The Surprising Benefits Of Early Retirement

Early retirement is a dream for many Americans. The thought of finally having the chance to “take things slow” and enjoy the world around them sounds very appealing, and there are some pros and cons you may not have considered. We’ll be looking at these pros and cons, as well as some surprising benefits to […]...
David Roberts
October 5, 2022
Home » Goals » The Surprising Benefits Of Early Retirement

Early retirement is a dream for many Americans. The thought of finally having the chance to “take things slow” and enjoy the world around them sounds very appealing, and there are some pros and cons you may not have considered. We’ll be looking at these pros and cons, as well as some surprising benefits to being able to retire early. 

What is an early retirement?

The definition of early retirement depends some on when you expect to be able to retire. Many Americans expect to retire around the age of 67, though that number may vary depending on factors such as Social Security, 40(1)k status (for eligible employees), and personal investments. In discussing the benefits of early retirement, we’ll be looking at retirement before 67 years old. 

Surprising Benefits of Retiring Early

1. Health Benefits

By retiring early, you may notice various improvements to your health. This can especially be the case if you experience high levels of work-related stress. By retiring early, you may experience less stress and improved mental health. You may also find yourself to be more active than you were when sitting at your 9-5 job, improving your physical health.

2. New Opportunities 

By retiring early, you can take the opportunity to do what you want with your time. This may include starting that business you’ve always dreamed of, or pursuing that career you were passionate about in your 20s. In any case, retiring early provides the flexibility to follow your dreams. 

3. Free Time

Having free time is one benefit that draws many people to early retirement. It can give you the opportunity to discover new hobbies or interests, or perfect skills you already have. Who knows? You may even discover a new passion.

Early retirement also gives you the chance to socialize with new people. By having free time from 9 to 5, you will be able to meet new people that you otherwise wouldn’t see during the work day. This can lead you to develop lifelong friendships and new memories.

4. Traveling

In many careers, employees are restricted to two-week vacations. By retiring early, you will be able to break away from that restriction and travel to the destination of your dreams. Plus, since you’re traveling at a younger age you may have better mobility to enjoy your adventure even more!

5. Learning to Manage Spending

While the need to manage spending during retirement may be looked at as a con, there is also a benefit to it. With your time freed up in early retirement, you can take the time to coupon and look for the best deals. Some of these deals may only be available to you since you are retired! For instance, you can go during weekdays to attractions or in off-peak seasons on trips, which may save you a good bit of money!

Cons of Early Retirement

When looking at the benefits of early retirement, it is important to weigh the cons as well.

1. Financial Management

One important consideration for early retirement is your financial situation. Early retirement means that your savings will need to last longer. While having a passive income and investments can help with this, it is important to use financial retirement planning to ensure that you are prepared to take this step. You also won’t be able to draw full Social Security benefits, meaning that you will want to take this into account when creating your retirement plans. Creating a plan for anticipated expenses (such as paying for health care benefits and groceries) can help prevent surprises that might harm your financial state.

2. Health Insurance Plan

Since you are not eligible for Medicare until you reach 65 years old, you’ll need to find out of your ex-employer provides a health insurance plan for eligible employees (or former employees) and what health care benefits are included. If they do not, you will want to find what health care benefits and health care options you need. This may include health insurance, disability insurance, and dental insurance. Paying for your own health plans can become expensive, so it is important to have health savings and weigh what health care options are available to you.

3. Missing Work

Making the transition from working every day to having free time can be difficult for new retirees. You may find that you miss the structure and routine of your job, or that you miss your former coworkers. You might even feel a renewed excitement for your career, and desire to reenter the workforce.

What do You Need to Retire Early

What you need to reach early retirement is different for every person. After setting goals for your retirement, you will have a better understanding of how much of a nest egg you need to retire. In general, here are some tips for retiring early: 

  • Reinvest extra money received from tax refunds, bonuses, etc.
  • Cut expenses
  • Be diligent about saving
  • Utilize a 40(1)k (for eligible employees)
  • Build a passive income stream

Final thoughts about early retirement

While early retirement has important cons to consider, there are many surprising benefits to it as well. Overall, it is important to plan ahead and ensure that you make the decision that best meets the long-term needs of you and your family. If early retirement is part of that plan, you have many exciting benefits to look forward to such as more free time and new opportunities. 

Get in Touch

Plan For Your Goals Logo

Many have no financial plan for retirement. At Plan For Your Goals, my mission is to help both the newly retired and the nearly retired take control of their finances with an evidence-based plan so they can retire with confidence.

Contact

Branch Office: 5954 E Bay Blvd, Gulf Breeze, FL 32563

(850) 786-3400

david@planforyourgoals.com

Check David's background on FINRA's BrokerCheck

Plan For Your Goals, LLC is a state registered investment adviser. Plan For Your Goals, LLC may only transact business in those jurisdictions in which it is registered or qualifies for an exemption or exclusion from registration requirements. Plan For Your Goals, LLC’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Plan For Your Goals, LLC’s web site on the Internet should not be construed by any consumer and/or prospective client as Plan For Your Goals, LLC’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by Plan For Your Goals, LLC with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Plan For Your Goals, LLC. A copy of Plan For Your Goals, LLC’s current written disclosure statement discussing Plan For Your Goals, LLC’s business operations, services, and fees is available at the SEC’s investment adviser public information website or directly from Plan For Your Goals, LLC:  Click here to download a PDF copy.

This website and information are provided for guidance and information purposes only. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice.

Plan For Your Goals, LLC throughout this website has provided links to various other websites. While Plan For Your Goals, LLC believes this information to be current and valuable to its clients, Plan For Your Goals, LLC provides these links on a strictly informational basis only and cannot be held liable for the accuracy, time sensitive nature, or viability of any information shown on these sites.

The SmartVestor program is made up of financial advisors and other investing pros from across the country. SmartVestor is an advertising service that Plan For Your Goals, LLC pays a monthly fee for introduction to potential clients. Our firm utilizes this service as a lead generator. SmartVestor utilizes the “Ramsey Values” and uses the Ramsey Solutions as a paid promoter of SmartVestor Pros. SmartVestor has a vetting process that includes a certain number of years of full-time experience as a registered securities professional, and agreement to the Code of Ethics. Potential clients can use this matching service at no cost.

Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

 Copyright © 2023 Plan For Your Goals, LLC. All rights reserved.