early retirement

Pros and cons of early retirement

Some people find themselves in the position where they can choose to retire early. Whether to actually take early retirement is a very personal decision, but there are some major pros and cons worth considering.


  • More time for travel and leisure

Perhaps you’ve worked hard for years and haven’t taken as much time for travel and other leisurely pursuits as you could have. Early retirement may give you the opportunity to catch up on some of what you’ve missed during your career. What’s more, chances are if you retire early, you’re still in pretty good health so you can go on trips and adventures that might not be feasible later in your 70s and 80s.

  • You can devote yourself to a cause you care about

Early retirement does not have to mean you stop working altogether. Rather, you decide to leave a job that pays you a salary and devote your time to charitable endeavours. This has the upside of keeping you busy and engaged with the world while also working towards a larger purpose.

  • Your stress levels may decrease

If your job comes with high levels of stress on a daily basis, early retirement could restore a sense of calm to your life. As one author points out, leaving the working world can mean saying goodbye to day- to-day stressors such as commuting to and from your place of employment.


  • Your savings will have to last longer

The earlier you retire, the less money you can earn working to save for retirement. This is a pretty clear trade-off. Unless money is no issue for you at all, you will likely have to spend somewhat less per year if you stop working before most people enter retirement.

  • It might be bad for your health

Studies seem to be conflicted on this point, but there is at least some research to suggest that retirement leads to poorer mental and physical health. As a result, retiring early may logically accelerate these issues.

  • You may be bored

This is certainly not true for everyone, but one potential downside of retiring early is simply that you`ll be bored. Your career may provide you with ongoing mental and social stimulation, and removing that from your life might mean that you’re going to sit at home with too much free time on your hands.


A lot depends on your personality

There are good reasons for and against early retirement. If you are contemplating leaving the working world for good, it may be a good idea to think about whether your personality is suited to all the free time you will suddenly have. Are you the type of person who can easily fill your days with other tasks and pursuits, or might you just watch television and read the newspaper all day long? Whether you’re the former or the latter could be the difference between having a great early retirement or wishing you were back at work.

There is a middle ground

Retirement doesn’t have to be an all or nothing proposition. In other words, if you’re, say, 60 years old and want to take more time for yourself, you may want to think about working a bit less, rather than retiring outright. This can be an attractive option, as it keeps you earning some money and maintaining the social benefits of work, while also allowing for more travel and leisure time.







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Andrew Hepburn is a freelance writer based in Toronto who specializes in financial issues. He's written for Maclean's, Canadian Business, MoneySense, Morningstar and T.E. Wealth, among others.