Broker Check

The Pros and Cons of Early Retirement

March 21, 2023

Retirement: that time we think about for most of our professional lives, wondering what it will be like to have exponentially more downtime, not to have to ask for days off, and to do the things you enjoy most. When work has been a priority of your entire adult life, it’s hard not to be curious about retiring. For some people, early retirement is a goal, meaning retiring before age 65. Client 1st Financial has laid out the pros and cons of this option, all for you to take into account when making your personal retirement plan


Retiring early can be good for your health. Exercise, nutrition, sleep, and time with nature easily fall off our list of priorities while working full-time. With early retirement, refocusing your goals toward personal wellness becomes easier, which will pay off as you age. Those in higher-level jobs will see an especially large increase in mental health when their work-related stress diminishes. 

You can start fresh. Retirement doesn’t have to mean halting all professional work. It gives you the chance to work because you want to, not because you have to. If you’ve always dreamed of turning your side hustle into a business, retiring early could be a good option for you. You could also decide to work part-time or become a freelance consultant in your industry. Also, for you, starting fresh could mean not working at all. No matter what you choose, you get to be motivated by personal values. 

You can deepen personal relationships. If early retirement is feasible, you likely made personal sacrifices and spent time away from loved ones throughout your professional career. In your downtime in retirement, you can reconnect with those people and make up for any lost time. 

You can make a great impact on your community. Beyond friends and family, you can deepen your impact on your area by volunteering or delegating some of your retirement funds to chosen charities. Similarly to health activities or personal relationships, community involvement can sometimes fall on the back burner when you’re busy working. If this is the case for you, taking time and resources to give back during your early retirement is a great option. Philanthropy is a major factor to plan for when making retirement plans, and it is a specialty of Client 1st Financial; for assistance, click here.


Social security benefits are smaller. The sooner you start to take Social Security, the lower your benefits will be. Even though, as a society, we think of 65 as the age for retirement, according to Social Security, the “full retirement age” is 67. If you start taking out benefits any time before you turn 67, your monthly benefits will be less than what they could be. You will receive a smaller monthly amount for the remainder of your life than if you wait until 67 to retire.

Your retirement savings will need to last longer. If you don’t retire early, you have more time to save for retirement and less retirement time to spread your savings across. More time out of work means years of no income, leaving more time for external variables to turn your financial plan sideways. Working longer gives you more time to build a rock-solid financial plan. 

You might need to find health insurance. Unless your ex-employer offers retiree health benefits (this is rare, only 29% of large firms offer this), you will be responsible for paying for health insurance until you’re eligible for Medicare at 65. In addition to this, fees will likely be higher than you’re used to. Insurance premiums can easily double or triple what you’re used to paying on your work plan, and as you age, health insurance rates skyrocket. 

Early withdrawal penalties come into play. Different types of investment accounts have differing rules, but if you take money out early (before a certain age, based on the account type), you will likely face extra fees. Knowing the costs associated with accessing your money is key. Working with a financial planner, like Client 1st Financial, will help you better understand these fees and how to account for them when building a retirement budget. 

You could get bored and miss working. When you read this, you might think, “there’s no way I would miss working! I want more free time,” but it can be a very tough transition to go from working full-time to having completely unstructured days. Additionally, you may get lonely. Leaving that environment can be challenging if you work in a lively setting and are very close to your colleagues. It’s hard to re-enter the full-time workforce after retirement, so it is crucial to ensure that you will enjoy this transition, not regret it. 

Whether you choose to retire early or not, a plan must be in place. Work with Client 1st Financial to assess your current financial state, build a plan, and understand your personal pros and cons to see if early retirement is right for you. There is no right or wrong answer, but you must be prepared; we can help you achieve that. Contact us here.