Advantages and Disadvantages of Retiring Early

Couple having a video call on their laptop stock photo
vorDa /

Most people dream about retirement from about the first week after they enter the workforce. When you spend all your time working now, you want to know it will benefit you later. Whether that is through social security benefits or other retirement savings you have stored away, there are many factors that affect the timeline as to when you can permanently punch out. At age 65 you are considered to be ripe for retirement, but what would it look like if you opted for early retirement?

Is There a Downside To Retiring Early? 

If you are considering retiring early, which for Americans means before the age of 65, you are not alone. Without just simply cutting back and working less, keep in mind that there could be certain disadvantages of early retirement. Above all, know that, no matter what your retirement goals are, what you have saved up for retirement will essentially have to last you the rest of your life.

Are You Retirement Ready?

For example, even if you have the good fortune to be able to afford to retire at the age of 59, you may still want to reconsider if you don’t yet how you’ll want to spend your time, sort out insurance or even just decompress from working every day. There are early retirement benefits for sure, but there are also early retirement drawbacks. 

Pros and Cons of Early Retirement

Here is a look at some pros and cons of retiring early.

Pros Cons
Time for travel Less in Social Security benefits
Potential new career No employer-sponsored health insurance
Health benefits Health issues

Early Retirement Pros 

The advantages of retiring early may seem straightforward, but just because something seems ideal does not always make it practical or even probable. However, there is no way around wanting all that early retirement has to offer which can include the following:

  • See the world: If your retirement plans include visiting new places and seeing distant lands, you will have ample time to do so. This can even include time with family and friends that live far away. Though you’ll have the time, make sure you have the money as trips will be expensive and you’ll need to fine-tune the budget your fixed income allows.
  • Start a passion project: If you have always wanted a different career but never thought it made sense, you can try a new job upon retirement without a lot of added pressure, plus the bonus of more income. 
  • Health benefits: When your time is your own, you can get plenty of rest, eat balanced meals at a leisurely pace, be more physically active and even get outside for some naturally administered Vitamin D. It can also be good for your blood pressure by reducing your stress levels, especially if you worked in a high-pressure environment. 
Are You Retirement Ready?

Early Retirement Cons 

The disadvantages of retiring early may surprise you. Though some are intuitive such as making sure you have the right financial plan, others are sneaky such as reported effects on your physical health and life expectancy. If you are looking to stop working before you reach full retirement age, here are some early retirement cons to consider:

  • Smaller Social Security cushion: Retiring early means there was less time for you to pay into your Social Security out of your paycheck. In other words, the sooner you start to take Social Security, the lower the benefits will be from which to pull. 
  • Out-of-pocket health insurance: Medicare does not kick in until the age of 65, so if you retire early, you will have to pay for your own health insurance. This can be quite an added expense especially if you are used to having employer-sponsored health care. 
  • Health deterioration: Not having the stimulus of work can sometimes lead to declines in both mental health and physical mobility. There can also be a loss of social connection or purpose which can lead to depression. 

Final Take

There is no way around the notion of retiring early sounding ideal. If you are someone in a position where this seems like it may be an option, be sure to weigh the advantages and disadvantages of retiring early. Though you will need to have enough money put away or invested in your retirement, early retirement is not just about finances. It is about what is best for the mental and physical health of you and your family. 

Are You Retirement Ready?

It may also be worth calculating your time to retirement with a financial advisor just to see where you stand. Retirement isn’t just about leaving work, but also about living your life, so make sure you are factoring in all the areas of your life that will be affected by early retirement.


Here are the answers to some of the most frequently asked questions regarding early retirement.
  • What is the healthiest age to retire?
    • The healthiest age to retire ultimately is on a case-by-case basis. Though some experts say retiring in your 40s is healthy, that may not be feasible for those with lower income or fewer retirement options in place.
  • Is it beneficial to retire early?
    • Though there are both pros and cons to retiring early, there are many benefits including health benefits such as better sleeping and eating habits, as well as more time to be physically active. You can also travel more and or even start a side hustle you are passionate about.
  • Is retiring at 55 realistic?
    • Retiring early, especially 10 years before the full retirement age of 65, is not impossible but there are several questions you should ask yourself or a financial consultant:
      • -Can you afford out-of-pocket health insurance for 10 years before Medicare kicks in?
      • -Do you have enough in your savings or investment portfolio to last you the rest of your life without having to work again?
      • -Are you comfortable with having lower Social Security benefits?

Are You Retirement Ready?

About the Author

Caitlyn Moorhead has written content for a variety of businesses and publications. After graduating from Central Michigan University cum laude, she moved to New York City where she wrote columns, articles and plays for several years before relocating to Austin, Texas in the fall of 2020.
Learn More


See Today's Best
Banking Offers