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There Are Reasons (Good and Not-So-Good) to Retire Early

This year has forced many to think about retiring early. Perhaps the thought has crossed your mind?

When it comes to retiring early, some of the benefits are obvious! You get to live your life without the constraints of work, and you are able to pursue your own interests. There are good reasons for retiring early, and there are some reasons retiring early may not be the greatest idea.

Maybe Your Dedication is Gone

One of the good reasons to retire early is that you are simply not as dedicated to working anymore. Your heart is just not in it. When you are no longer emotionally interested in working, your performance deteriorates, your company suffers, and you actually suffer as well.

Maybe Working Has Taken its Toll

In some professions, such as construction or law enforcement, the physical and emotional demands of the job can become too much over the course of time. One of my all-time favorite people retired early from construction so he could start a raspberry business. He grew and sold raspberries, raspberry pies, and even raspberry ice cream. Now… that’s a retirement.

After a few years in a high-risk, high-impact profession, perhaps your body and mind have simply had enough, and it is time to go home and rest – or at the very least, shift gears.

Your Finances May Become More Flexible

Most people do not realize how expensive it is to work, until they are no longer working. When you work any job you incur expenses, such as wear and tear on your car, transportation costs (gas, parking or transit passes), cost of professional attire, childcare, and miscellaneous medical bills (i.e. for work-related injuries).

If you have planned your finances to allow yourself to retire early, then you will find that your money goes much further when you are not working.

Of course, you’ll need to find something else to do to fill those hours. Library cards are free, but travel can be very expensive.

Your Physical and Emotional Health Could Suffer

For some people, retiring early means abandoning the daily physical activity that working required, and giving up a big piece of their identity. Retiring early can cause physical and mental problems that could become very serious over time.

My father “retired” 3 times. He’s just not good at retirement. He is almost 80 and he is still hands-on with his apartments almost every single day – fixing this, installing that, sheet-rocking, flooring, doing electrical work. Some people just don’t retire well.

When I think about my own retirement, many years hence… I think this will be the most difficult thing about it, for me. I love what I do, and I spend a LOT of time doing it. While I know I am more than my work, I still very much identify with my work.

You Lose Your Social Circle

After so many years of working, you may take for granted the notion that you get to see most of your friends at work five days a week. Even those who believe the people they work with are “only acquaintances” suddenly find the loss of the social circle they developed at work to be devastating.

In my 25-year career in financial services, I’ve learned this is the thing that catches most people by surprise. We don’t think we are that close to the people we work with, but when we don’t see them anymore, it leaves a big hole. It’s a really good idea to maintain some of those closer connections from work after you retire.

You Didn’t Plan Well

When you retire before the age of 65, you run the risk of losing out on health insurance. Medicare automatically kicks in for every American when they turn 65, but what would you do until that age? Did you plan your retirement finances right – can you cover that gap, or will you run out of money later? Many people forget to take inflation into account when they plan their retirement income, and that makes retiring early financially dangerous.

There are two sides to every story, and that includes the story that goes with retiring early. The idea of walking away from your job before the age of 65 can sound appealing, and there are plenty of people who do it. But there are many variables to consider before you make that decision. If you do want to retire early, then talk about it with your family – and ask your financial adviser if you have structured your savings properly to be able to live without a paycheck for the rest of your life.


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