Is Early Retirement an Option for You?

Authored By: Community Financial Credit Union on 11/16/2021

Picture this: It’s a Monday morning and you wake up naturally to the light coming through your window. It’s a Wednesday afternoon and you’re at home reading books to your grandchildren. It’s  Friday and you’re taking in the crisp fall air on a leisurely walk around your neighborhood. With early retirement, you can spend more time with family, enjoy your hobbies, and say goodbye to the 9-5 schedule with a permanent “stay-cation.”

However, early retirement isn’t one-size-fits-all. For many Americans, retiring early sounds like a pipedream. For others, it’s a medical necessity as health problems or family requirements take hold. Whatever the reason you may want to retire early, it’s important to get the facts and start planning early.

Let’s look at a few factors you should consider when deciding if early retirement is an option for you:

Medical Expenses

Affordable health insurance is one of the largest issues facing early retirees. The insurance gap between retirement and Medicare at age 65 can be expensive for those who don’t have retiree health insurance provided by their former employer. The best way to avoid this sticker-shock is to plan early! For some, insurance through the Affordable Care Act or similar government-based insurance programs can be a good choice. For others, it’s more cost effective to shop the private market. Either way, medical expenses should be one of your top priorities when budgeting for retirement. Check out for a preparation checklist, insurance deadlines, and compare medical insurance plans to find your best fit.

Earning Potential

For many, early retirement means getting out of their career path before even hitting their peak earning potential. Data suggests that the biggest salary jump across all levels of income earners actually doesn’t happen until you’re close to 40 years of age. If you’ve managed to save enough of your income to retire comfortably, this may not concern you. However, you may want to stick around the workforce for a couple extra years if you feel you haven’t had your best earning years yet.

Retirement Funds

Retiring early can mean a very different lifestyle than the one you’ve become accustomed to. Without the same level of income, and having to rely on 401(k) and other retirement income, life can end up looking like you’re back in college eating ramen and cutting coupons. When it comes to your retirement account, are you looking at a number that makes sense for your lifestyle (or the lifestyle you’re willing to have during your golden years)? The Bureau of Labor Statistics calculates that the average retiree spends over $48,000 per year during retirement. If your retirement savings doesn’t add up, maybe it’s time to put early retirement on the backburner and focus on building up your nest egg.

Personal Happiness

Early retirement can seem like a dream to some and a nightmare to others. If that seems strange, take a moment to think it through.

For some personality types, a traditional 9-5 workday brings purpose, fulfillment, and a dedicated space for creativity and growth. These individuals may find that early retirement gets rid of that drive to create and contribute, or they may flourish in retirement by picking up hobbies or volunteer work.

For others, the corporate world just doesn’t bring the same joy. These individuals may thrive on early retirement where they can focus on individualized pursuits, travel, or hobbies. However, they may also find that the lack of daily structure during retirement may turn into boredom and a stifling of creative energy.

Whichever side you fall in, considering your own personal happiness is an integral part of deciding when to retire and if early retirement is the right choice for you. On the fence? Take a week or two off of work and track your emotional happiness through that time. If you’re feeling antsy by the last few days, maybe it’s time to hold off on retirement planning.


Your Turn:  Have you or a loved one started planning for early retirement? Share your tips and tricks with us in the comments!

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