Many people wish to retire early, but there are some important decisions to make before planning an earlier retirement date. It is smart to speak with a knowledgeable and experienced financial planning expert too for best end results and fewer unwanted surprises. Read on for 15 reasons why it may be a good idea to retire at 62 or before if possible.
Reason #1: Retire Early Only After Carefully Thinking Everything Through
As with any other financial decision, set an earlier retirement date only after making sure that you have carefully considered your options first. There are some terrific retirement planning services, online retirement guides and investment related apps that can help you with this entire process.
Some key things to think about include:
- Making your retirement goal plans
- Setting a realistic after retirement budget
- Deciding what you truly want to do after retirement
- Do you have the financial means for an earlier retirement date?
- How healthy are you or your spouse?
- Your estimated after retirement living expenses and housing plans
- Do you and your spouse enjoy spending lots of time together or not?
Reason #2: Consider Retiring Early if You Wish to Live a Healthier & Longer Life
Many healthcare professionals recommend an earlier retirement age to increase the chances of a healthier and longer after retirement lifestyle. This is especially true if you work in a high-stress job or career field or a physically demanding job that can lead to a greater chance of injuries as you age. However, it is still important to have a healthy living plan that involves keeping your mind and body active after retirement.
Reason #3: Retire Early if You Have Plans for Starting Another Business or Career
There are many individuals who plan to start another business or a different career after they retire from their main job. It may make more sense to plan an earlier retirement date to increase the chances of success and a smoother transition.
Many retirees work seasonal or part-time jobs rather than another full-time work position. This can be an excellent way to earn a bit of cash while keeping overall stress levels down and still having plenty of free time to do those activities that you love and enjoy.
Reason #4: Consider Retiring Early if Planning to Go Back to School
Keeping your mind sharp as you grow older is important to retain certain brain function processes according to many mental health professionals. Learning new things on a regular basis is an easy and fun way to achieve this goal.
Many retirees decide to go back to school after retirement. Lots of community educational programs allow seniors to sit in on classes that are not full each semester or offer discounted rates on educational services.
Many cities have senior citizen programs or local arts and cultural centers that also offer free or low-cost classes on things such as dance, painting, music, woodworking and theater among many other options. Taking up a new hobby, like golf, cooking or sewing, is another fantastic method to learn a new skill that can bring hours of enjoyment.
Reason #5: Consider Early Retirement if Planning to Downsize & Simplify Your Life
Perhaps you intend to downsize your living quarters by moving into an apartment, a retirement community or other housing option after retirement. Doing this a bit earlier may make it financially possible for you to retire at an earlier age. Senior citizen apartments and other housing options can be less costly and easier to upkeep in many cases.
Reason #6. Retire Early if You Are Financially Secure
It is crucial to plan your retirement funding to help ensure that you will be financially stable during this time. Many seniors and others approaching retirement age are already financially secure. These individuals may be able to comfortably retire earlier.
Of course, finances and the economy can change very rapidly and unexpectedly. It can help to invest money earlier and save back funds to help buffer these changes should they arise in the future. It is wise to consult with a qualified financial or investment expert to help ensure that your retirement budget planning will cover your intended future retirement financial needs.
Reason #7. Retire Early if You Have a Decent After Retirement Healthcare Plan
Healthcare following retirement demands a bit of planning ahead of time to help decrease the chances that an unexpected medical crisis could wipe out your entire retirement savings later in life. Many individuals already have a decent healthcare plan that is affordable for their future retirement healthcare costs and other related healthcare needs.
Choosing the right medical healthcare plan after retirement is an important decision that should not be made in haste. There are many different healthcare plans with changes that occur each year, so starting to plan for this retirement expense earlier makes sense and can help retirees manage their retirement better.
Reason #8. Many Retire Early if They Do Not Need to Draw Social Security Early
The current age that individuals may retire and collect social security benefits is subject to change. Therefore, it is important to begin thinking about your ideal retirement date earlier rather than waiting until later. In general, most benefit plans allow retirement from about age 62 up till age 70 or so.
The amount that can be drawn each month from social security benefits will increase substantially the higher the retirement age. In addition, many companies offer 401K and other retirement plans that can help increase the amount of funds that a retiree has. It may be possible to retire earlier if you do not need to begin drawing social security benefits right away.
Reason #9. Consider Retiring Earlier if You Are Debt Free or Have Little Debt
Ideally, individuals should not plan to retire until they are debt free or have little debt by their retirement age. It is best to plan on having your home, other property, cars and other expensive items paid off fully prior to reaching your intended retirement age. For those fortunate individuals who have little owed debt, an earlier retirement date could be a smart move.
Reason #10: An Early Retirement Is Easier if You Have Multiple Forms of Income
In general, an early retirement will likely be much easier if you have access to multiple forms of income at that age available to draw from. It can be difficult to meet living and other expenses if you only have social security benefits or just one method of financial funding.
Many individuals plan for retirement by investing funds into multiple stocks or other retirement plans, and these retirees may be able to retire much earlier as a result.
Reason #11: Retire Early to Coordinate Your Retirement Date with Your Spouse
Couples often plan their retirement dates to coordinate their different retirement funds and benefits. A spouse who earns more might want to wait a bit before retiring to help ensure sufficient funds. A spouse that makes a lower amount may do better to retire earlier if the spouse has a better retirement income.
Reason #12: Consider Early Retirement if You Plan to Relocate or Travel
Some retirees will change their intended retirement date to correspond with their spouse's retirement timetable to travel or relocate at the same time.
Reason #13: Your Overall Health May Impact Retirement Plans
Another situation to consider before retirement is the state of your health. A person who has a chronic or other serious ailment will need to consider their retirement plans carefully. Some individuals nearing retirement age may need to retire early to improve their chances of leading a longer and healthier life following their retirement date.
A spouse or other family member who becomes a dependent due to poor health can also impact the date of retirement for the main breadwinner. Those fortunate people who are in good health may be able to plan on an earlier retirement age depending on their unique circumstances.
Reason #14: Consider Earlier Retirement if You Need Extra Cash Now
Sometimes, a person nearing the age of retirement might find themselves in need of some extra cash now. If a serious financial problem arises, it may make financial sense to retire earlier if able to collect on a pension fund or other retirement benefit. Drawing on those funds can make it possible to avoid serious debt or financial ruin.
Of course, many retirement plans have strict withdrawal rules that could end up costing more in increased penalties, fees and other charges.
Reason #15: Plan Retirement Funding Sooner to Match Early Retirement Goals
Most financial advisors strongly recommend sitting down with a professional able to explain all the person's retirement and other financial options. It is crucial to plan a retirement budget earlier to match your early retirement financial needs and goals.
There are a lot of ways to keep finances stable after a retirement date. This can include reinvesting money, selling a home or other valuable property, taking on a part-time job following retirement and opening a new business among many other options.
Final Thoughts About Retiring Early
Planning your retirement early could be the right option for you. Retiring early can offer many benefits, but not every retiree will be able to do so without proper planning well ahead of time. Taking the necessary time and putting forth the effort of researching all your possible retirement financial options can help to ensure that you are ready and able to enjoy your retirement years doing what you planned.