While you might be hearing stories about how early retirement is a game-changer in today’s economy, reality often shows that this idea has its flaws, and there are dozens of them.
To prevent retiring too early you should look for signs that you’ll find yourself in a bundle of financial worries in your later years, and this article will help you recognize those as early as possible.
Will your savings last long enough?
The most important factor when planning to retire early is having a hefty amount set aside for at least 30-35 years of no labor-related income because the last thing you need is to find yourself in a position where you need to work to support yourself, but your age simply doesn’t allow it.
In order to ensure you don’t run out of cash early, setting a conservative withdrawal rate is key, and while this doesn’t mean you have to neglect your needs and desires, you should at least look to save enough to last you if your investment accounts flop that year.
Without the ability to know your savings will last you even if you withdraw enough to cover your costs, you shouldn’t be opting to retire just yet.
The main issue with retiring before turning 65 is that you don’t qualify for medicare until then, and without this option for a healthcare plan, you’ll often be relying on either your employer’s insurance plan under COBRA, but this option is only eligible for 18 months.
Retiring also means that your healthcare premiums will be significantly higher as your employer will soon stop subsidizing them, and you’ll find yourself paying way more for healthcare than you can actually afford at the time.
While getting health insurance through your still-employed spouse’s plan is definitely an option, it’s still only a temporary one, and with most partners choosing to retire together, it’s often an unrealistic one too.
Healthcare can easily become a serious issue for early retirees, and in this 2-year-long pandemic we’ve been experiencing, it’s never been more apparent, so choosing to give up employer-provided health insurance without a proper idea of how to replace it is a less-than-optimal decision.
You’ve finally done pottery, painting, and traveled the world. What now?
And finally, the most dreadful sign that you’ve retired too early is that you simply have no idea how to spend your time now that your 9-to-5 is out of the picture.
With all this time on your hands, you’ll feel like the world is your oyster, but that high can quickly fade, and you’ll begin to miss the workplace atmosphere and the friends and colleagues you left behind.
If your current career is making you unhappy and you’re thinking you should retire, perhaps a career change is still in order.
People were known to make complete 180 degree turns in their careers even in their 40s and 50s, and it’s often how they find happiness.
If you ever find yourself wondering if you’ll even have fun during your golden years, maybe early retirement just isn’t for you.