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3 Reasons You’ll Regret Retiring Early

Leaving the workforce at a relatively young age might seem like a good idea, but it could also backfire.

Maurie Backman

It’s estimated that 48% of Americans wind up retiring sooner than they’d like, whether due to health issues, layoffs, or other factors. On the other hand, some people specifically plan to retire early, whether because they hate their jobs, they want to travel, or they have adult children nearby who need their help with child care.

But while retiring early certainly has its advantages, there are also certain pitfalls you might encounter when going this route. In fact, you may end up sorely regretting that decision for these reasons.

Older man in sweater with serious expression, sitting on park bench.

Image source: Getty Images.

1. Lower Social Security benefits

Though retiring early doesn’t always mean claiming Social Security before full retirement age, the two often go hand in hand. But if you file for Social Security early, you’ll end up with a lower retirement benefit for life. And that could hurt you down the line, especially if your retirement savings don’t end up lasting as long as expected.

On the other hand, if you retire a bit later, you might snag a larger monthly Social Security benefit. And that additional money could come in very handy. You can use it to cover basic bills, buy entertainment, or pay for surprise home repairs or medical bills that pop up throughout your senior years.

2. Outrageous health insurance costs

If you wait until age 65 to retire, you’ll be eligible for health benefits under Medicare. Your costs under Medicare will depend on your annual income and the specific plan you choose (each Medicare Advantage or Part D drug plan comes with its own price tag), but you can bet on Medicare being cheaper than paying for private insurance.

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Even if you’re able to retain your employer’s insurance plan through COBRA, you’ll be on the hook for its full cost — not the subsidized cost you may have been paying during your employment. And the expense of health insurance alone could wreak instant havoc on your retirement budget.

Of course, Medicare is by no means free. But if you wait until you’re eligible for it to retire, your premium costs may be more manageable.

3. Boredom

Many people retire only to find that they’re overwhelmingly bored as a result of not having a job or set schedule. And if you leave the workforce early, you’ll have that many more years of having not enough to do.

Excessive boredom could put you at risk of depression, but it could also have financial consequences. You may, for example, find that you start spending extra money shopping in stores or online. On the other hand, if you wait until you’re a bit older to retire, there’s a good chance more of your friends will be ready to leave the workforce, as well, at which point you’ll have the option to meet up for low-cost activities like gardening, cooking classes, or even walks around the neighborhood.

Retiring early doesn’t always work out poorly. But if you’re not careful, you may end up bemoaning the fact that you didn’t work longer. Make sure to think through your decision carefully before pulling the trigger on retirement so you don’t wind up beating yourself up afterward.


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