July 23


What’s the Deal with Early Retirement Age?

By Harrison O'Reill

July 23, 2023

Early retirement age is a topic that has gained significant attention in recent years, as more and more individuals seek to retire earlier than the traditional retirement age of 65.

While there is no one-size-fits-all answer to what constitutes early retirement age, it generally refers to retiring before the age of 60. This can be achieved through various means, such as saving aggressively, investing wisely, and reducing expenses.

For many people, the idea of retiring early is an attractive one, as it allows them to enjoy their retirement years while they are still relatively young and healthy.

However, early retirement also comes with its own set of challenges, such as the need to save more money in a shorter period of time, as well as the potential for a longer retirement period. As such, it is important to carefully consider the pros and cons of early retirement before making any decisions.

Retirement Planning

Retirement planning is an important part of personal finance. By understanding retirement age, Social Security and Medicare benefits, financial planning, retirement plans, and savings, you can ensure a comfortable and secure retirement.

General Benefits

Retirement planning is essential for everyone, regardless of their birth year. Early retirement can provide many benefits, including more time for leisure activities and the ability to travel.

However, it is important to plan for retirement to ensure a comfortable lifestyle and adequate income during retirement.

Retirement Age and Full Retirement Age

Retirement age and full retirement age are important factors to consider when planning for retirement. Retirement age is the age at which you can start receiving Social Security retirement benefits, while full retirement age is the age at which you can receive full Social Security retirement benefits.

Social Security and Medicare

Social Security and Medicare are two important benefits that retirees should consider. Social Security provides retirement benefits based on your work history, while Medicare provides health insurance for retirees. It is important to understand the eligibility requirements and benefits of both programs.

Retirement Plans and 401(k) Plans

Retirement plans, such as 401(k) plans, are an important part of retirement planning. These plans allow you to save money for retirement and often provide employer contributions. It is important to understand the benefits and limitations of these plans.

Individual Retirement Account (IRA), Roth IRA, and Traditional IRA

Individual Retirement Accounts (IRAs) are another option for retirement savings. There are two types of IRAs: Roth IRA and Traditional IRA. It is important to understand the differences between these accounts and to choose the one that best fits your needs.

Certified Financial Planner (CFP) and Financial Advisor

A Certified Financial Planner (CFP) or financial advisor can provide valuable guidance and advice for retirement planning. They can help you create a financial plan, choose the right retirement accounts, and make informed investment decisions.

Taking Benefits

When it comes to early retirement, taking benefits can be a complex process. Here are some key things to keep in mind:

Penalty-Free Withdrawals

If you retire early, you may be able to take penalty-free withdrawals from your retirement accounts. However, you will need to make sure that you meet the eligibility requirements. For example, you may need to be at least 55 years old to take penalty-free withdrawals from a 401(k) plan.

Reduced Benefit and Benefit Reduction

If you take your Social Security retirement benefits before your full retirement age, you will receive a reduced benefit. The reduction is based on the number of months you take benefits early.

For example, if you take benefits 36 months early, your benefit will be reduced by 20%. Additionally, if you continue to work while taking benefits, your benefit may be further reduced.

Lifestyle and Health

Here are aspects of lifestyle and health should you wish to retire earlier than expected.


Early retirement provides individuals with the opportunity to pursue their hobbies and interests. Hobbies can be a great way to maintain mental and physical health and can also provide a sense of purpose and fulfillment. Some popular hobbies for retirees include gardening, hiking, traveling, and volunteering.


Retirees who want to stay active and engaged may choose to start their own business. Starting a business can provide a source of income and can also be a fulfilling way to spend time. Retirees should consider the financial risks associated with starting a business and should plan accordingly.

Long-Term Care

Retirees should also consider their long-term care needs. As individuals age, they may require assistance with daily activities. Long-term care insurance can help cover the costs of nursing home care, assisted living, and home health care.

Health Care

Retirees should also consider their healthcare needs. Medicare is available to individuals over the age of 65, but it may not cover all medical expenses. Retirees should consider purchasing additional health insurance to cover any gaps in coverage.


Retirees should also be aware of the impact of inflation on their retirement savings. Inflation can erode the value of savings over time, making it important to have a plan to protect against inflation. Retirees should consider investing in assets that are likely to appreciate in value over time, such as stocks and real estate.


Retirement is a significant milestone in one’s life, and it’s essential to plan for it carefully. Knowing what is considered early retirement age can help you plan and make informed decisions about your future.

Follow your heart and mind. There are areas you should tread carefully should you retire early. Only retire if you are 110% sure. Early retirement age varies depending on your individual circumstances, and it’s essential to plan for retirement carefully.

By understanding the benefits and drawbacks of retiring early, you can make informed decisions about your future and enjoy a fulfilling retirement.

Frequently Asked Questions

Here are some common questions about this topic.

What is the earliest age I can retire?

The earliest age you can retire is 62. However, you may not be eligible for full retirement benefits until you reach your full retirement age, which varies depending on your birth year.

Can I retire earlier than 62?

Yes, you can retire earlier than 62, but you may not be eligible for full retirement benefits. Additionally, retiring early may impact your Social Security benefits and other retirement savings.

How much money do I need to retire early?

The amount of money you need to retire early depends on several factors, including your lifestyle, expenses, and retirement goals. A financial advisor can help you determine how much you need to save based on your individual circumstances.

What are some benefits of retiring early?

Retiring early can provide more time for hobbies, travel, and spending time with loved ones. Additionally, it can reduce stress and improve your overall quality of life.

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