There is no doubt that retirement is one of life’s most significant milestones. Most people dream about it from the moment they get their first paycheck. However, deciding when to retire is important. After all, some people count down the days until early retirement. However, some stay in the workforce well into their sixties or even seventies.
The thing is, there’s no universal “right time” to retire. You will want to determine the appropriate timeline for you, depending on your lifestyle, financial health, career satisfaction, health status, and personal goals. Our goal is to help you decide what path is right for you by comparing the pros and cons of early and delayed retirement.
What Is Early Retirement?
The term “early retirement” refers to leaving the workforce before the traditional retirement age of 65. Especially for those who are following the FIRE movement (Financial Independence, Retire Early), this could mean retiring in their 50s or even their 40s.Pros of Early Retirement
- You will have more time for yourself
- There is less work-related stress
- An opportunity to explore new ventures
Cons of Early Retirement
- Financial strain
- Loss of work-related benefits
- Risk of boredom or identity loss
What Is Delayed Retirement?
Delayed retirement usually refers to working after the traditional retirement age of 65. Some people do this out of necessity, while others enjoy the structure and challenges of their work.Pros of Delayed Retirement
- Improved financial security
- Access to employer benefits
- Sense of purpose
Cons of Delayed Retirement
- Health risks
- Less time for enjoyment
- Job market challenges
Financial Considerations: A Crucial Part of the Decision
Whether you retire early or late, financial readiness is a huge part of the equation. To solve this, you should ask yourself the following questions:- Do I have enough savings to support myself for 20, 30, or even 40 years of retirement?
- How am I going to cover my healthcare costs?
- Have I taken into account inflation and market downturns?
- Can I cover my expenses with my income streams (Social Security, pensions, investments)?
Lifestyle and Personal Goals
Finances aside, you should also consider how you want to spend your time.- Do you have any travel plans on your bucket list?
- Is mentoring or volunteering appealing to you?
- Are you enjoying your current job or counting the minutes until you can quit?
- Can you step away from your professional identity emotionally?