Will Retiring Early Make You Happier? It’s Complicated

A middle-aged man smiles while sitting on the deck of a sailboat.

(Image credit: Getty Images)

published 15 June 2024

Editor’s note: "Will Retiring Early Make You Happier" is part five of an ongoing series focused on how to retire early and the FIRE ("Financial Independence, Retire Early") movement. The introduction to the series is How to Retire Early in Six Steps. To see all early retirement articles, jump to the end.

Research shows that anxiety and stress peak on Mondays, but it all starts to kick in the night before. There’s even a name for it: the “Sunday scaries.”

Meanwhile, in the greener pastures of retirement, people report higher levels of happiness. So, it seems logical: the earlier you retire, the happier you’ll be, right?

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That's what Dr. Jordan Grumet believed when he discovered the financial independence, retire early (FIRE) movement. Burned out by the relentless demands of running his own medical practice, he dedicated himself to saving aggressively and achieved financial independence at 45. Goodbye, sleepless nights and Sunday evening dread.

But the reality was different. “Instead of feeling joy and excitement, I fell into a pit of anxiety and depression,” he recalls.

The FIRE movement advocates that you can achieve financial independence and retire early by saving 25 times your annual living expenses. That savings rate far surpasses what most Americans have stashed in their 401(k). Still, the promise is alluring: do whatever you want with your time without worrying about making money.

Sleeping in. Hitting the gym when it’s empty. Traveling without the crowds. It sounds perfect, doesn't it?

So, does retiring early actually make you happier?

Yes, no, maybe.

The stories of Dr. Grumet and other FIRE achievers show that the relationship between financial independence, early retirement, and happiness is complex. Here's why.

The joys of retiring early

Freedom, enjoyment, stress-free.

These are the three positive words most commonly associated with retirement, according to a Transamerica Center for Retirement Studies report.

Jonathan Geserick, who achieved FIRE with his wife in 2023 at ages 46 and 45, echoes these sentiments. He says he feels happier these days, exclaiming, “The freedom to do something different rather than work at a job you hate is an awesome feeling.”

Like nearly 70% of U.S. workers who dislike their jobs, Geserick felt burned out working at a Fortune 500 company. Research has found burnout associated with a variety of physical and mental health issues. It’s no wonder many turn to the FIRE movement to escape their 9-5 grind.

A study in the Journal of Consumer Marketing identified “escapism & freedom from the current workplace” and “concern for physical & mental well-being” as primary motivators for adopting FIRE.

Furthermore, financial independence frees one of the stresses of money and job insecurity. With this freedom comes a greater sense of agency, which research suggests contributes to happiness.

Geserick has used his newfound flexibility to focus on his health, consistently going to the gym and losing significant weight, another cornerstone of happiness. Consider the 2024 MassMutual Retirement Happiness Study shows that retirees who prepare financially and focus on their health before retirement report higher happiness levels.

Geserick believes FIRE offers a unique advantage: “I have an extra 20 years in my prime to enjoy life rather than being tied to a desk.”

Dr. Grumet shares a similar sentiment on the joys of freedom: “I haven't had Sunday evening anxiety since I worked full-time,” he says.

However, with this newfound freedom came the struggle with some of the realities of early retirement.

The realities of early retirement

If you dislike your job or simply feel dissatisfied with life, it’s easy to think that financial independence will bring lasting happiness. But when you do make it, you may feel a temporary blip of euphoria that then fades, a psychological phenomenon called the “arrival fallacy.”

Ruminating about his own transition out of full-time work, Dr. Grumet says, “Finding out I was financially independent was a relief, but then I was left contemplating who I was and what was important to me.”

Studies suggest that those with a strong professional identity often struggle in retirement. This is a common experience among early retirees.

Researchers at the business school INSEAD found that while entrepreneurs who achieve FIRE report joy and freedom, they also face feelings of emptiness and anxiety due to limitless possibilities. They often grapple with the question, “What do I do now?” and search for new identities and purposes.

To put it in stark perspective: retiring at 40 and living to 80 means having around 350,400 hours to fill.

“Walking away from medicine was one of the hardest things I ever did. I spent the first four decades of my life, as well as countless hours in pursuit of this one thing. This one thing that became my whole sense of purpose and identity,” Dr. Grumet says.

Identity isn’t the only thing that may need to be replaced. The famous Harvard Study of Adult Development found that strong relationships are the most important contributor to happiness. Early retirees may struggle with loneliness if their peers are still working, and retired spouses can also face difficulties if their partners continue to work.

Ultimately, if your personal life isn’t fulfilling before retirement, it likely won't improve afterward. People who define themselves by their careers may face an identity crisis in retirement, potentially leading them back to work or into personal turmoil.

Conversely, if work or money concerns are the primary obstacles in an otherwise happy life, removing those stressors through FIRE can lead to greater happiness.

The key ingredients of happiness

The question of whether FIRE leads to happiness is complex because happiness itself is always a work in progress.

Arthur Brooks, a social scientist and Harvard professor, has studied happiness for decades. In his book Build the Life You Want, co-authored with Oprah Winfrey, he defines happiness not as a destination but as a direction, something that you should aim to increase without an end goal in mind.

Brooks identifies three key “macronutrients” for long-term happiness. First is enjoyment, which involves engaging in memorable activities that bring joy, especially with people you love.

The second is satisfaction, best described as the sense of accomplishment after achieving a goal, such as reaching financial independence. But it can include hobbies or other active pursuits that provide opportunities for growth.

Third and perhaps most important is purpose, or that which gives your life meaning.

Interestingly, many people who achieve FIRE spend their time on activities resembling work, such as blogging, podcasting, consulting and launching businesses. They find fulfillment not in the money but in the purpose these activities provide.

Dr. Grumet, for example, works 10 hours a week in hospice care because it “feels purposeful.” He also engages in podcasting, writing and public speaking, which bring him joy and meaning. “I don't consider anything I do work; I mostly consider it fun,” he says.

Geserick never intended to fully retire after achieving FIRE. He now spends 25-30 hours a week running an online estate attorney business. “My hobby is starting new businesses. Some fail, some succeed, but I enjoy the process,” he explains.

Just like maintaining a balanced diet, these happiness “macronutrients” must be continuously incorporated into your life.

Dr. Grumet elegantly put it this way: “When we reach financial independence is not as important as building a life of purpose, identity and connections, and then using a financial framework to spend your time engaging in these things.”

So, FIRE may not be the secret to happiness. But if happiness is truly a journey, then for those of us who hate Mondays, FIRE can help give us a head start.