Most people retire during their 60s. To retire earlier than that requires planning, discipline and paying close attention to your savings and investments. But the sacrifices and extra effort are worth the trouble. Early retirement planning makes you rethink what brings you happiness and life satisfaction outside of your career and improves your financial footing. Here are eight reasons to pursue early retirement:
Address the future today. Many Americans are unprepared for retirement and may need to continue working during their 60s and beyond. A primary reason for being unprepared is a lack of planning and saving in their younger years. By setting a goal to retire early, you begin to analyze your finances and design and implement a plan to get there. The sooner you begin planning and making serious efforts to secure your retirement future, the greater your chances of achieving it. Analyzing your current financial situation and creating a plan is good at any stage of your life, but preparing for retirement gets more difficult the longer you wait to start saving.
[Read: 5 Challenges of Early Retirement.]
Increase income. Once you decide on an early retirement goal, you'll quickly realize there's a good chance you won't be able to do it without spending sacrifices or extra income. Sacrifices are hard to adjust to, so many people prefer to accelerate their retirement savings. Planning for early retirement motivates workers to excel at their current job to receive promotions and raises. Some savers also seek out ways to earn money beyond their primary source of income. Extra income ideas can include a second job, side business or real estate investing.
Circumstances may require you to retire early. Not everybody retires in their desired fashion. At some point, you may not be able to work. However, when you prepare your life and finances to be able to retire early, you'll also be better off in the case that you are forced to retire early. For example, during the recession in 2008, some older workers retired due to job loss and difficulty finding work in a pool of younger workers. Health ailments can also sideline a career, especially for workers in professions that require physical activity. Pursuing early retirement can reduce the hardship if your working years are cut short for reasons outside of your control.
Improve your relationships. Early retirees have more opportunities to spend time with people they care about. By achieving early retirement status, social activities can become priorities in your life instead of a slice of your calendar. Your spouse and family will also benefit from the added time you have to enjoy each other's company. That's not to say you can't have strong relationships while you work full-time, but early retirement gives you more time to dedicate to family members. Another benefit is the ability to be available to friends and family who need help. Freedom from work requirements allows you to serve others in need, which is far more gratifying than writing status reports.
[Read: The New Target Retirement Age: 66.]
Travel. Vacations from work are rarely long enough. Travel is best when it's unrestricted by time. Early retirement allows for extended travel, which is difficult to schedule when you're employed full-time. It also helps to prevent age from being a limiting factor in your travel decisions. Plan a month or two in an intriguing city, volunteer in a recent disaster region or travel by land through multiple countries. When your time allotments are less restricted, the opportunities to explore are more abundant. Extended visits will make you appreciate each destination more thoroughly than a quick tour stop.
Prioritize your health. Commuting, work travel and firm time commitments are consequences of a full-time career. When you're working full-time, exercise tends to be secondary to the rest of your daily responsibilities. Sitting most of the day in a chair is inherently unhealthy, while the constant temptation of office treats is a detriment to healthy eating decisions. Good health is perhaps our most important asset. When you retire early, you can prioritize your health while you're still relatively young, allowing you to improve your overall well-being and potentially extend your longevity.
Lower consumption and spending. One of the most effective strategies for retiring early is lowering your annual cost of living. A lower cost of living requires a smaller retirement nest egg, enabling you to stop full-time work earlier. A secondary benefit of reducing your costs is becoming more conscious of your consumption and spending decisions. Smarter consumption habits are better for your pocketbook and reduce your global footprint.
[Read: How to Retire in 2018.]
Failure isn't a bad outcome. Even if you fail to reach an accelerated early retirement goal, you'll be better off than if you didn't attempt to pursue it at all. Setting an early retirement goal will motivate you to spend more intentionally, earn more, invest more, consume less and pay closer attention to your finances. These are all good habits whether you can leave the workforce early or not.
Craig Stephens is a blogger at Retire Before Dad.
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