Early retirement – retiring at 62 or before – seems like a wonderful dream to a lot of people. You’ve been in the workforce for decades. You have focused on work with the goal of enjoying the rest of your life on your own terms. But is it too early to get out of the rat race? Retiring at age 62 is quite a bit different (good and bad) from retiring later.
If you’re wondering whether it’s the right thing for you to do, this article is not intended to slow you down.
Is it time to walk away from work and into retirement?
Below are 12 reasons why you really should go ahead and retire at 62 or earlier! (And, if you want advice on how to make it happen, here are 37 early retirement tips.) Or, start planning your early retirement now with the NewRetirement Planner, the best online retirement planning tool! It’s called, “a new approach,” by Forbes Magazine.
Reason to Retire Early #1: You’ll Stay Healthier Longer
There’s no doubt that working and being active can help you stay healthy much longer than sitting with your feet up. But not all work is good for you; sometimes it’s detrimental to your health.
Retiring at 62 from a backbreaking job or one with a disproportionately high level of stress can help you retain, or regain, your good health and keep it longer.
Just be sure to have a plan for being mentally, socially and physically active after retirement. Jobs are good for keeping you engaged. But, work is not the only way to maintain vitality.
#2: Retire at 62 (or Earlier) if You Know What Else You Want to Do
Do you have a dream that you’ve always wanted to pursue, but never had the time? Maybe you want to write a novel. Have you toyed with the idea of joining the community theater? Or perhaps you’ve always wanted to grow your own food on a farm. Maybe you want to raise sheep, harvest the wool, and open a yarn shop.
If you have a real goal and you know you’re passionate about it, you’ve got a good if not GREAT reason to retire early. (Not yet sure what you want to do? Here are 120 ideas for what to do in retirement.)
They say that no one ever reached very old age regretting the things that they did. What’s regretted are the things not tried, the chances not taken, the dreams left dusty and neglected on a shelf. If you are able, retiring at 62 can give you many years to seek out that dream and really enjoy it.
#3: Retire Early if You Can Make Compromises to Ensure Security
For those contemplating early retirement, a crucial consideration is the willingness to make strategic compromises in the pursuit of long-term financial stability.
Achieving lifetime financial security in early retirement requires a proactive approach and a realistic understanding of potential trade-offs. While embracing frugality can pave the way for financial freedom, it may also necessitate adjustments and sacrifices along the way. Balancing short-term desires with long-term goals, such as travel or luxury purchases, requires careful consideration and discipline. Additionally, staying vigilant to changing market conditions and reassessing financial plans periodically is essential to adapt to evolving circumstances. By embracing flexibility, discipline, and a willingness to make compromises, individuals can navigate the complexities of early retirement and embark on a fulfilling journey towards lasting financial security.
#4: Plan to Retire Early if You Are Ready to Focus on the Goal
Maybe you aren’t quite financially ready to retire early. Should this hold you back? Absolutely not. Especially if you are ready to focus on a financial goal.
Most Americans are unprepared for retirement and may need to continue working during their 60s and beyond. However, don’t let past mistakes of lack of planning and saving hold you back now!
Set a goal to retire early, start analyzing your finances and design a plan to get out of the workforce as soon as you can. The sooner you make an effort to retire early, the sooner you will be able to do it. This may entail reimagining traditional notions of retirement and embracing alternative lifestyle choices to bolster financial security. By adopting a frugal mindset and prioritizing needs over wants, individuals can stretch their retirement savings further, ensuring they last throughout their lifetime. Downsizing to a more affordable living arrangement, cutting unnecessary expenses, and diligently managing investments are all viable strategies to safeguard financial resources. Moreover, maintaining a diversified income stream through part-time work or entrepreneurial ventures can provide a supplementary source of income, reinforcing financial resilience in the face of unexpected challenges.
The NewRetirement Planner makes it easy to get started. Try different scenarios and find your path to retirement as early as possible.
#5: Retire at 62 if You Want to Learn New Things
If you devoted your education and life to a focused career, there might come a point when you want to try something completely new. Taking retirement at 62 means you have time to pursue education in a different direction, and still have time to use and enjoy it.
