Weighing the Cost of Early Retirement

You can picture it now. You’re reclining on a beach, the sun smiling warmly upon you, a cold margarita in your hand. There’s no boss to answer to, and nowhere to be but here. Jimmy Buffett would be proud. What is this glorious place? Why, the world of your retirement, of course.

If you’ve made enough money to sustain your lifestyle through old age, early retirement is at least worth considering. After all, everyone loves the idea of freedom. Most grandparents would jump at the chance to spend more free time with their grandchildren. Retirees can go anywhere they please without having to take vacation days from their job.

Most folks can immediately think of a million advantages to clocking out early, but the disadvantages might be harder to conjure. Said disadvantages aren’t exactly the most pleasant of topics, but are still an important one. Here’s a scenario to think about. Say you’ve planned out all your finances to sustain you through age 90, but at age 75, a medical emergency arises and your insurance refuses to cover it. Suddenly, your cash cache has dwindled to the point that it may only last you for another couple of years. In the words of Scooby Doo, “ruh roh.” Along a similar vein, what happens if your stocks plummet? If much of your savings is tied up in the market, a crash or even a dip can severely impact your quality of life. If you had stayed in the workforce for another decade or two, you likely would have made enough money to deflect worry in these situations.

Something that many people don’t imagine is the possibility that they may miss work. All creatures, including humans, have evolved to desire productivity. If you do nothing but sit by the pool and eat bonbons every day, you may feel your life satisfaction level slipping.

Every human deserves a nice break at the end of his or her working years. But the decision to take that break early should be carefully weighed.

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