IN YOUR PRIME: Early retirement offers pros, cons

Early retirement has its advantages and disadvantages. Individuals must consider both to make the best decision for them.

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Early retirement has its advantages and disadvantages. Individuals must consider both to make the best decision for them.

Retirement is a milestone that is often the byproduct of decades of hard work. Though a growing number of working professionals have no intention of ever retiring, the vast majority of adults look forward to the day when they can call it a career.

The prospect of early retirement is enticing to millions of people. Though retiring early may seem like a no brainer for individuals in position to do so, a careful consideration of the pros and cons of early retirement can ensure people make the best decision.

Benefits of early retirement

For many people, early retirement is less about finding a beach to relax on and more about pivoting to a second career. In fact, a recent report from the Employee Benefit Research Institute indicated that 74 percent of workers plan to get a new job after they retire. In such instances, early retirement is often about turning a long-time passion into a second career. That can help adults achieve a lifelong dream, making it one of the better reasons to retire early.

Another advantage to retiring early is the chance to spend more quality time with family. One study from the American Psychological Association found that more than half of working professionals now check work emails after work hours, including on weekends. Forty-four percent even check their email while on vacation. Early retirement enables individuals to escape that round-the-clock career commitment, affording retirees a chance to spend more unfiltered quality time with the people they love most.

Retiring early also provides an opportunity to escape a daily grind that many people have indicated has become increasingly burdensome in recent years. The 2021 Work and Well-Being Survey from the American Psychological Association found that 79 percent of the roughly 1,500 adults surveyed had experienced work-related stress in the month prior to participating. Work is a leading cause of stress for many people, and stress has been linked to a host of health problems. Individuals who can retire early can benefit from less stress in their lives.

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Disadvantages to retiring early

Retiring early can seem like a dream, but it could turn into a nightmare for people whose finances aren’t as robust as they need to be to support a lengthy retirement. One report from the Boston College Center for Retirement Research found that around 50 percent of working families face a significant decline in their standard of living during retirement. Life expectancy has been on the rise in developed countries since 1900, so retiring too early carries some significant financial risk for people who have saved but not necessarily saved enough.

Retiring early also could make people more vulnerable to cognitive decline than they would be if they keep working. One study from researchers at Scotland’s University of St. Andrews found that people who wait until age 67 to retire experience less cognitive decline than people who retire prior to turning 67.

Out-of-pocket medical costs are another significant disadvantage to retiring early. Employer-sponsored medical insurance tends to cost individuals less than private plans, which is a significant consideration for individuals at a point in their lives when they may need to visit doctors more often.

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