Family Wealth blog

Early Retirement: Too Soon?

A toddler sits in a toy rocking chair, smiling. The title reads "Early Retirement: Too Soon?"

Spring is in the air—well, almost. For many, this is when thoughts turn to getting outside and truly enjoying life, maybe traveling or just getting more active outside. And for some who are within a few years of traditional retirement age and believe they’re in a comfortable spot financially, thoughts can drift to “Why wait?”

Yes, retiring early is a dream for many people, but it’s not always the best choice when it comes to financial planning. Before you retire, it’s important to consider the pros and cons and determine if it’s truly the best decision for you. Here are some things to consider, especially if you’re still 60 or younger.

First, The Good News

More Time for Hobbies and Travel

Early retirement can provide more time—and likely more time in better health—to pursue lifelong passions such as travel, sports, or other hobbies. Those picturesque villages in Europe can have some pretty sleep streets. Nothing personal, but none of us are getting any younger!

Friends and Family

One of the best perks of being comfortable financially is the extra time it provides for spending time with family and friends. Retiring early means you’d have even more of that time and have more flexibility for planning dinners and other events that you’ve always liked to do.

Less Stress

Retiring early can dramatically reduce the stress that comes from the complex demands of work life. Not only would retirement free you from those concerns, but the free time could be used for other activities that would further reduce stress.

Not So Fast (The Cons)

If only early retirement were so easy and a so-called “no brainer,” who wouldn’t want to retire decades early? Well, some people who read these drawbacks to retiring sooner than later will decide to wait before hanging up their cleats.

Reduced Social Security Benefits

If the work requirements are met, most people are eligible for Social Security benefits starting at age 62. However, the longer you wait to start claiming benefits, the greater your payments will be throughout the rest of your retirement.2 And if you wait until age 67 or even as late as 72, the impact to your retirement finances could be substantial. This is complex stuff, though, so make sure to consult with your financial advisor and tax professional about this.

Increased Healthcare Costs

Unfortunately, healthcare costs tend to increase—and add up—as we age, especially during retirement years. If your plans include funding healthcare needs via Medicare, you would likely have to continue paying for private insurance longer until you became eligible for it.

Reduced Earnings and Savings

While sleeping in (or getting up early to do something you love) sounds enticing, retiring early would also mean no more paychecks. Without further income, your savings would need to stretch those extra years to cover expenses throughout your retirement.

Increased Risk of Running Out of Money

That last point leads directly to this one: the less money you have for savings and investments when you retire, the greater the risk of running out of money later in life. If this possibility scares you, you’re not alone. A recent study revealed that 56 percent of Americans age 65 or older were afraid they would run through their retirement savings while they were, well, still in retirement.2

The Takeaway

The dream of retiring early is a common one, especially for those who think they have the means to do it. But, as with anything, there are risks and rewards. This is such an important decision—at any age—that you should definitely consider talking this over with your financial advisor. Since they should have the big picture about your investments, assets, and financial goals, they can expand on the pros and cons discussed above. And, if they’re worth their salt as advisors, they should also know a decent amount about what you want out of life and your retirement years, whenever they start.




Disclosure: This information is for educational and informative purposes and shall not be considered a specific recommendation. Readers are advised to speak with their advisor at JL Bainbridge to determine their specific recommendations that meet their investment objectives and to review their portfolios. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections without notice. J.L. Bainbridge & Co., Inc., is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at and

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