Am I Too Young to Retire?

Risks & Benefits of Seniors Retiring Early

Tired of burning the midnight oil, waking up at the crack of dawn, commuting to work in bad weather, and answering to a boss each day? If so, early retirement is probably becoming an increasingly tempting idea for seniors.

From waking up when you want and wearing your PJs until noon to pursuing your passions and playing golf every other afternoon, there are many benefits of early retirement. However, there are plenty of risks as well. Are you ready for this monumental lifestyle change?

Benefits of Seniors Retiring Early

• Lancaster Active Aging and Improved Health
  If you’re able to stop working early, you can save yourself from years of stress and other job-related ailments associated with lack of sleep, sitting at a desk all day, and a poor lunchtime diet. Not sure if retiring early will really boost your health? Here’s what the Financial Samurai had to say on the matter:
  “By the sixth month after leaving my job, EVERY PAIN went away. Why? Less job-related stress and more time to exercise.”If you’re beginning to suffer from dementia and other mental and physical ailments, early retirement will also allow you to benefit from home senior care services. With proper at-home care, more time to focus on yourself, and the ability to keep active in your older years, you’ll be amazed at how much better you’ll look and feel!
• More Time for Friends, Family, and Hobbies
  If you choose to retire early, you’ll also get a jump start on all of the fun things others must wait to enjoy. Whether you would like to spend more time with friends and family, pursue a favorite hobby, volunteer in your community or all of the above, early retirement will allow you to do all of the things you’ve wanted to do since signing your first employment contract 40 years ago.
• Greater Social Security and Pension Returns
  While your company pension or Social Security benefits will be lower if you decide to retire early, you may actually come out ahead if you play your cards right. For example, if you retire at 55 and begin drawing benefits according to the early retirement rules, you would be able to set aside up to $100 each month over the next 10 years. At five percent growth per year, you’ll have an extra $15,500 by the time you reach 65. You can also use the same strategy when you begin receiving early Social Security benefits at age 62.

Risks of Retiring Early

Running Out of Money

• Retiring early means you’ll need to rely on your assets for a longer period of time, increasing your odds of running out of money. Without a proper nest egg or supplemental income, there’s a chance you may end up in financial trouble and need to rely on family and friends later on down the road. This is especially true if you begin suffering from dementia and making unsound financial decisions. Increased costs, medical bills, stock market shocks, and so on can prove devastating to your retirement fund.
• Loss of Health Insurance for Medical Bills and Home Senior Care Services 
  Retiring early also means giving up your employer’s health plan. If you retire prior to qualifying for Medicare at age 65, you’ll need private health insurance.Although healthcare.gov can help you connect with your state’s insurance marketplace, you’ll need to pay the premiums, which can be quite costly depending on your age, health, and medical history. Choosing to forego health insurance until you reach Medicare age will leave you vulnerable to expensive medical bills should you end up in the ER or develop a serious medical condition.
• Lack of Purpose
  Another risk associated with early retirement is a lack of purpose and falling into a sedentary lifestyle. While many early retirees take the opportunity to pursue a variety of outdoor sports and a Lancaster active aging lifestyle, some suffer from boredom and depression. The key to a healthy early retirement isn’t sleeping and watching TV all day, it’s staying active and pursuing all of the activities you’ve always wanted to enjoy.

Retiring Early – The Bottom Line

Early retirement is a lifelong dream of nearly every American, and there’s a bevy of benefits that come with being able to hang up your work boots or toss away your name tag prior to age 67. In addition to finally getting the chance to spend more quality time with friends, family, and loved ones, retiring early will also allow you to stay active, pursue your hobbies, and much, much more. While there are risks involved, if your finances are in good shape, there’s no reason not to enjoy life to the fullest!