By Ben Peters, CFP®, J.D.
When I was in my first year of law school, a classmate quit seemingly out of nowhere. She wasn’t a likely candidate – she was highly engaged in class, socially active, and studied hard.
Weeks after she left, I asked her what happened. She recounted a night studying late when the thought creeped into her mind—should I be doing this? Once that idea sprouted, it was a slippery slope and was all she could think about. Eventually, her conviction reached a tipping point. She pulled the plug on becoming a lawyer despite tens of thousands in tuition, a highly compensated future career, and no idea what was next.
Combating Fears of Quitting with Knowledge
For every person who leaves law school early, there are many who contemplate but do not pull the trigger. And many veteran lawyers (including me!) wish they could go into a time machine and do what my classmate did. It takes a lot of conviction to overcome fears about opportunity cost, an uncertain future, and peer pressure.
And yes, making dramatic changes in your twenties is much less complicated than in your forties or fifties. You may be thinking – this is nice and idealistic, but what about my kids’ college, mortgage, car payments, inflation, crazy stock markets, etc?
Even accounting for these practical concerns, most do not understand what retirement lifestyle their resources afford them … right now. Sadly, many toil for years in careers they dislike, oblivious that they have hit their retirement goal or can do so with a few adjustments. Perhaps this strikes a chord with you or someone you know?
As a financial advisor, I find that my most fulfilling conversations are when I can help build a client’s conviction to quit when the data, probabilities, and scenarios heavily suggest that the time can be now.
Lack of Perspective Likely Prevents You from Reaching the Quitting Tipping Point
I have spoken to many lawyers and other professionals who share these feelings. Yet, their base expectation is to continue working for the near future. Why?
They lack perspective on what continuing to work accomplishes. The alternative to working is just theoretical. It’s also antithetical to expectations – all their colleagues are plugging away, their vision of retirement is gray hair and grandkids, and they don’t even like golf.
In other words, they haven’t engaged with the idea of quitting on a practical level. Perhaps this is something you’re struggling with as well. You may have thoughts like:
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I’ll hold on for a few more years because … well, the money is good and I’ve tolerated it for this long, so what’s a few more years?
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If I can just make it until 62, then I’ll stop then and start collecting Social Security.
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What else am I going to do—work at Starbucks?
Your conviction hasn’t yet reached the tipping point.
How I Help Clients Retire
My role is to help my clients engage with the financial implications of quitting and coming to terms with more uncertainty. If I were working with you, we would start to understand what’s possible by asking questions such as:
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What retirement do you want?
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What type of retirement spending can you expect if you retire today? Retire in 3 years?
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What does working more accomplish? Does the improvement in projected retirement lifestyle merit waiting?
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How flexible are your resources and spending in retirement?
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Is it possible to move to a consulting role? Are there others whom you can use as a template?
On one level, the conversation is about whether you have enough money to quit. On another level, the conversation is about how not working would operate –
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We would start you at $X thousands of dollars in monthly distributions.
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How flexible will your lifestyle be? If the markets or your life delivers us an unexpectedly bad hand, can you reduce withdrawals or go back to work?
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What’s the best way to organize your resources for a world of taking from a nest egg versus adding to it?
Often, once we have reviewed what the financial conditions in retirement are likely to be, clients recognize that retirement is much more practical than they imagined. It is not an exercise in attempting to nail what the future holds. Rather, it’s understanding what the probabilities suggest is reasonable and how much uncertainty is wise to accept.
Let’s Talk About What Retirement Is Possible For You
I do not know what happened to my law school friend who quit early. I fully expect that her decision worked out well. She made the mature decision that the opportunity cost of a legal career was worth sacrificing for a more uncertain, potentially less remunerative future. It was an inspired and practical decision, despite how impractical it seemed at the time.
Perhaps you have built up a nest egg through a couple decades of making good money, dedicated saving, and not having as much time as you wanted to spend it. Rather than counting down the years until 65, you can evaluate your options right now. If you want to learn what options are possible for you, let’s talk.
