Early Retirement vs. Delayed Retirement: Which Is Right for You?

Retirement isn’t just about stopping work. It’s about taking on a new phase of life with intention.

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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

The most significant advantage of early retirement is the amount of time you will have. While still relatively young and healthy, early retirees can enjoy traveling, spending time with family, volunteering, and pursuing hobbies.

• There is less work-related stress

As reported in Headspace’s annual Workforce State of Mind report, 86 percent of workers experienced moderate, high, or extreme stress last year. Among respondents with extreme stress levels, 83 percent said their stress is primarily related to their work. However, early retirement frees you from the daily grind, corporate pressure, and long commutes. For those in high-stress or physically demanding jobs, retiring early can benefit their mental and physical health.

• An opportunity to explore new ventures

You don’t have to stop working when you retire early. This could be your chance to start a passion project, freelance, or consult—but on your own terms.

Cons of Early Retirement

• Financial strain

Approximately 56 percent of Americans lack a solid financial plan for their post-working years, according to Allianz Life’s 2024 Annual Retirement Study. Suffice it to say, a significant downside of early retirement is the increased financial burden. Your savings may need to stretch over an extended period, and you may not be eligible for Social Security or Medicare immediately. As a result, you must rely heavily on personal savings, investments, or private insurance.

• Loss of work-related benefits

Once you leave the workplace, your employer’s health insurance, life insurance, and retirement contributions are no longer available. You might have to spend a lot of money replacing them out of pocket.

• Risk of boredom or identity loss

Early retirement can profoundly impact the sense of identity of people who are devoted to their careers. When boredom sets in, routines or meaningful engagement become impossible.

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

The longer you work, the more time you have to save, pay down debt, and delay withdrawals from retirement accounts. This could result in a more comfortable retirement lifestyle. In addition, delaying Social Security can significantly increase your monthly benefit.

• Access to employer benefits

If you stay employed, you will continue to receive health insurance, a 401(k) match, and other difficult-to-replace benefits.

• Sense of purpose

Work can provide structure and intellectual stimulation and also provide a sense of community. In many cases, delaying retirement allows people to maintain mental sharpness and remain socially connected.

Cons of Delayed Retirement

• Health risks

Even if you are in great shape now, there is no guarantee that you will remain healthy in the future. If you delay retirement, you might miss years of active living while still physically capable.

• Less time for enjoyment

Working longer makes you less likely to travel, indulge in hobbies, and spend time with loved ones. Occasionally, health issues or unforeseen circumstances may lead to regret about this trade-off.

• Job market challenges

Older workers may face ageism or have difficulty adapting to rapidly changing technology or industry trends. As a result, it may be harder to remain competitive or find new opportunities when necessary.

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)?

By creating a retirement budget and consulting a financial advisor, you can determine whether early retirement or delayed retirement is more feasible.

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?

In general, early retirees prioritize lifestyle and freedom, while those who delay retirement may place more value on routine and stability. In the end, it’s up to you to decide what feels right for you.

Health and Longevity

Although health conditions are unpredictable, your present physical and mental state can help you make an informed decision. So, if you’re experiencing health issues now, early retirement could help relieve your symptoms and give you more free time. On the other hand, if you’re thriving at work and enjoy it, continuing may enhance your mental engagement and wellbeing.

It’s important to remember that the longer you work, the more likely you are to have health issues. As such, having a backup plan is always a good idea.

The Middle Ground: Semi-Retirement

Don’t want to commit to a full stop? You may want to consider a phased approach.

In semi-retirement, you can reduce work hours, switch to freelance work, or transition into a less demanding position. With it, you can enjoy some of the freedom of retirement while maintaining your professional engagement and earning income.

This is a popular option for those who would like to remain active but not burn out.

Final Thoughts: Which Path Is Right for You?

There is no one-size-fits-all solution to retirement. In addition to offering freedom and flexibility, early retirement offers the chance to enjoy life while you’re young. However, careful financial planning and emotional preparation are essential. On the flipside, delayed retirement brings financial stability, continued purpose, and often better benefits—but it can mean less leisure time.

Think about the following questions as a guide to your choice:

• Is it possible to retire now and still live comfortably for decades?
• Is my job still enjoyable, or is it wearing me down?
• How do I envision my retirement?
• What are my health conditions, and how might they affect my retirement?

Retirement isn’t just about stopping work. It’s about taking on a new phase of life with intention. So, whatever path you choose, make sure it supports your values, goals, and well-being. The key to retiring is to do so on your terms, whether you do so early, late, or somewhere in between.

By John Rampton

The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.