Some people spend their entire career dreaming of early retirement, while others don’t dare to. It can be a difficult thing to achieve, but it’s hardly unattainable: With consistent savings and the right investment strategy, you may be able to retire before the typical retirement age, especially if you get started early.
Should you retire early? That’s ultimately a question you’ll have to answer for yourself. The first thing you’ll want to do is see if you can handle it financially. To determine this, we recommend talking it over with your financial planner. If you think you may like to retire early, mention it sooner rather than later, and ask what you need to be doing to make it possible.
In the mean time, consider a few brief reflections on early retirement—some pros, some cons, and some things to just think about.
Reasons to Retire Early
If you believe that you have the financial stability to retire early, you may not need any further reason to do so. The benefits of early retirement are pretty obvious: You’ll have more leisure time, for one, that you can devote to hobbies, travel, family, and more. Plus, leaving the workplace early will cut the amount of professional stress you experience in your life, which could potentially be great for your health!
Early Retirement Complications
With that said, you may also want to consider some potential drawbacks—among them:
Once you leave your job, you probably won’t be able to remain on the employer’s health insurance plan, and may need to search for your own coverage. It’s not necessarily difficult to find a plan, but whether it’s affordable is another question. Certainly, it’s an added cost that can complicate your retirement planning.
Something else to consider is how retirement can cause you to lose your routine, your productivity—your very sense of purpose. Some people love having a lot of free time for leisure and relaxation, but not everyone does, and it’s important to know which camp you fall into.
Depending on what kind of retirement account you have, you may be subject to early withdrawal penalties—meaning it might cost you to withdraw money before you hit the magic age of 59 ½.
Finally, note that retiring early basically means you’re prolonging your retirement—meaning it will cost more. That’s not a bad thing, if you have the finances for it, but again, you’ll want to talk it over with your financial planner.
Early retirement is tantalizing, and may be attainable—but it’s also something to carefully consider from all angles. To speak with a financial planner about early retirement, contact our team today.