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Are you willing to retire early? Many people have this goal for various reasons. For some, it’s an escape from a grueling work schedule and the stress that comes with it. For others, it’s a chance to spend quality time with family and pursue hobbies.
However, many people find it difficult to accept the idea of retiring early, whether because of financial insecurity or guilt. But if early retirement appeals to you on any level, here are three reasons why it’s worth it.
1.You can afford it
Many people spend their entire lives sitting idle in the retirement savings department. Case in point: Americans ages 50 to 55 have an average of $124,831 saved for the future, according to the Economic Policy Institute, which isn’t a lot at this stage of life.
When we apply a 4% annual withdrawal rate to that balance (as recommended by countless financial experts), the income comes to nearly $5,000 per year. Of course, there’s Social Security to consider, but the problem is that many older Americans aren’t ready for retirement from a savings perspective. However, if you’re not one of them, there’s no reason why you shouldn’t feel comfortable retiring ahead of your peers.
Let’s imagine you had about $125,000 in your early to mid-50s and now have $2 million. Now, if you retire in your 50s, you don’t want to start withdrawing your savings at 4% per year because the formula is designed to ensure that your savings don’t run out in 30 years and you’ll likely live into your 90s , thus requiring them to last longer. But even if we cut the withdrawal rate in half to 2%, you’d still get $40,000 a year in retirement income from your savings. Combined with Social Security and other sources of income, it could potentially allow you to live a very comfortable lifestyle.
2. You can still make money
Many people view retirement as a time when they stop working. But in reality, retirement is an ideal time to start a business or turn a favorite hobby into a money-making opportunity. If you’re worried that you won’t be able to retire because your savings aren’t strong enough, but you want to be able to live on your own terms and have control over your schedule, it’s definitely worth quitting your job and doing something. Instead, do other things to make a living. Remember, the more fulfilling you find your job, the more motivated you will be to keep at it.
3. It’s good for your health
There are studies showing that working longer hours can extend your life. Not only can there be mental and physical benefits to entering an office, but the social aspect alone can make working long hours an option worth considering.
On the other hand, the wrong job can easily land you in a situation where your work is damaging to your health. Excessive stress has clear links to high blood pressure and heart disease, while being sedentary (which is often the case for office workers chained to their desks for hours on end) can lead to weight gain and other health problems . So if you believe your health will improve once you stop working, that’s a good reason to retire early. Or, put another way, the longer you work in a job that is harmful to your health, the greater your risk of dying early and missing out on retirement altogether.
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Early retirement isn’t for everyone, and for some, such as those with no savings, it’s a difficult goal to achieve. But if you can afford to retire early, it’s certainly worth it to leave the workforce early and enjoy the lifestyle you’ve dreamed of for years.
CNN Business (New York) First published September 26, 2018: 9:42am ET