Retirement, especially when approached from a life transition standpoint, has long been a tricky subject — and will remain so for generations to come.
But between what once was and what will be, the financial reality today points to this: if you can swing it, retiring early just may be the smartest move.
To be sure, stepping out of the workforce and onto the golf course the day you turn 62 can represent an inviting or intimidating prospect, depending on your point of view.
Don’t miss
Retirement anxiety can partially stem from thinking there’s not enough money to do it: the Federal Reserve’s 2022 Survey of Consumer Finances reported that just 54.4% of American families have a dedicated retirement account.
Yet, that doesn’t mean other factors — from a paid-off home to a lucrative family business — won’t have a positive impact. What’s more, numbers outside the bottom line should guide your decision as well.
Here we look at five of the best reasons to retire sooner rather than later.
1. Your home is already paid off
If you bought a home in January 1994 for $250,000, for example, that same home in 2024 might be worth nearly triple, according to data from the Federal Housing Finance Agency.
A $750,000 home without a mortgage means you have exactly that much in equity. Retirees can leverage equity by moving into a less expensive home — or renting an apartment while letting all the equity grow via investments.
A portfolio with an 8% return compounded annually will grow from $750,000 to more than $1.1 million in five years.
2. You have health concerns
Let’s face it: an eight-hour workday means spending more time with colleagues than your own family. In addition, life expectancy in the U.S. is dropping: 73.5 years for men and 79.3 years for women, according to 2023 figures from the U.S. Centers for Disease Control and Prevention.
At this point in life, time is a precious commodity. Health concerns can be a strong motivator to retire early — just ensure you have enough money set aside. Consider enrolling in a health savings account (HSA) to cover prescription costs and any possible surgeries.
3. You’ve invested wisely for years
Developing great financial habits — from spending less than you make to maintaining a diversified portfolio — are the products of discipline.
If you’re between the age of 60 and 64 and have put away $520,000, for example, this interactive chart from USAFacts.org shows that you’re in the upper 12% of American households.
Factor in Social Security and other revenue sources, and you may just find yourself set to retire now. But remember, the average monthly Social Security benefit for a retired worker is $1,909 (as of January 2024). So, that amount could be far less if you haven’t contributed to the plan for 35 years.
Read more: These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how
4. You’ve always wanted to travel more
When you retire early, you free yourself to buy adventures that become major sources of satisfaction and personal growth. Do it while you can — but be strategic about it.
Consider traveling on a budget by scheduling vacations during off-seasons when prices are lower and crowds disappear. You might also want to prioritize trips that require more physical exertion first (like hiking through the Scottish Highlands) when you’re still in your 50s versus your 70s.
Thomas Gilovich, a psychology professor at Cornell University, reached a powerful conclusion at the end of a 20-year study on wealth and lasting happiness: buy experiences, not things.
5. You’re already considering a half-retirement
If you find fulfillment, community and purpose in your career, consider going from 40 hours a week down to 20 hours. You just might find the work/life balance will free you up for other things you love — and the extra income for a few extra years won’t hurt, either.
Research from KornFerry shows that, post-pandemic, roughly one in four people aged 65 and older don’t plan to retire.
If you’re fortunate enough to work because you want to (and not because you have to) a partial retirement could allow you to have it both ways.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email [email protected] Follow our WhatsApp verified Channel
