Should You Take Early Retirement? Pros and Cons
If you’ve spent your working life in a job, you love you may have had the time of your life. But even good things get tedious at times, so you may be considering taking early retirement to pursue new horizons. Quitting the rat race is a big decision, so what do you need to consider before taking the final step?
The biggest consideration when deciding to give up work is finances. When you no longer rely on working for money, you become financially independent. To achieve this, you should start preparing financially many years before the intended retirement date. Ensure you have paid off all debts. Debt will eat into income and, if not paid off straight away, will incur interest that can mount up over time.
Paying off the mortgage should be a priority if you want to take early retirement. If you borrowed a substantial amount to buy a house, then mortgage payments take up the majority of monthly outgoings; eliminating it, or reducing it, will allow you more income to cover other expenses.
You will likely have been a regular saver if you want to shorten your working days. Saving enough money to retire early takes discipline and determination. You should be willing to forgo certain activities and holidays; you should also cut down spending on household items, cars, and other large purchases. You should research the best saving plans and pensions. Investing in a pension will enable you to save more as you can’t usually access the money until you’re 55, making it a great option if you feel you may be tempted to dip into the fund.
Generally, there are two types of pension; workplace and personal. If you work for an employer and plan on staying there, you’ll benefit from the company’s contributions. Typically an employer will contribute 5-10% of your annual salary to a pension scheme.
If you’re self-employed or freelance, you will need to find a suitable personal pension. There are loads of options that offer flexibility, so be sure to compare to find the right option for you. Consider opening a tax-free savings account.
If you’ve made the firm decision to retire early, it’s a good idea to make an appointment with a financial advisor. They can help you divide up your assets and create a financial budget, so you have a clear view of how much you have available to pay for day-to-day expenses and what’s left for travel, hobbies, and other things. This way, you won’t run out of money too early and will have the peace of mind that you have what you need.
Are you suffering from a challenging health condition or struggling with the inevitable aches and pains from getting older? This may be motivating you to consider early retirement, and if your finances allow, you could start investigating options.
Dealing with bad health is never easy, but if you search for assisted living in Houston Texas, you’ll find that Belmont Village offers a variety of options for seniors who want to retain independence but still have access to care facilities and medical assistance if needed.
Retiring early can provide a plethora of benefits for your health. The option to sleep more, spend time outside, and enjoy a more relaxed pace of life will help you develop healthier habits. Less stress means a calmer mind, and positive well-being helps keep illness away and strengthens the immune system.
It’s important to remember that for some people, early retirement might not be the best route. The lack of structure can take some getting used to, and it’s easy to fall into bad habits. Failing to stay active can result in reduced mobility and cognitive impairment, so it’s vital to develop a positive routine of activity, exercise, and social engagement.
If you’re financially secure, retirement is the only time in life when you can truly relax and slow down; however, if you thrive on being busy, use the time as an opportunity to pursue some of the things you’ve always wanted to do, but didn’t have the time.
Have you always wanted to learn an instrument? Why not check out some local courses and enroll. Pursuing a hobby is a great way to keep the mind active, learn something new and connect with the community. It’s never too late to meet new friends, and meeting like-minded people will help keep the mind engaged.
Retirement provides the perfect opportunity to travel. Gone are the days when you had specific holidays and were bound by time. Now you can jet off where you like and when you like. If you have budgeted well and have a clear idea of how much you can allocate to holidays, why not start planning some trips? If you’re retiring at an earlier age, and you enjoy good health, there’s no reason not to make some travel dreams come true. You could even join solo holidays for the over 50s if you don’t have a partner or are lacking a travel buddy.
You’ve probably heard the famous biblical line ‘there’s more happiness in giving than receiving’; it’s true, and retirement opens up the opportunity to help others and give support when needed. If you have children or relatives that are busy working and need some help, why not offer your services. If you enjoy DIY, why not help out with a project or some decorating? Family members will appreciate the extra pair of hands, and you will have the satisfaction that comes with helping others.
If you have grandchildren, taking early retirement is a great way of freeing up the day so you can help with childcare duties and spend extra time with them. Grandchildren grow fast, so taking them out for days, playing with them, and enjoying their company will allow you time to make precious memories you, and they can treasure in years to come.
Retirement can take a while to get used to, and it’s important to emotionally prepare yourself, but with a positive attitude, it can be a time of opportunity and happiness and activity.