8 Things No One Told You About Retiring Early

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The average U.S. retirement age is around 64, and Americans generally spend more than 40 years working. Sounds like a really long time, doesn’t it?

Maybe that’s why the FIRE movement has gripped so many folks in the past decade. FIRE stands for “Financial Independence, Retire Early” — which sounds like a dream come true to a lot of hard-working folks.

However, the current retirement system is predicated on certain expectations, such as “work until at least 65 and get Medicare” and “don’t take Social Security too early.” Is it really possible to retire at 55, or even at 35?

Maybe. But you need to consider all of the angles. Following are some of the realities of early retirement you might not have considered.

1. Retirement costs money

Senior couple with cash
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Suppose you drop out of the rat race at age 53 while your spouse keeps working. With proper planning, your household can survive on just one paycheck. However, all the Fun Retiree Stuff — travel, new hobbies and the like — could quickly eat a hole in the budget.

Or maybe both of you jumped ship a little early, planning to delay Social Security with passive income streams such as rental property, part-time consulting work or a side hustle. Everything seems fine, until you need to replace a sewer line or put on a new roof.

Big issues or having too much fun could tempt you into tapping your retirement savings earlier than planned. Doing so could trigger penalties unless you qualify for an exception. It also lowers your fund balance, depriving you of compound gains in years to come.

2. You need to find health insurance

man helping mom on computer
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Sure, retirees can get Medicare — starting at age 65. (You may be eligible sooner if you have a disability or certain diseases.) Until then, you’re on the hook for all of your own health care costs, unless you have a working partner who can cover you on their insurance policy.

Visit the Healthcare.gov site to see if you qualify for coverage or contact a health insurance broker to find the best private insurance deal for your situation. Work to keep costs down with help from “12 Ways to Save Money on Health Care.”

3. Your pals might push back

Angry grumpy man neighbor
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You worked your butt off in order to retire a little earlier than your friends. (Or maybe a lot earlier.) Don’t be surprised if those folks send snarky remarks your way.

  • “Wow, it must be nice not to have to go to work!”
  • “We can’t stay out too late because some of us still have to get up early for work.

Lauren Keys entered “permanent semi-retirement” with her husband when both were 29 years old; they freelance a bit and maintain a personal finance blog called Trip Of A Lifestyle. And yeah, she hears these sorts of comments every now and then.

“But I’ve tried not to take it the wrong way,” she says.

Like Lauren, you’ll need to develop a thick skin. Or find new friends. Speaking of which …

4. Your social life will change

unhappy retiree
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Wouldn’t it be fun to hit the senior movie matinee or a midweek baseball game with your pals? Oh, wait: They’re all at work.

Maybe on the weekend, then? Nope. They’re mowing their lawns, cleaning their houses, running errands and doing all the other things you took care of during the week. The older we get, the longer it takes to do these things — and the more it takes out of us. That means Sunday is out, too, because they need to rest and get ready for another grueling workweek.

You might need to look for some new weekday friends. If you do, be patient: Research shows that it takes 40 to 60 hours together to form even a casual friendship, and it can take as many as 100 hours.

5. You might feel lost

Skeptical senior looks worried or has a headache
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No alarm clock to set. No more commute. Zero deadlines. Sounds like heaven to some people and like purgatory to others.

Diania Merriam, founder of the EconoMe financial independence conference, underwent “an existential crisis” after retiring at age 33 from a career in marketing. Being able to direct her own life felt “disorienting,” she says, and all that free time brought some personal issues to the forefront.

“When there isn’t a busy schedule to distract you, you can’t help but notice all the emotional stuff you buried for decades,” she says. “It took me over two years to sort this all out.”

Early retirees who need structure in their lives will have to build it themselves, which isn’t always easy. As for previously buried issues, dealing with them probably won’t be easy either.

6. Early retirement may affect Social Security

Older couple worried about Social Security and expenses
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If you leave the workforce super-early, it might affect how much you’ll be able to collect in retirement from your Social Security benefits.

Generally speaking, our earnings from our careers peak in our 50s, while Social Security is based on our 35 highest-earning years. Suppose you start working in your early 20s and want to hop off the gravy train at 50. That’s not even 35 years total.

If you have fewer than 35 years of earnings, each year with no earnings will be entered as zero in the benefits calculations. Unless your work was extremely well-compensated, your Social Security benefit won’t be optimal.

This is important, since Social Security will be there even if you use up all your other retirement funds. According to the Social Security Administration, that monthly benefit provides about 30% of older Americans’ income — and as much as 90% for some people.

7. You could live a long, long time

Older woman smiling and looking out a window
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Financial planners call the first decade or so of retirement the “go-go” years when pastimes like travel, hobbies, and visiting (and spoiling) the grandkids keeps retirees hopping. This can also siphon a lot of dollars from the retirement fund.

Activity-wise, the next two decades (“slow-go” and “no-go”) might not cost as much. However, they might include things like renovating your home to age in place or dealing with medical costs Medicare won’t cover.

Those retirement accounts look healthy now. But if you retire at age 55, you’ll have to make your dollars last for another 28.5 years on average. And of course, many people live longer than average.

In other words, you might have to stretch your dollars a lot further than you think.

8. Your relationship might suffer

A retired couple argues about financial problems
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Yay, early retirement — finally, your time is your own! But if your partner is still working, there could be some friction regarding things like household labor and finances.

The still-working spouse may resent the footloose-and-fancy-free partner or feel they’re being left behind as the retiree has new adventures and meets new people.

And if you both decide to retire early, without discussing how that will look? Yikes. Suppose he wants to sit home and catch up on years’ worth of science-fiction shows while she wants to try out the van life? Or maybe he dreams of becoming an entrepreneur while she’s burned out from an intense career and just wants to garden and read a lot.

Without clear communication, and clearly defined expectations, early retirement could sink your relation-ship.

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