By Amber McCartney
If you’ve been reading financial advice for some time, you’ve probably seen all the hype about early retirements. By retiring early, you don’t need to work anymore and can enjoy your golden years in peace, so what’s not to like?
Here we have an honest breakdown of the advantages of early retirement. Some of them can be disadvantages, in some contexts, so you must know what the advantages are while also knowing how you can avoid the downsides of them.
To retire, you need to have a goal in mind. Check out this calculator that you can use to figure out what you need for your early retirement. Once you have a figure to aim towards, saving for your retirement pot gets easier and you can track your progress to achieving it.
Two of the most valuable things we have are time and our health. If you’ve made it to early retirement, you’ve already saved yourself some time and, by doing so, you may have saved your health!
Early retirement can be good for your health. This depends on your own habits at home, of course. For some, retiring early can mean getting more sunshine on your skin, eating healthier, and tackling life at your own pace. All of that should do wonders for your mental health, too.
That said, early retirement can also loosen your standards and lead to negative habits. If you eat more unhealthy food and live a sedentary lifestyle, then maybe the office grind was doing you some good by introducing some movement into your life.
It’s all about potential. Early retirement gives you the potential to live your life as you desire. For many, that’s going to be a good thing, but you should use the new time you have to stay healthy to get the most out of it.
Now that you’ve got a lot of time and not so many obligations in your life, travel becomes a whole lot easier. With typical retirement ages increasing with every generation, early retirement is the best time to travel before it becomes too strenuous for you. With no job or work-related responsibilities weighing you down, your vacation period has gotten a lot bigger.
The potential downside here is that travel will eat into your savings, especially if you’re going on lavish vacations to every tourist hotspot on the globe. You’ve got to make your pension last, in which case you may be incentivized to cut back on spending.
Some people don’t stop working after retirement, especially when that retirement is early. Even when you’ve freed yourself from the 9 to 5, you may have hobbies or other skills that can keep your hands busy.
If you’re good at other activities, you may be able to monetize them too. That way, you can make your own money in your own time, without being chained to a boss. You could start a business and be your own boss if you have a good idea and the will to carry it out. Of course, some do join businesses and enter the workforce again, often in a new industry from the one they retired from.
Starting your own business doesn’t come cheap, even if it’s a small operation selling hobbyist items that you’ve made yourself. The Internet makes it easier and cheaper but, like with travel, you should keep in mind that you have savings that need to last. You don’t want to sink your retirement savings into a failed business venture and start from square one.
Maybe you just don’t want to work. That’s fine but most people need a hobby or activity that keeps them active and healthy, in both body and mind. You also need to socialize, which can be tough when many of your friends are based at your workplace, otherwise, you may become lonely.
If you stop exerting yourself completely, you’ll risk falling into those sedentary lifestyles we mentioned above. This harms your health and cuts away at your golden years, while working will keep you spry.
Those are the main advantages of having an early retirement, along with the potential downsides if you’re not careful. To finish off, here’s a note on health insurance and how this needs to be considered when preparing for early retirement.
The minimum age limit for Medicare is 65, so an early retirement means you’ll be under this figure and responsible for your own health and health bills. This is something to keep in mind when saving and living your early retirement, especially since the insurance rates get steeper as you get older. You’ll need some money set aside to pay your health insurance after you’ve passed 50.
Comments
No comments on this item Please log in to comment by clicking here