Adult students typically perform better than their younger counterparts. And, even if you don’t pursue a new degree to use in the workforce, learning for personal edification can be rewarding. You might even gain a new skill set to use in starting a business of your own.
#6: Retire Early if You’ve Really Thought it Through
Early retirement isn’t something to enter into lightly. You might have your finances in order, but you also need a solid understanding of how your life will change. For example, it can be more stressful than you imagine, spending every hour of every day with your spouse, especially if you’ve only spent a few hours together daily in the past.
For someone who is accustomed to going to work Monday through Friday, the sudden change of having no schedule and everything that accompanies it can be difficult to deal with. If this is you, perhaps you might want to try a sabbatical instead of an early retirement.
However, if you’ve already done your homework and are just waiting for 62 to arrive, then there’s nothing holding you back.
#7: Retire Early if You Don’t Need to Start Social Security Collecting Early
The earliest you can start Social Security benefits is age 62. However, just because you can start benefits does not mean that you should.
Your monthly Social Security paycheck increases significantly for every month and year you delay starting, up until your full retirement age (around age 67). Depending on your work history, waiting to start Social Security can mean something like $100,000 or more in additional money over your lifetime.
So, if you are planning on an early retirement, it is best to do so without starting Social Security.
Start Planning Your Early Retirement…
#8: Retire Early if You Are Ready to Simplify
Living more frugally is not a necessity in retirement, but if you think that you can simplify your spending, then you can probably retire at 62 or earlier if you really want to.
When you retire, you have the opportunity to prioritize what is important to you and let the rest slip away. Prioritization can help you reduce your spending levels. And, this can be incredibly freeing.
#9: Retire Early if You Have a Plan for Health Insurance
When you retire at 62, there are still 3 years left to wait before you’ll qualify for Medicare unless you qualify for disability. You’ll need medical coverage to see you through until you turn 65.
Being healthy doesn’t mean it’s OK to go without health coverage. If you can obtain a private policy to bridge the gap, then you’re all set. If not, you might want to wait a bit longer to retire.
Here are a few ideas for how to afford healthcare before Medicare eligibility.
#10: Retire Early if You’re Debt Free (or Almost)
Probably the biggest indicator that it’s really ok to retire early is that your debts are paid off, or they’re very close to it. Debt-free living, financial freedom, or whichever way you choose to refer it, means you’ve fulfilled all or most of your obligations, and you’ll be under much less strain in the years ahead.
If you’re debt free and your retirement income is in line, there’s little reason to continue working if you don’t want to. This is the time of life that you’ve worked hard to reach. So go out there and enjoy it.
NewRetirement’s Planner is an easy way to help you decide whether you can retire early. It only takes a few minutes, and what you’ll learn can help you chart your new course.
#11: Retire Early: Time is More Important than Money
By retiring early, individuals reclaim their most precious resource, enabling them to devote it to pursuits that align with their passions, values, and personal growth. Rather than being tethered to a demanding career, early retirees have the freedom to explore new interests, spend quality time with loved ones, and prioritize experiences that enrich their lives.
However, embracing this philosophy requires a fundamental shift in mindset. Early retirees understand that true wealth lies not just in financial assets but in the freedom to live life on their own terms. This may entail making intentional trade-offs, such as opting for a simpler lifestyle or prioritizing experiences over material possessions. By reframing the concept of wealth to encompass time, early retirees find fulfillment in moments of connection, creativity, and personal fulfillment. Ultimately, by recognizing that time is the most precious commodity, individuals can embark on a path towards early retirement that prioritizes meaningful living over the accumulation of wealth.
#12: Retire Early if You Suspect You Have Saved Too Much
Surprisingly, it’s possible to over-prepare for retirement, accumulating more savings than you’ll realistically need. If you find yourself in this fortunate position (you probably know who you are), early retirement might be a compelling option. Rather than continuing to accumulate wealth unnecessarily, retiring early allows you to start enjoying the fruits of your labor and experiencing life on your terms.
By retiring ahead of schedule, you can escape the rat race and dedicate your time to pursuits that bring you joy and fulfillment. Embrace your abundance. Create a retirement that’s not only financially secure but also rich in meaning and purpose.
