While retiring early might sound like a fantastic plan, you’ll also want to keep some of these disadvantages in mind:
You’ll need a bigger retirement nest egg
The sooner you stop working, the more money you’ll need to have saved for your expenses. And if you’re contributing to a retirement plan through your job, you’ll also want to bear in mind that your total contributions will be less if you retire early. Additionally, some plans (such as 401k plans) may impose a penalty for early withdrawal. You’ll want to find out the specific terms and conditions of your plan before you make any final decisions.
Unless you already have healthcare benefits through your spouse’s employer, this is another cost you’ll have to budget for if you have plans to retire early. Because Medicare coverage doesn’t take effect until age 65, you’ll have to take care of medical expenses on your own, whether out-of-pocket or through your own healthcare insurance plan.
You’ll receive less in Social Security benefits
Social Security defines “full retirement age” as age 67, and for every year you postpone benefits, they increase an additional 8 percent until you reach age 70. However, some people prefer to just receive their benefits at age 62, but it won’t be in the full amount. Carefully consider if you’d rather retire early and receive less money, or if you need to postpone retirement and receive maximum benefits.
At Peachtree Financial Solutions, we want to help people accomplish their goals. If you have dreams of retiring early, you can take the first step at making those dreams a reality by contacting Peachtree Financial Solutions. We purchase structured settlement and annuity payments from people who would prefer to receive their money sooner, and some of our customers choose to receive their cash upfront so that they could retire early. If you are receiving long-term payments from a structured settlement or annuity, you may have the option of selling some or all of them and receiving cash now. Receiving a lump sum of cash now may be the solution to any possible financial hurdles that stand in your way of an early retirement. Contact us today to get started!
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.