Life after work

Retirement by design: a guide to early and alternative retirements

You don’t need to postpone the adventures you want to embark on until you’re 60.

What images float across your mind when you think of retirement? Maybe it’s of days with no fixed schedules, free for you to fill with activities that bring you joy. Perhaps you visualize all the places you’ll visit when you finally have the time. What if there was an opportunity to tick off some of your post-retirement life goals now?

Shifting your perspective on retirement might help you realize your dreams sooner. Instead of approaching retirement as a permanent state, what if you could taste the freedom of retirement while you’re still working? Or better still, what if you could retire earlier in a way that’s fulfilling and financially viable?

The alternative retirement landscape

If you’re tired of being tied to a 9-5 job, there are several options that offer the flexibility of retirement without draining your finances.

An early and alternative retirement is more about a mindset shift than a compromise.

  • Seasonal work: Instead of working all-year round, consider jobs that are season specific. Think of working at a golf course during the summer and fall, at a ski resort in the winter, or coaching a sports team for a few months per year. Doing so will free up part of the year for you to pursue other interests. And if the seasonal work itself is an area of interest for you, even better!
  • Part-time work: If you’re looking to slow down and want more room in your day or week, consider part-time work. You could impart your knowledge by taking up the job of a private tutor, help people prepare their taxes, work in your favorite retail centres, or even use your wealth of experience as a participant in various events (weddings, birthday parties, anniversaries, etc.) and work as an event planner.
  • Self employment: Starting a business allows you to not only be your own boss but could also help you provide employment to others. The possibilities are limitless. Not all businesses require hefty capital to set up. An entrepreneurial spirit and a touch of ingenuity are sometimes more than enough. You could open your own Etsy craft store, provide landscaping or dog-walking services to neighbours, help people move or take care of their house when they go on a holiday. It could be your chance to turn a passion project into profits.
  • Back to school: Is there a subject you always wanted to learn more about but didn’t have time for when you got into the grind of working life? Why not do it now? It could be an area that’s held your interest for a long time or a professional development course that will take you ahead in your career.
  • Mini retirement: Finally, if you want the flavour of retirement itself, you can opt for a mini retirement. The idea here is to take chunks of time from your working years and indulge in non-work passions. If there are adventures you want to go on, you don’t need to postpone them until you’re over 60. Take a month or two off to explore the world, go on volunteering missions, learn on location by immersing yourself in the language, culture, and art of a place; use your skills to earn money during your time off. This idea needs some planning, though. Save for a mini retirement like you would for a car. Don’t dip into your retirement savings to do this. Rent houses to stay in as opposed to hotels or swap houses with other vacationers.

Roadmap for early retirement

If you’re serious about saying goodbye to a regular working life sooner, you need a clear roadmap. Here are a few tips to help you get started on that path:

  • Supplement retirement income – have alternative income streams while you’re working. It could be a second job or a side hustle or even rental income.
  • Build skills over and above what your job requires – make use of any career development options provided by your current employer. This can come in handy if you take up the role of consultant when you step out of the 9-5 grind.
  • Reduce your expenses by eliminating unnecessary dependencies like caffeine, nicotine or a high-maintenance vehicle.
  • Early retirement is often associated with frugality. While you may need to scale down your expenses to fit your new life, it need not be boring. Develop and indulge in low-cost hobbies and passions. Focus on experiences, not stuff.

An early and alternative retirement is more about a mindset shift than anything else. Don’t compromise by downsizing. Instead, think of leading a different kind of lifestyle altogether.

Talking to a financial security advisor can help you create a sound financial security plan before your embark on your early or alternative retirement journey.

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The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.