The advantages of early retirement extend beyond having more time, reduced stress and independence. Those are benefits of retiring in general, not just retiring early. Early retirement- retiring before the full retirement age (usually 65) - has specific advantages that should form part of your decision to retire early.

Greater longevity

When you retire earlier, you are likely to spend a longer period in retirement. While this can be disadvantageous, once you plan properly it will redound to your benefit. Not all early retirees will have a higher life expectancy, so the good news is that retiring early may not necessarily suggest that you will spend 20 or 30 years in retirement. Greater longevity makes it likelier that you will enjoy more golden years.

A longer period with lower medical risks

Retirees have a higher probability of becoming ill once they pass age 70. That is why a lot of insurers stop medical coverage at or around that age. Retiring early is a good way to ensure that you stand a better chance of enjoying a portion of your retirement when you are healthy (or at least healthier).

Early retirement incentive plans

Some employers offer early retirement incentive plans or packages. These plans have to be assessed properly in light of the true benefit, however. In the majority of cases, early retirement incentive plans provide less than more. Ultimately, if you were planning to retire early anyway, face involuntary retirement or have alternative options after retirement; early retirement incentive plans may give you more instead of less.

Full benefits in some jobs

Certain jobs offer employees full benefits once they have worked for a minimum number of years. In certain cases, you can attain full benefits at or before age 55, so early retirement may not severely hamper your early retirement plans. When working beyond the minimum number of years does not significantly affect your retirement benefits, early retirement is a fair option.

Part-time options

Early retirement puts you in a better position to pursue options other than full retirement. Since you are not way beyond your prime when you retire early, you have a better chance of taking advantage of the skills your experience without being too old to do so.

The advantages of early retirement may not easily outweigh its attendant disadvantages. In making the decision to retire early, you must be able to benefit from it in at least one way. Since the disadvantages of early retirement tend to be financial, it follows that you should have a financial advantage of retiring early as well.

Learn more about this author, Darrell Victor.
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