How I knew I was ready to retire at 50

WHEN I announced my early retirement, some people congratulated me for being freed from the rat race. Others described it as an act of “bravery”.

To provide some context, I was a partner with a Big 4 accounting firm before I retired at the age of 50. It was a rewarding career, but also one that came with long hours, constant pressure and a lifestyle that could easily become all-consuming.

In that sense, perhaps it did take some courage to voluntarily unlock myself from the golden handcuffs.

Behind many comments about courage is a very understandable fear – of not having enough money to last until the end of life. “Enough” is, of course, subjective.

On the practical side of adequacy, one must afford daily living expenses, medical bills and family commitments. There is also the emotional side of contentment, or the lack of it.

Some people might never feel they have enough because there is always someone else with a bigger house, a larger investment portfolio or a more luxurious lifestyle. That comparison can quietly create a sense of financial insecurity even when one is objectively comfortable.

To be financially ready for retirement, it takes active steps well before handing in the resignation letter.

Humans need shelter, food, water and healthcare. When the mortgage is fully paid, adequate medical insurance is in place, and funds have been set aside for children’s education or other major obligations, there is generally much less to worry about.

For Singaporeans, their Central Provident Fund accounts, private savings, insurance and investments (including real estate) all form part of the retirement equation. The exact mix will differ from person to person.

Regardless, everyone should do their math, stress-test their assumptions, and avoid building a retirement plan based on envy.

Notes to a younger me

If I could advise my younger self, I would say this: Invest early and consistently, even if the initial amounts are small.

Broad-based US, world and Singapore index exchange-traded funds can be useful building blocks for long-term wealth accumulation. It is not about timing the market perfectly, but about giving compounding enough time to work.

Upon retirement, the focus should shift from pure accumulation to sustainability.

That may mean rebalancing the investment portfolio, keeping sufficient cash for near-term needs and ideally spending distributions or income rather than constantly drawing down the principal.

However, retirement is not only a financial decision.

Before making the move, it is equally important to know what you are retiring to, not merely what you are retiring from.

Work gives us more than income. It gives us structure, identity, social interaction and a sense of usefulness. When that disappears overnight, the loss can be unsettling to some.

The Japanese word ikigai is often translated as a reason for being. Without some purpose in life, one can fade away quickly, even if the bank account looks healthy.

This is why anyone thinking about retirement should ask themselves a few honest questions: What will I do on a typical day? Who will I spend time with? What will give me a sense of achievement when there are no clients to serve, no teams to lead and no deadlines to meet?

Some may find meaning in volunteering, mentoring younger professionals, caring for family members, writing, teaching, travelling or learning new skills. The activity itself matters less than whether it gives shape and meaning to one’s days.

For me, one major reason for stepping away from corporate life was health. I wanted to keep this body in good condition into my older years, rather than allow stress to slowly eat away at it.

Retirement provides an opportunity to rebuild habits that were often sacrificed during busy working years. For example, an hour of exercise is now baked into my daily routine.

It does not have to be expensive. One can use the Healthy 365 app to join challenges or free exercise classes and nutrition workshops.

Brisk walk, swim, cycle, do body-weight exercises or use the neighbourhood fitness corner equipment. If the budget allows, a gym membership is handy, but consistency matters more than sophistication.

Apart from exercising, keep the mind active. Otherwise, time slips away while lying on the couch watching Netflix or scrolling endlessly through reels on the phone. These are harmless in moderation, but dangerous if they become the default afternoon activity.

The mind, like the body, weakens when it is not challenged. Reading, writing, picking up a language, gardening, taking courses, joining interest groups or doing selective consulting work are some possible ways to stay mentally engaged.

Retirement should not be confused with becoming idle. In fact, a good retirement may be one where the calendar is not empty, but intentionally filled with things that matter.

Relationships deserve attention, too. During the working years, many social interactions happen automatically through colleagues, clients and business contacts. After retirement, such activities may shrink unless we make an effort.

It is worth investing time in family, old friends, community and new circles of interest.

A meaningful retirement is rarely lived in isolation. It is enriched by people with whom we can share meals, conversations, laughter, investment tips and memories.

Six steps towards retirement

For readers who are contemplating retirement, I would suggest a simple checklist:

• First, be clear about your monthly expenses and whether your income sources can support them.
• Second, settle major liabilities such as housing loans.
• Third, ensure healthcare protection is adequate.
• Fourth, build buffers for inflation, market downturns and unexpected family needs.
• Fifth, design a weekly routine before you leave full-time work.
• Finally, identify what gives you purpose beyond your job title.

Money matters, but so do health, purpose, relationships and daily routine. Retirement is a transition into a new phase of life that must be planned for.

The writer, a retired EY partner, is now a freelance tax adviser

Switching Lanes is a column exploring the diverse realities of life after a full-time career. From money strategies to finding fresh purpose, we are redefining retirement.

Have a perspective to share? Write to btletter@sph.com.sg with the subject, Switching Lanes.