Why Retiring Early Isn’t Actually as Great as It Seems

The idea of retiring early often seems like an ideal goal – especially for people that don’t particularly like their jobs.

After all, retirement means that you have much less to stress about and you don’t have to work hard anymore. At least, that’s what it means in theory.

Because of these ideals, many people end up taking their retirement as early as they possibly can. Yet, this approach is much riskier than it first appears and people often overlook the dangers of retiring early. In fact, unless you are physically unable to work anymore, retiring early is often the worst decision that you can make.

Financial Implications

The most obvious implication of retiring early is financial. An early retirement means that you have a longer amount of time to survive without a career. This ends up being more expensive than most people account for.

For one thing, retiring early means that you are missing out on income that you would get otherwise. For example, if you retired at 56 instead of 66, that’s a full ten years of income. It’s easy to see how much of a difference this could make.

At the same time, retiring early means that you may use benefits from your job, such as some medical benefits, any perks and your company’s contribution to your 401(k).

You also sacrifice some Social Security benefits if you retire early. Essentially, you end up receiving less on a monthly basis because you need to stretch out your Social Security money for a longer period of time.

This difference can be a major issue because it limits the money you have available for your wants and your needs. Realistically, the last thing you want is to have to spend your retirement constantly worried about money and what you can do.

The financial implications of retiring early suggest that, if possible, it’s best to avoid retiring for as long as possible. Doing so can mean that you have more money and more options when it does come time to retire. In turn, this can mean a better lifestyle and considerably less stress.

Ideally, if you are going to retire early, you need to be saving more to account for this. Additionally, you will also want to cut down your costs as much as possible both before and during your retirement. Doing this can be challenging but it is important for making sure that you are able to meet all of your needs.

Health Implications

Another key example of the dangers of retiring early is in terms of your health.

One reason for this is that you often end up with lower quality health coverage, which can make it harder to stay healthy.

At the same time, when you are retired, you often find that you are less active physically and mentally. That’s especially true if you don’t have a lot of money, as a lack of money can further limit what you are able to do.

For example, most jobs involve interacting with people on a regular basis and they also tend to involve physical and mental stimulation to some degree. When you retire, you lose a lot of that, along with much of the regular routine of the day.

Many people find that they get stuck in the habit of doing little and spending a lot more time at home. Some research suggests that retiring too early may even shorten your life, especially if you retired from a job that was not physically exerting.

For example, retiring from a job with heavy manual labor may help to improve your health and help you live longer, because the job creates a large amount of physical and mental strain on you.

However, retiring from a managerial role or another non-manual role may have the opposite effect, because the job helps people to stay alert mentally and be more active.

As such, the impacts of your job are something to seriously consider when looking at whether or not you should retire. In many cases, your job may well be offering you benefits that you don’t think about at the time.

The Dangers of Retiring Early

There are a lot of different factors to consider when it comes to retirement and it’s critical that you don’t rush into this decision.

Perhaps the biggest challenge of retirement is simply that it is something that people often get highly emotional about. As such, it’s easy to make a decision without fully thinking through the implications and consequences – especially when some of these are not obvious.

In most cases, waiting to retire can be a major advantage, helping to promote better health and a better financial situation. In turn, this can make retirement itself an enjoyable time rather than a very stressful part of your life.