ASK THE MONEY LADY: Considering early retirement? Start looking for a passive income stream – SaltWire Network
Dear Money Lady, I will turn 59 in 2022, and I sometimes think I am ready to retire. One day, I want to quit, and the next I plan to keep working to 65. Any ideas?
– Paul
You are not alone Paul – Many Canadians are wanting to make changes in 2022 as we ease our way out of COVID. We have had a cultural awakening towards our own mortality and many people in their late fifties have decided they would like to retire earlier with the thought of working to 65 now being a real issue.
But being frugal and living a minimalistic lifestyle today is just not enough. And, short of knowing when you will die, which has always been the magic question, the risk of running out of money in retirement is a sobering reality.
Retiring early (under 65) is a wonderful thought in theory; however, you absolutely cannot drain your savings just because you want to retire sooner.
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So, what other options are there?
Whether you choose to work an abbreviated work schedule with your current employer or decide to start something new, most pre-retirees often have a part-time job or side-hustle to provide the much-needed income to maintain their lifestyle or continue to pay down debt. This will allow you to get accustomed to living on less and it can also ensure that all your debts are indeed paid in full by the time you make your hard-stop to working.
So how do you create a passive income to either transition to semi-retirement or provide additional income to get you there faster?
Networking has always been the best way to move from one career to another, but this is definitely a contact strategy, one that has been difficult during a lockdown. So, instead, ask yourself why do you want to retire now? If you could change careers, what would this be? What would make you really happy? What do you want to do with the rest of your life?
Paul, when you started working in your career, you most likely always had to focus on what you naturally didn’t do well, ignoring all the things that you probably loved to do and were exceptional at. So, now that you are older, I want you to focus on all the things that you are really good at. I know you’re good at something; in fact, I bet you are good, if not great, at a lot of things.
Take a moment right now and write down a list of what you do well. Are you good at …….