7 Signs Early Retirement Would Be a Mistake

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Unhappy retiree
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Millions of workers dream of retiring early. For some, this means giving up work before the traditional retirement age of 65.

Others might view early retirement as quitting prior to age 67, which is the Social Security full retirement age for most folks.

However, early retirement often sounds better in concept than it turns out to be in reality. In fact, there are certain characteristics some people share that might suggest a premature retirement would be a mistake for them.

If any of the following apply to you, view them as warning signs that should cause you to think twice before retiring early.

You’ve already started Social Security early or plan to

older man surprised interested intrigued
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When do you plan to file for Social Security benefits? For some folks, claiming early makes the most sense. Others will wring more from their benefits by claiming later.

If you file early, know that doing so means your monthly benefit will be permanently lower. Will you have enough money coming in every month to make ends meet? If you are not sure the answer is “yes,” early retirement can be a huge mistake.

And if you are in your early 60s today and both work and claim Social Security just so you can scrape by, consider that a major red flag: Needing both incomes to survive should convince you that retiring is likely impossible without a major downgrade in your lifestyle.

You have a lot of debt

Worried woman worries about retirement money
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A lot of retirees have debt. So, it is certainly possible to retire early if you are in the red.

It is also a bit foolhardy.

Financing several decades of retirement is difficult enough when you are debt-free. Adding the burden of these obligations to your budget can set you up for crushing failure.

Try to become debt-free — or close to it — before you retire. For tips on doing so, check out “8 Surefire Ways To Get Rid of Debt ASAP.”

Your retirement outlook is too rosy

Empty wallet
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We all hope retirement will be an endless string of sunny days. In reality, we will likely encounter more than a few storms along the way. Like it or not, your retirement plan might have to weather unhappy events such as:

  • A recession
  • Health woes
  • The unexpected death of a spouse
  • Soaring inflation

If your retirement plan is based on a rosy forecast where life unfolds smoothly day after day for decades, retiring early could end in financial disaster.

Your health is not great

Home health aide taking a patient's blood pressure
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For millions of people, group health insurance is one of the biggest perks of working. If you lose this benefit and have not reached the age of 65 — when you will be eligible for Medicare — you will need to find health insurance on your own.

While you should be able to find coverage on a health insurance exchange, this can be expensive. In addition, the coverage is usually a lot less robust than what you would find in a workplace plan.

Another unhappy reality is that most of us need more health care services as we age. Out-of-pocket costs associated with such care can be high. Working a few more years — rather than retiring early — can help you build a larger nest egg that you can use to pay for medical services when you need them.

Others are financially dependent on you

Grandparents eating at a restaurant with their grandchildren
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Even if your own financial boat is shipshape and ready to sail through stormy seas, it’s possible that you will need to regularly help patch up the leaky rowboats of those you love.

It probably makes sense to push retirement into the future if your adult children are struggling with money or if you plan to financially support your grandchildren or other loved ones.

Delaying retirement is particularly sensible if you do not have a lot of cash in savings and expect to live on a fixed income.

You love your job

Happy senior worker looking confident and successful
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Some jobs are drudgery. But there are millions of other positions that bring deep satisfaction to those who work in them.

Even people who regularly complain about their jobs might still feel a sense of real accomplishment — and even joy — in going to work every day and getting something done.

If you love your job, early retirement might rob you of a source of fulfillment that will be hard to replace. That can also be true even for those who feel a mixture of liking and loathing for their work.

Your only dream is ‘not working’

Relieved businessman or worker relaxed at a laptop not worried about work
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Ah, early retirement: A chance to finally drop out of the rat race!

But then what? Do you have plan for how to spend your days? If not, you might end up feeling bored and aimless. It’s even possible you could sink into depression.

Early retirement can feel empty and lonely, especially if your spouse and friends continue to work. So, before putting your career in the rearview mirror, make sure you have a clear picture of where you want to go on the road ahead.

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