If you have been saving and investing for years, you may now be in a position where you feel confident in taking the next big step in life. You may be thinking that the time has finally arrived for you to quit your job and retire before the age of 37. If you are like others who have walked in your shoes, you may be wondering how to quit your job in the least stressful way possible. Quitting your job can cause both financial and emotional stress, and you need to know how to quit your job strategically so that you can minimize these stress factors and enjoy comfortable and happy retired years.
How to Financially Prepare to Quit Your Job
When you start looking at how to quit your job, you should first analyze your finances. This is a major component of the anxiety you may be feeling relates to financial stress. You may wonder if you truly have enough money to retire. Understandably, you need to have a stable income stream in place to supplement your income in the years to come. You may want this income stream to come from passive income sources. That is rather than eating into your lump sum of invested capital. This way, your nest egg will not diminish over time. However, you may wonder how life will actually be when you no longer have the financial security of your regular paycheck to rely on. By following a few tips, you can better prepare to quit your job financially.
Tips to Financially Prepare to Quit Your Job
If you want to know how to quit your job, it is important to follow a few helpful tips to ensure that your finances are in order before you make any major decisions.
- Think about your medical insurance and other benefits you currently receive from your employer. Have you set up replacement coverage and benefits? You need to supplement these benefits that will disappear when you quit
- Consider pouring your paycheck into a separate account for a few months and only living off of your passive income stream. Can you live comfortably off of this stream alone?
- Review your portfolio, and consider diversifying into safer investments. When you retire, you do not want to risk losing money on unsafe investments.
- Have you thought about inflation? The best passive income stream is one that is inflation-proof, such as real estate income or dividends.
- Think about your lifestyle when you retire. Some people want to travel, play golf regularly and more. How will your budget change when you retire?
- Have you paid all your outstanding debts? Many people will even pay off their mortgage before retiring. They want to keep expenses as low as possible.
- Have you scaled back your expenses as much as possible? Think about shopping for more affordable insurance, switching to Internet-based TV and more. Save money on regular expenses.
- Have you planned for repairs and replacements? For example, you will need to replace your car over the years. Your house may require significant repair or replacement work as well.
- Think about major life events that are in front of you, such as paying for the kids’ college education or paying for their weddings. Have you financially planned for these future expenses?
How to Psychologically Prepare to Quit Your Job
Learning how to quit your job from a financial perspective is critical to your comfort level and security in the years to come. However, leaving your day job can also be a major psychological change for you to deal with. In many ways, it may be beneficial for you to quit your job. For example, you may not have to deal with the stress of a daily commute, managerial headaches and other stressors in your current life. On the other hand, your personal sense of identity and many of your goals may be linked to your career. They keep you grounded and motivated.
Many people who retire early feel lost and ungrounded. They lose a sense of purpose in their lives, and they feel as though they should be doing something constructive or beneficial. This can lead to a different type of stress and even unhappiness and depression. Learn how to quit your job from a psychological perspective. In this way, you can more easily navigate through the emotions associated with not having a career.
Bonus read – 5 Tips to Live Below Your Means
Tips to Psychologically Prepare to Quit Your Job
If you want to know how to quit your job, you must take into consideration the psychological impact of this process. These tips can help you prepare emotionally and psychologically for this major change in your life.
- Think about how you will spend your days in retirement. Many people feel lost when they do not have a job to go to anymore. They have a seemingly endless number of hours to fill their day. Also, they can easily become bored and unhappy. Think about traveling, hobbies and more that you want to pursue in your free time.
- Envision yourself walking away from your career. Some people are actually more emotionally in connection to their career than they initially think. They have career goals that they still want to achieve even though they are financially able to quit their job.
- When you retire, you and your spouse or kids will likely have much more together-time. While this can seem like a good thing, many people find that there is such as a thing as too much together-time. Talk to your family about how you will each take steps to live independent lives. Also, enjoy the positive aspect of being around your loved ones more than you were previously able to.
- You may also think about taking on a major project that you have always want to do. For example, some people will take up gardening, and others will write a book, or restore an old car. These are goal-oriented projects. They can give you a sense of purpose. Also, they can fill your time in constructive ways. Some hobbies and projects are more expensive than others. Therefore, make sure that you have financially budgeted for them.
- Volunteering is another excellent way to fill your free time. This is a constructive way to be a productive member of society. Explore different causes that you feel passionate. Determine how your skills and time can best be put to use.
As you can see, there are many important factors to review before you take the next big step and quit your job. The decision to quit your job can impact your finances as well as your emotional or psychological state. Both of these factors must be carefully considered, and you can make plans now to pave the way for a smoother transition into retirement. Spend ample time exploring each of these points to learn how to quit your job with minimal stress. While some people may choose to delay retirement for a few more months or years after reviewing these factors, others may decide that now truly is the right time to retire early.