The Benefits of an Early Retirement
Updated: May 19, 2022
About half of workers will not be able to retire by the age of 65, and that number keeps going up every year. Saving enough money to maintain your current lifestyle when you’re older just isn’t an option for many people, and even if they could save the money, they wouldn’t know what to do with it once they were retired.
The benefits of an early retirement can include more time with loved ones, more time for hobbies and socialising, as well as the benefit of avoiding both working life and the daily commute.
For these reasons, early retirement has become more and more popular. In this blog post, we’ll talk about some of the benefits of early retirement and why retiring as soon as possible might be just what you need to get the most out of life.
Living well is more important than working
Many people want to retire early because they feel like they’re living their lives in a way that makes them happy. With each passing year, it becomes more difficult to keep up with all our financial obligations and commitments.
But retirement doesn’t have to be about paying off debt; it can also be about pursuing other aspects of life.
It can be as simple as spending time doing things you love, such as traveling or reconnecting with friends and family. You can also use your free time to volunteer or give back to causes you believe in.
In fact, many experts believe that living well is more important than working – a mindset you should adopt as you start saving for retirement!
Having fun can be as easy as turning off your phone
A few years ago, I promised myself I would spend at least two months per year without working on anything related to my business.
When you own a business, fun becomes a foreign concept because your life is scheduled down to 10-minute intervals.
That's not a bad thing; it's just not very fun. So for me, turning off my phone and living in relative isolation with family and friends gets me back in touch with what really matters: spending time with people that matter most.
It also forces me to think about doing things I might otherwise never do—and often they are my favorite memories from those two months each year.
After all, where is work when you're sitting around a campfire roasting marshmallows?
Home should be where you enjoy being
Moving into a new home can be so much fun. You are getting to start fresh and create a place that's all yours, but moving in can be stressful, especially if you are moving into your first place.
If you want your move to go smoothly, do not wait until a few days before to get organized; instead, make sure you are prepared early on so you don't run into any problems along the way.
There is no need to let stress take over; instead, use these tips for making your move as easy as possible!
Don’t wait until you have money to do what you want
You might think that if you don’t have a certain amount of money saved up, you can’t do something. But that’s not always true.
Take vacations and weekend trips—if you use credit cards to rack up points or miles, chances are you can get a free trip without having to save up beforehand.
Or maybe there is a particular city or area you always wanted to visit but didn’t want to pay for your airfare—consider trying out one of those discount airline credit cards with big sign-up bonuses that allow you to make some travel dreams come true sooner rather than later.
There are real health benefits to early retirement
Evidence suggests that retiring early can reduce stress, decrease anxiety and depression, increase longevity, and lessen chronic disease risk.
Although many people are hesitant to stop working out of fear of losing purpose or identity, it's important to remember that your self-worth is more than a paycheck.
When you retire early, you’ll have time to do what you want with your days—whether that means spending time with family or traveling overseas.
Sure, there are some downsides to retirement (namely loneliness), but living a healthy lifestyle and maintaining a positive outlook can help alleviate many common fears.
You may also consider consulting with a financial advisor when planning for retirement; they can help you determine how much money is appropriate for your future needs and provide guidance on how best to save for it.
Early Retirement is good for the mind and body
Many who choose to retire early find themselves becoming healthier. Research has found that work can have a negative impact on your mental and physical health—even when you enjoy your job.
By spending more time on leisure activities, taking care of yourself, and doing things that make you happy, many retirees find their quality of life improving overall.
If you’re considering early retirement, it’s important to make sure that your pension finances are in order before making any major changes.
To help manage your financial situation after retiring, enroll in a good healthcare plan and make sure that you have sufficient coverage for emergencies and unpredictable life events.
Early Retirement - the bottom line
To retire as early as possible, you must be earning a higher annual income than your expenses. To do that, it’s important to keep investing and saving in your pension.
Income is key to retiring comfortably. Invest in whatever way you can while you’re young – stocks, bonds, real estate or business ventures – but always save at least 10 percent of your earnings for retirement.
Ideally, save 15-20 percent or more for retirement. Most importantly: Avoid lifestyle inflation! Live below your means so that when it comes time to quit working altogether and live off your investments, you don’t have to worry about money for decades down the road.
That will allow you to enjoy time with family and friends without worrying about how to make ends meet – or spend those extra years doing what you want instead of what you have to do.
Because let's face it, many people work well into their 60s and beyond because they feel they have to work; hopefully early retirement will free them up - and make their 40s even better - by freeing them from all financial stress.