Many people long for financial independence, financial freedom, and an escape from the boring 9 to 5 grind. One decent measure to know if financial independence is within your grasp is your ability to voluntarily choose early retirement without fears of going broke during retirement. Unfortunately, many people start out their careers with dreams to retire early; but then, life happens and they think that early retirement is a mirage.
Granted, early retirement means different things to different folks. For some people, retiring early means that you get to fire your boss between 50 and 55 years old. Others think leaving the labor market in your early 60s is a decent metric for early retirement. For U.S. employees, the Social Security system believes that retirement happens somewhere after your 65th birthday. Hence, if you retire before 65, we can still technically classify you as an early retiree.
1. Early retirement helps you enjoy your free time in good health.
No matter how much your love your job or how much your boss loves you, you'll eventually have to retire some day. You can retire honorably on your terms, you can have your boss show you the exit, and sometimes governments can send you back home through legislation. When you retire, you'll have a decent amount of money tucked away and more than enough time once the initial novelty of not waking up to an alarm wears off.
If you take an early retirement, you'll have more vigor to enjoy your retirement because aging wouldn't have taken its toll on your strength. You'll probably find it much easier to travel the world when you are 65 than when you are already 75 years old.
2. You could find other sources of income other than a regular 9-to-5 job
Many people would love to retire early but they are afraid to take the plunge because they are not sure they they'll have enough money during retirement. Finding creative ways to save for retirement can help you allay some of your financial fears and take a much-needed rest. Interestingly, an early retirement can open doors of opportunities to find other sources of income other than a regular 9-to-5 job.
For instance, if you work in a specialized field, you can set up an LLC, retire, and offer your services to your old employer as a private contractor to work at your own pace. In early retirement, you could also set up shop for consultant services in your industry. It might be disloyal to offer advisory services to the competitors of your current employers, but nothing stops you from having multiple clients as a consultant when you retire.
3. No one knows tomorrow
In the U.S., an average woman can expect to live until 86.6 years old and men on the average can expect to live until 84.3 years old. In reality however, you could survive long enough to see your 95th birthday and some folks can actually pass away before their 71st birthday. The point is that there's no foolproof way to know how long you'll live after retirement even though your health status can provide some insight.
Therefore, if you are in a strong financial position that allows you to take an early retirement, it makes sense to exit the workforce and enjoy your leisure. Some folks enjoy their work and the dignity of labor makes it worthwhile to be a contributing member of the society. However, if you are already fed up with your work, taking a early retirement might be a great way to infuse some life into your last days on heart instead of forcing yourself to the drudgery of your work every day.