5 Reasons Not to Retire Early

Tensed mature woman sitting in bed with man in background
AlamyEarly retirement can become boring if all your friends and relatives are still working.
By David Ning

Early retirement is a long-term goal that requires discipline and perseverance. But hitting a desired number in your retirement accounts doesn't mean you are ready to walk away from your job. If you focus only on the finances you might end up surprised when retirement isn't what you thought it would be. Here are a few reasons not to retire just yet, even if you have saved enough to quit the rat race early.

You don't know what you will do after you quit. If you don't have a plan for how you will fill your days, it's very easy to become bored. Without a job or social activities to draw you out of the house, you may find yourself sitting around, watching TV and gaining weight. Many of your friends will be busy during most weekdays, so you probably won't be able to pick up the phone and call all your pals to hang out mid-day. It's better to enter retirement with a list of things to do. The good news is that coming up with ideas for things to do in retirement is actually quite fun.

You work in a job you hate. If you dislike your job, you may start thinking about early retirement as an escape. But the solution to an uncomfortable work situation is actually a different job, rather than quitting all together. Working in an enjoyable environment is actually better than not working, because you are spending time socializing and feeling productive while receiving income. If you hate your work, then definitely try another career that's more enjoyable before you consider retiring for good. You may find something more worthwhile than retiring early.

You haven't figured out your retirement budget. If you just picked a retirement savings goal that sounded nice, then you aren't ready to retire yet. You may very well have enough money to quit working, but you definitely want to be sure by estimating what your retirement expenses will be once you no longer work. Financial surprises should be expected, so don't blindly give up a steady paycheck just because you read a rule of thumb online about how much the average person needs to spend in retirement.

You just hit your net worth goal. This major financial milestone is a worthy achievement. But you should double check if the retirement number you may have chosen years ago still makes sense. Perhaps you forgot to factor in inflation when you first dreamt up the number. You also don't want to quit the second your retirement number shows up on your computer screen. If you are invested in the stock market, the value of your assets fluctuates constantly, and you need to make sure you have enough of a cushion to weather the volatility. While it likely took incredible discipline to meet this long-term goal, take a bit more time to make sure that money is likely to be enough to last for the rest of your life.

You haven't sat down with your family to discuss the move. Talk with your loved ones at length about your intention to quit before you make this big life change. Find out how your family feels about you staying home all day. Family members still dependent on your income might be affected by the change. You've worked hard all your life and deserve to retire when your finances fall into place, but you still want to make sure your closest family members are comfortable throughout the transition. Make sure everyone understands that they won't need to worry about a drastic downgrade in lifestyle just because you aren't getting a steady paycheck anymore. Share with them all the great changes that will happen around the house now that you are going to be around more. The more open and positive you can be about life after retirement, the better everyone will feel about your decision. Their participation in the change will make the retirement transition easier for you.

Early retirement can be a wonderful experience, but it doesn't mean quitting just because a retirement calculator says you are ready. Your life is much more than dollars in a retirement account. Treat the decision to retire with the respect it deserves.

David Ning is the founder of MoneyNing.com.
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