Do you want to retire early? The following is a guest post by Donny Gamble Jr. Donny is an online entrepreneur, author, and runs investing blog Personalincome.org. If you’d like to submit a guest post on Money Q&A, please check out the site’s guest posting guidelines.
Early retirement has been a hot topic lately. It seems that the new goal of many is to retire early and live out their lives on a beach somewhere. While that dream sounds great, retiring early isn’t meant for everyone.
For starters, you have to be able to fund this dream of yours to retire early. With more than one-third of Americans not even saving for retirement, early retirement isn’t even an option for many. For those that can afford to retire early, do you really want to?
Pros and Cons to Retire Early
That’s right—there are some cons to retiring early that are important to think about before saying “So long!” to your job. But first, let’s start with the pros.
Pro: You don’t have to work anymore
This is why most people want to retire early. To no longer have to wake up at a certain time every day, report to a boss and attend pointless meetings day in and day out is what many people dream of. They don’t call it “work” for nothing, and with many people working for the weekend, retiring early would be an answered prayer.
Pro: You can pursue hobbies and interests
Finally, time to work on improving your golf score, renovating your home or starting that online business you’ve always wanted to. With work occupying 40 hours or more of your time each week, there’s little room leftover to put toward what you really enjoy.
Pro: You can start living life
Many people feel that work prevents them from living life—whether that’s spending more time with the grandkids or traveling the world. With work no longer in your way, you can start living life exactly how you please.
But early retirement isn’t all sunshine and roses. There are some huge downsides, too, that most people forget to think about when dreaming of life after work.
Why To Consider a 401k Rollover
Con: You no longer have a purpose
You might want to consider a 401k rollover. Whether you like to admit it or not, work gives you a purpose. It keeps you busy, it keeps you thinking and it keeps you socialized. Many who retire miss their days of chatting with coworkers in the break room, attending holiday work parties and feeling like they’re part of a group. When you do decide to retire, whether that’s on-time or early, make sure to fill the void by keeping busy with other hobbies and interests.
Con: Healthcare is now in your hands
You’re not covered by Medicare until the age of 65, so it’s your responsibility to find your own healthcare coverage until that point. With monthly premiums costing upwards of hundreds of dollars per month for an individual, this can greatly affect your decision to retire early, especially if you’re supporting a family.
Con: Your retirement savings have to last a longer period of time
If you retire at the average age of 65 and live until you’re 85, your retirement savings have to last 20 years. If you retire at age 55 and live until age 90, your savings have to last you 35 years. That’s a huge difference in quality of life. Plus, by putting off retirement, you’re able to contribute more money into your retirement plan.
What do you think? Do the pros to retire early outweigh the cons? Share in the comments below.
Donny Gamble Jr. is an online entrepreneur, author, and runs investing blog Personalincome.org. He also regular contributes to Huffington Post, Allbusiness.com, and SmallBizTrends. Follow him on Twitter @donnygabmlejr