A lifetime of working compels many people to look forward to their retirement. Some people even work to retire early. But what are the advantages of early retirement beyond starting a life of leisure? And are there any detriments to this plan?
A recent survey by the financial services provider TIAA-CREF found that 37 percent of Americans plan to retire before age 65. However, many of them will not have control over the matter. Those who do may want to consider the pros and cons of early retirement, and it’s always a good idea to meet with a financial advisor before making any decisions.
Many people seek early retirement so that they can live a life free of the constraints of schedules. In retirement, time becomes, more or less, a retiree’s own.
Leaving a job can be a boon to a person’s health as well. Relieving oneself of the pressures and stresses of professional life can free up the mind and body. Stress can affect mental and physical health, taxing the heart and contributing to conditions such as depression or anxiety. According to the Mayo Clinic, stress can cause headache, muscle and chest pain and contribute to trouble sleeping.
The earlier the retirement, the more opportunity to travel before health issues begin to limit mobility. Early retirement also can be a way to volunteer more or even start a new job opportunity — one where workers have greater control over their schedules and careers.
One of the disadvantages of early retirement is a loss of income. Contributions to retirement accounts also cease at retirement. This can lead to financial setbacks if adequate savings were not allocated for retirement. According to the resource Wealth How, some people who retire early fear outliving their savings.
While retiring early may be good for health, it also can have negative consequences. An analysis from the National Bureau of Economic Research found that retirement can lead to declines in mental health and mobility as well as feelings of isolation. Retiring early may jump start these health implications.
Another consideration is that health insurance provided by an employer typically ends at retirement. That means having to pay out of pocket until a person ages into government-subsidized health care, such as Medicare in the United States, at age 65.