Many people around the world are working hard today so that they can retire early. But is that a good thing? The way things frequently go, most people work for four decades. After that, they retire. If things pan out like this, retirement is one of the most significant changes they will ever face in their lives. Those individuals that plan to retire early think about that because they are financially set. However, there are other challenges they are going to face, not only the matter of money. Today we are going to talk about the pros and cons of retiring early.
The Pros of Early Retirement
People like early retirement predominantly for one reason and one reason only – to stop working. There are many people that don’t enjoy their line of work, so they look forward to retirement to start something new. Just some of the benefits that come with extra time are the chance to travel or simply to spend more time with your loved ones.
In most cases, retirement doesn’t mean that you will never work again. There are people who look for retirement in order to work on their hobby or to start a small business. If you are retired with all your benefits and are younger than 66, your pension won’t be deducted until you start making more than $17,000 a year.
Another question that follows early retirement is the matter of health. Most people believe that they will preserve their health by retiring early. In most cases, they will, but that isn’t a certainty. According to the most recent research, early retirement will benefit you regarding fatigue and stress. This is especially important for those who had stressful jobs. On the other hand, early retirement can have an adverse effect on your physical health. According to a study conducted by the Harvard School of Public Health, people who retired early had a 40% higher chance of having a heart attack than people who are still working.
The Cons of Early Retirement
Health declines in most people after they retire. The reason behind this is that there are many individuals that obtain their self-esteem and sense of well-being from being employed. So when they are in the situation that there’s no more work for them – and they fail to replace it with something else – issues arise. They have a good chance of starting to live unhealthily, which can lead to various complications.
Of course, there is the matter of money, as always. If you retire early, all the money you saved will have to last longer. People decide on early retirement because they believe they will spend less when they retire, but the case is the opposite. As you get older, health care expenses will only rise. Furthermore, your life won’t stop! You will still need to socialize and have an active life, and all of that costs money. When their lives unfold like this, people start looking for part-time jobs. They do not always encounter open doors. People older than 50 have more trouble finding a job after they have been without one for a while.
Another factor, which is quite essential, is healthcare. Only individuals older than 65 are eligible for Medicare. If you had insurance with your job, you will have to spend a lot on a new plan while you wait for Medicare eligibility.
Most people are also unaware that there are penalties if they try to pull money out of their retirement fund earlier than it’s scheduled. If you are considering retiring early, you need to have a nice long chat with your financial adviser.
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