Four Downsides of Early Retirement That No One Talks About
Taking retirement early in life might seem to be a great thing. But would it be the right choice? Quitting from your workplace before you step into your 60s can prove to be disadvantageous in the long run and might pose mental as well as financial challenges that you might not be able to overcome. Thus, your entire retirement might become a rough ride if you don’t take ample preparations before time. Don’t submit your notice in haste. Keep the following four major disadvantages in mind before you become too excited to retire.
Healthcare Might Be Too Big A Challenge To Handle
Healthcare in your period of retirement can burn a hole in your pocket as Medicare doesn’t tend to cover many aspects. You will be entitled to Medicare if you have attained the age of 65, and in case you are an early retiree, try to imagine how much you would have to shell out for your healthcare. You simply can’t do without a health insurance plan since you will soon find yourself in a financial quagmire. Seek out a plan that would provide coverage suitable for your pocket. Aside from that, you need to have ample savings under your belt in order to cover the costs during your retirement.
Your Retirement Funds Might Be Beyond Your Reach
When you are saving to ensure a comfortable retirement, you can put your money aside in a 401(k) provided by your employer or in that case, an IRA, since you can get tax advantages if you invest in these retirement accounts. Now, if you want to opt for early retirement, you could very well be in a fix. If you want to withdraw your money from a 401(k) or an IRA before you are 59 and a half, you might have to shell out a penalty of 10%. If you don’t want to lose out on government help that comes with your retirement savings, it is advisable to continue working until you turn 59 and a half.
You Need To Ensure That Your Savings Last Longer Than Usual
If you are aiming to retire before 65, you wouldn’t have much time to save money before you go into retirement. Moreover, you have to keep withdrawing your savings for a much longer time. If you start withdrawing money at an early stage, your investment accounts will soon be depleted of cash. This will pose a huge problem because you wouldn’t have control over your savings in the early phases of retirement. If you shell out cash at the drop of a hat after you take early retirement, you would have little cash in your hand when you encounter any health hazard. In all probability, you will be dispensing huge bucks for your healthcare as well as long-term care.
You Could Miss Out On The Benefits Of Social Security
If you are making plans to take early retirement, you are bound to claim on the benefits that Social Security provides. In case you retire before the FRA or the Full Retirement Age, you will be liable to reduced benefits as compared to those who retire between 62 and 65. A 32% reduction will surely bother you as time goes by. Aside from that, survivors benefits will also be not as per your satisfaction.
Look before you leap. Wait until your actual retirement age arrives. Even if you do decide to quit your job much before you should, keep your eyes open and make proper plans to deal with the disadvantages and ward off the downsides.
More in Retirement
Everything You Need To Know About “Jumbo” Home Loans
If you are on the lookout for a pricey property, you may consider applying for a jumbo loan. This will grant you a...July 20, 2019
An Overview Of OffShore Banking
We usually associate offshore banking with snooty, financially successful individuals who have millions to their name. Contrary to popular belief, even...July 17, 2019
What You Didn’t Know About Germany’s Wealthiest Siblings
Meet the siblings who happen to be the wealthiest people in Germany as of June 2019. Born to Herbert and Johanna...July 15, 2019
Game of Thrones Fans Rejoice! Here’s Everything You Need To Know About The Prequel!
It has been more than 8 years since HBO brought to life the beloved epic fantasy, Game of Thrones which took over the world...July 14, 2019
Four Tips On How To Avail The Absolute Best Interest Rates
It’s a good thing that loan rates have decreased drastically. This, indeed, is a great piece of news for people who are on...July 11, 2019
Here’s How You Can Shut Down Your Account With These Big Banks
You might be aware of the fact that big banks follow different ways of dealing with their clients. The initial phases...July 9, 2019
Five Reasons Why You Are More Confident & Happy Post-Retirement
Aging is scary to most people. After all, you will be losing your good looks and youth, your hair will be turning...July 8, 2019
Meet The Lovely Women Who Played The Role Of Ariel In Disney’s The Little Mermaid!
The Little Mermaid has caught everyone’s fancy every time it hit the big as well as the small screen. Recently, Disney decided...July 7, 2019
The Battle of Luxury Brands: The Top Eight Brands With The Highest Sales Around The World!
Affluent people all over the world purchase only the most luxurious of luxury goods to show off their wealth and enviable...July 4, 2019