3 reasons to retire as early as you can

Nearly everyone has days at work where retiring as early as you can sounds like the best possible strategy for happiness. Yet we all face the challenge of figuring out where the right balance is between working longer to get the financial security of a larger retirement nest egg and taking the plunge into retirement. There are some situations in which most people would agree that it's smart to retire as early as possible. Here are three of them.

1. Your health depends on it.
Nearly any job takes its toll on your body and mind over time. Some jobs that involve hard physical labor become difficult for people to do even after relatively short careers. Other jobs can have the opposite impact, requiring long periods of inactivity that can lead to health problems like obesity. From a mental standpoint, jobs that involve constant immersion and stress can have cumulative effects that make it difficult to find time to relax and unwind.

Regardless of what your job entails, it's important to have a long-term game plan for exactly how long you think you can keep doing it. If the physical and mental demands of your job will eventually take their toll on you, making a smart estimate in advance of how much endurance you're likely to have will help you implement a savings strategy that will get you to your financial goals within the right time frame.

2. You'll be able to restructure your life.
What many retirees find out the hard way is that leaving the workforce entirely isn't necessarily the right answer for them. The financial and social aspects of working bring different but equally important benefits, and even once your finances are secure, it can be important to keep other work benefits as part of your life.

Early retirement lets you choose what to do based not on financial needs but rather on your interests and passions. All the things that most people put off because they feel that they don't have enough time during their careers are suddenly available, whether it involves learning for its own sake, seeking a specific longtime goal that could bring longer-term benefits, or simply spending more time with people who are important to you. Regardless of the motivation, having the flexibility to retire early gives you more time to do what you want with the rest of your life.

3. You can't predict how much time you have.
One of the most difficult things about planning for retirement is that it's impossible to put a fixed time frame on how long your retirement will last. The threat of running out of money is a very real one, and it motivates many people to work longer than they otherwise would -- even if it turns out not to be a realistic fear.

For those who are 50 years old, life expectancy tables indicate that men can expect to live to age 79 and women to age 83. But by age 60, about 1 in 14 men and about 1 in 22 women will already have died. Those numbers rise to 1 in 8 men and 1 in 12 women by age 65. Those odds aren't bad, but they do show that if you're dead-set on retiring no earlier than the traditional full retirement age of 65, there's a very real possibility that you'll miss out entirely on your retirement dreams. Every year you retire early is a year longer you have to do what you want with the time you have left.

Early retirement is a dream for many people, and sound financial management can help you achieve your money goals and give you the resources you need to retire as early as you can. The larger issue that you have to come to grips with is why early retirement is truly important to you. Once you have a core idea of what's motivating your desire to retire early, it'll be that much easier to put plans in motion to get there.

5 Social Security rules you should know by heart
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5 Social Security rules you should know by heart

1. It takes 10 years of work to earn the right to Social Security retirement benefits. 

Eligibility for retirement benefits requires that you earn 40 work credits under the Social Security system. You can earn up to four credits per year, and for 2016, you'll get one credit for every $1,260 in earnings.

The rules for Social Security disability benefits are different and are based on the age at which you become disabled. In general, the earlier in your career you become disabled, the fewer work credits it takes to get disability benefits. However, it never takes more than the 40 credits needed for retirement benefits.

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2. Most spouses and some ex-spouses can file for spousal Social Security benefits. 

In general, spouses of eligible workers are entitled to spousal Social Security benefits. If you've been married for a year or more, then you can qualify for spousal benefits. In addition, parents of minor children can claim spousal benefits on each other's work histories regardless of length of marriage.

For ex-spouses, the rules are different. Only if your marriage lasted 10 years or longer can you claim benefits on an ex-spouse's work history. In addition, if you've remarried, then you forfeit the right to claim spousal benefits.

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3. Most people can apply for benefits at age 62. 

The general rule for retirees is that the earliest age you can file for benefits is 62. But some people can apply earlier. Spouses can get spousal benefits regardless of age if they are caring for a child who receives benefits either because the child is under age 18, in high school and 19 or younger, or disabled. Widows and widowers can claim survivor benefits at age 60, with an option to claim as early as age 50 if the surviving spouse is disabled.

In general, you can only apply a few months in advance for benefits. The Social Security Administration won't accept applications more than four months before the date when you want benefits to start.

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4. Social Security considers your best 35 years of work history.
In calculating benefits, Social Security looks at the entirety of your career, choosing the 35 highest-earning years after adjusting for inflation over the course of your work history. That means that in contrast to the way some public pensions work, earlier low-paying years can play an equally important role in determining your benefit as recent high-paying years.

For those who haven't worked a 35-year career, staying in a job longer can have a measurable impact on benefits. Even if you already have 35 years of work, staying in a high-paying job an extra year can replace an earlier low-earning year -- again depending on how inflation has behaved in the interim.

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5. Social Security rules can change at a moment's notice.
Understanding Social Security is hard, but even worse is the fact that once you think you have a rule down cold, it can change. Americans found that out late last year, when new changes eliminated the file-and-suspend option and restricted application strategy for most future participants.

Because your benefits aren't written in stone, you need to stay aware of potential program changes. That way, you can weigh in with your representatives to ensure that any concerns you might have are heard.

Social Security rules can be hard to follow, but they're important to understand. By knowing these five rules, you can do a better job of managing your retirement finances.


The $15,834 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $15,834 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

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