Many of us look forward to our retirements, when we might finally do some things we've been dreaming of -- such as taking long vacations in Europe, driving cross-country to visit friends and check out small-town diners, or simply playing a lot of golf or doing a lot of gardening. It can be hard to figure out just when to retire, though.

An early retirement is certainly appealing, but is it right, or possible, for you? Here are some reasons to retire early, as well as some reasons to retire on time or even late. Let's start with the latter.

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Image source: Getty Images.

7 Reasons to not retire early

There are plenty of good reasons to not retire early -- such as if you own your own business, you're enjoying your work, and the company needs you in order to grow over the coming decade or so. Super investor Warren Buffett, for example, is turning 90 this summer and is still "tap-dancing to work," as he's put it. Here are six more reasons to not retire early.

You might get bored

Many people find themselves bored or restless in retirement, without the structure and socializing that their jobs provided -- and which they didn't appreciate at the time. Think about how busy you'll likely be in retirement, and how well you will do with miles and miles of unstructured days.

You may have to live with less income

It's likely that you'll be living on less income in retirement than you're living on now. Take some time to jot down your expected expenses and expected income, and see how feasible retiring early is.

Understand that with less income, you may have less flexibility to spend on things you want to. Make sure you'll have enough cash or resources to deal with unexpected expenses such as a costly car repair or medical setback.

You might run out of money

Think about how long you're likely to live. Few of us can really know, but if most of your relatives have lived well into your 90s, and you're healthy, you stand a good chance of doing so, too. Retiring at, say, 60, might mean 35 or more years of retirement. Can your nest egg support you that long?

Some early withdrawals can trigger penalties

If you're thinking of funding an early retirement with some early withdrawals from retirement accounts such as 401(k)s or IRAs, note that withdrawals before age 59 1/2 often trigger 10% early withdrawal penalties. You might want to look for other income sources until age 59 1/2.

Smaller Social Security checks

Those of us entitled to Social Security benefits can start collecting them as early as age 62 and as late as age 70. We won't get our "full" benefits, though, unless we retire at our "full retirement age" -- which is 66 or 67 for most of us. Start collecting earlier than that, and you'll get smaller checks.

Specifically, those with a full retirement age of 67 who start collecting at age 62 will receive checks about 30% smaller. It's not as bad as it seems, though, because you'll get many more checks if you start collecting early. Still, waiting until 67 or even 70 is a smart move for many people. Read up on the topic and see what's best for you.

Uncertain healthcare costs

Finally, consider healthcare costs. There's no way to know just how much you'll spend on healthcare in retirement, but it's likely to be a lot, and likely to be more than you expected.

For example, a Vanguard report estimated in 2018 that a 65-year-old woman would spend, on average, about $5,200 annually on healthcare in retirement (assuming the purchase of Medicare Supplemental Plan F and a standard prescription drug plan).

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Image source: Getty Images.

7 Reasons to retire early

Just as there are lots of reasons why you might not want to retire early, there are also some solid reasons to consider doing so -- such as if your spouse is retiring early and you want to spend maximum time together. Here are six other good reasons to consider.

You can afford to do so

Perhaps the biggest reason to consider retiring early is if you can afford to do so. You'll probably have to spend a little time reviewing your financial condition to determine how much money you need to retire with, and whether you have it. It's smart to estimate how much income you'll need in retirement and proceed from there.

As you plan, remember that you'll have some Social Security benefits in retirement, and perhaps income from dividend-paying stocks and/or an annuity -- and that you'll need to have a lot in reserve for healthcare expenses.

To help determine how big a nest egg you need in order to generate the income you want, you might use the old "4% rule" of thumb (that's not perfect for everyone in every situation). It suggests that in your first year of retirement, you withdraw 4% of your nest egg, and then adjust for inflation in subsequent years.

Here's the kind of initial income various nest eggs will generate with that rule:

Nest Egg

4% First-Year Withdrawal













$1 million


Source: Author calculations.

If you think you'll need $60,000 annually in retirement and you're expecting $25,000 from Social Security and $10,000 from an annuity, that leaves $25,000 in income needed. If you have a nest egg of about $600,000, you may be much closer to being able to retire than you thought.

You can still work in retirement

Keep in mind that you can still work some in retirement, at least in the first few years, which might help make an early retirement possible.

For example, if you simply get a job at a local business, working 12 hours per week for $15 per hour, that's $180 per week pre-tax, or a little more than $9,000 per year. If that doesn't sound appealing, there are gobs of side gigs you could consider, such as tutoring kids, making and selling crafts, doing some freelance work, or even driving for a ride-sharing service. Working a little in your early retirement years can help you avoid making early withdrawals from retirement accounts and/or starting to collect Social Security early.

You hate your job

If you can't stand your boss and/or your job, you may want to look into retiring early -- or, if you're still fairly young, to look for a better job.

It's best to not just stay at that job suffering, as studies have shown that toxic workplaces can damage workers' health -- and even shorten lives. Stanford business professor Jeffrey Pfeffer has estimated that work is Americans' fifth leading cause of death, and he and several colleagues found that, "Workplace stress -- such as long hours, job insecurity and lack of work-life balance -- contributes to at least 120,000 deaths each year and accounts for up to $190 billion in healthcare costs," according to a Stanford report.

You can enjoy a more active retirement

Retiring early offers the opportunity for a more active and enjoyable retirement -- because you'll be younger as you embark on it. Younger retirees can travel more extensively and engage in more vigorous recreational activities, such as hiking, biking, tennis, and more. Many people don't retire until declining health forces them to, and at that point, lots of things they may have wanted to do are no longer possible.

You can reduce regrets

Many people in retirement regret having devoted so much time and energy to their work and not enough to their loved ones. By retiring early, you'll have more time for children and grandchildren, not to mention your significant other. By making more good memories together, you'll enrich all their lives.


This last reason isn't meant to be morbid, only live once. You don't know how long you'll be around, so it can be good to stop working once you're financially able to do so, in order to do things you really want to do -- whether that's spending more time with family, or trying to launch a small business idea you have or tackling a project you've long dreamed of, such as building your own boat.

What to do

Everyone's situation is different, so consider the factors above and come to your own conclusion about whether you want to retire early, and if you can afford to. A little more reading and thinking could yield some creative ways to make it happen sooner, such as renting out a room in your home, or relocating to a less costly house or part of the country.