The Pros and Cons of Early Retirement

Retiring early has advantages and disadvantages.

Deciding when to retire requires consideration of several factors, which include financial matters, health issues, and psychological concerns. The average age of retirement is usually between 63 and 65, although early retirement is too enticing of a prospect to pass up. Early retirees typically hang up their hat between the age of 55 and 62. This is why most active adult communities and age-restricted communities set the minimum age at 55.

Thinking of punching out early? Here are some pros and cons to consider when deciding about early retirement:


Time with Family – Early retirement allows for more family time. This could be great for those who like spending time with grandkids or who have the opportunity to help a relative with a newborn baby.

Travel – Early retirement creates time to travel for those who have wanderlust. Want to explore the world but not sure where to start? Check out our list of great travel locations in the United States.

Start a business – Retiring from a job allows free time to start a new business. Always wanted to start an online candle store or try your hand at becoming a freelance writer? Retirement gives you ample time to pursue that passion you’ve always had.

Fulfill dreams – Make a bucket list of ten things you’ve always wanted to do and start making plans. Early retirement will give you plenty of time to start ticking items off your bucket list.

Artistic career – Whether it is painting, playing a musical instrument, singing on open mic night at a club, or performing in a local theater, early retirement gives you the time and energy to do these creative things.

Hobbies – Early retirement creates free time to pursue these pleasures. Active adult communities are perfect for exploring new hobbies, whether it’s venturing into ceramics, woodworking, or trying a new sport.

Enjoy active things while still physically fit – Some people like activities that require physical fitness, such as skiing, hiking, or running marathons. Using the community’s state-of-the-art fitness center or joining a Zumba class are great ways to stay fit while meeting new friends and neighbors.

Concentrate on investing instead of working – Those good at investing have more time to spend searching for investments that will increase their nest egg. Those new to investing should seek the advice of a trained financial expert to keep investing potentially fruitful, yet financially sound.

Health – Early retirement can be a great time to focus on your overall health. Whether it’s starting a fitness regimen, experimenting with your diet, growing fresh produce, or practicing meditation, all that extra time will give you ample opportunities to discover a healthier way of living.


Loss of salary income and benefits – The financial impact of early retirement may be very substantial. Retiring early not only means that you will no longer be contributing to your accounts, but you’ll be tapping those accounts for a longer period of time than originally planned.

Penalties for early fund withdrawals – Tax-deferred retirement accounts have penalties for early withdrawals. Be sure to investigate those penalties with your financial advisor.

Run out of money – With the increase in life expectancy, which is now about 79 years in the United States as reported by the CDC, there is a need to have enough funds for a longer retirement period. A major illness can be financially devastating as well.

Social Security payments – Social Security monthly payments are 30% less if taken the first-year possible at age 62, instead of 65.

Health insurance – This is an expense until the age of 65 when Medicare coverage becomes active.

Boredom – Some find retirement unfulfilling and miss having their jobs. Moving into a 55+ community is a great way to avoid boredom, as the activities and amenities keep every resident as busy as they’d like.  

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