Somewhere in your not-so-distant future is retirement, and there is nothing you can do to stop the clock from ticking. You will grow older, and each year you come closer to the last day of your 9 to 5 job. Since it is an unavoidable future, it is best to plan for it. Part of the planning process, and probably one of the first things you need to ascertain, is choosing the ideal time for you to retire.
Some people consider early retirement ideal for themselves, and some do not. When it comes to choosing the right time to retire, there are various factors to consider, and each one will contribute to providing a relaxing and happy retirement.
Advantages of Early Retirement
- Retiring early gives you more time and energy to do the things you’ve always wanted to do, like travel, devote time to your hobbies, or spend more time with the family.
- You can still start a new career. If you have always wanted to start your own business then retiring early can be ideal. Starting a bit younger than after the actual retiring age will benefit your future business since you will have an early head start.
- An early end to the day-to-day grind and work related stress can be good for your health and may actually increase your life expectancy. You can now take that grand vacation early while you still have the strength and good health to do it.
- Since nobody can really predict how long their lives will be, you are better off getting the benefits at an earlier age.
Disadvantages of Early Retirement
- One of the main disadvantages of early retirement is lower benefits in your IRA, Social Security and pension plans. This means that your monthly fixed income is much less than if you were to retire at the actual retirement age.
- Sudden change of phase can cause psychological distress for people who are workaholics and people who are always on the go. This is especially true for active individuals since they know they are still young and capable of working.
- Early retirement can result in the reduction of future savings. This will affect negatively any chances of saving a huge amount for something you plan on buying like a dream house for example.
- Your friends and colleagues may still be working which means they will still have limited time to spend with you, and they may still talk about work while you are around. In some cases, you might find yourself out of place in these conversations. This has more bearing on the emotional, psychological and social aspects of early retirement rather than physical and financial aspects.
Ultimately, the decision of whether to retire early lies with you, and it should be based on your preferences and current status. Psychological, emotional and financial preparedness should be taken into account before a final decision can be made. Once you retire, you can still return to the workforce, but this can be very difficult for a variety of reasons. Still, if you stay in the workforce, you will be working during the years you might have been able to spend doing what you wanted.
So, are you prepared to retire or do you want to keep on working? Which one is best for you?