’s usually acceptable to negotiate for better terms if the package is not attractive.

2) Ensured I’m adequately covered with health plans?

Does the early retirement offer include medical and health coverage for you and your family? If it doesn’t, it’s time to ensure that you have sufficient medical coverage on your own. As health care coverage costs tends to increase as you age, you’d want to factor in these additional insurance costs into your retirement income plan and timeline.

3) Evaluated other job opportunities out there?

So you’ve done your planning and find that income’s short. Depending on your current (and projected) expenses, you may need another job with similar pay and bonuses. Indeed, 26% of our respondents say they would reject an early retirement offer, citing a preference for steady income flow.

If you think you’ll have difficulty finding another job with similar remuneration, it might be better to give a pass on this one. However, should income not be an issue, you could still evaluate other opportunities out there.

Which leads us to the final point…

4) Figured out what I want to do upon retirement?

In our poll, 63% of respondents cited money as their main reason for accepting or rejecting an early retirement offer. Just 11 per cent of respondents say they would take an early retirement to spend time with loved ones, while 9 per cent say they would reject an early retirement because they would be bored.

For most people, this begs the question: If money is such a big motivator for work, once you’re financially secure and retire from work, then what?

Can boredom kill? Quite possibly so. Most people look forward to retirement, a time where they can rest easy and enjoy life. However, studies have shown that people who retire early are more likely to experience depression and a decline in physical and mental health. Why not try a part-time job or explore a new field of work that may offer lower compensation but greater satisfaction instead?

Once you have a clearer picture of what you're going to do post-retirement, it will help in the 'softer' aspects in evaluating the pros and cons of early retirement.


Would you accept an early retirement offer? Share with us in the comment box below!

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