An Argument Against Early Retirement

June 30, 2014

RetireIt sometimes seems as if everyone wants to retire early, or maybe it just seems that way on financial blogs. Most people seem to agree that it’s a good thing to do, but we’re going to be contrary today and consider reasons why you might not. In fact, there are arguments against early retirement, solid ones at that.

1. Early retirement preparation will impair your early years.

Relatively few people retire early in life. The simple explanation for that: Early retirement requires far more sacrifice early in life than most people are willing to make.

Truth be told, in order to retire early, you won’t be able to make it happen by saving 10% of your income, or even 20%. You’ll almost certainly have to save something more like 40%, 50%, or even more. And that’s not just for two years or three or even five – you’ll have to do that for at least 20 years, probably more like 25 or 30.

Not everyone has that kind of discipline. What’s more, most people aren’t willing to trade off their youth for a better life in middle age. To illustrate the point, if you want to retire at age 50, you’ll probably need to become a committed saver no later than age 25. Most people haven’t figure out exactly what they want to do with her lives, or even how they want to live their lives at that age. Making that kind of commitment – which involves giving up a quarter of a century of your life, and most of your youth – is more than most people can stand.

2. Your best efforts may not be enough to get you there.

Let’s take that last point a step further. Let’s say that you spend 25 years preparing to retire at age 50. You do everything that you need to do – you live beneath your means, you live one step above a homeless person, you save more than 50% of your income, and you invest it faithfully. What happens if there’s a stock market crash when you turn 45?

Your grand retirement at age 50 may get pushed back to 55, or even 60. At that point early retirement is starting to look like normal retirement. That may not be a bad thing, but if you gave up the best years of your life to make it happen, you’ll have paid a high price for something that’s fairly normal.

There other factors that can derail the best laid early retirement plans. For example, it’s one thing to plan early retirement if you are either single, or married and childless. But if a child or two come in to the picture, the plan may go right out the window.

Even apart from children, you could get snagged by a career crisis that drains of some of your resources. You can also have a major medical event – either for yourself, your spouse, or a close loved one – that will soak up big chunk of your savings.

The point is, no plan – no matter how well carried out – is guaranteed to work. If you’re working diligently to provide yourself an early retirement, you’ll be giving up more than money to make it happen – you be giving up a big chunk of your life.

3. Early retirement increases the chance of outliving your money – dramatically.

The thought of out-living their money is a serious consideration for all who would retire. But if your plan is early retirement, that issue becomes even more complicated.

If you retire at age 65, you’ll probably have to provide for yourself for something like 20 years. But if you retire early at 50, you’re looking at covering 35 years. Unless you are a financial wizard, it may not be possible to provide for that many years on the strength of investment income alone. Markets rise and fall, and sometimes you’re distracted by other events that interfere with your investment success.

Many people who retire early in life find that their exit from the world of work is only temporary. Five, or 10, or 15 years after early retirement, they find themselves back in the workforce.

4. The need for a purpose in life.

Some people talk about early retirement as though they hate their work and want a way out. Early retirement becomes the default path to freedom.

But what if you don’t hate your work? In fact, what if you actually like your work?

That’s a complication in the early retirement scheme. We don’t just work to pay the bills – our work often fills other roles in our lives, emotional ones that we don’t fully understand. For example, work is a form of contribution to the human race – it’s our contribution. It’s also our connection to the world around us. Oh sure, there other ways to connect with the world, but work has a way of making a connection more intimate than other methods. It’s a form of interdependence between us and the world around us.

There are even some among us who feel that we have something to contribute to the world, something maybe extraordinary. Our work is our way to bring it about. Early retirement would short-circuit that desire.

Early retirement could remove those silent advantages that work provides.

5. Balance is always the key in life.

We all have opinions, and mine is no more valid than anyone else’s. But I tend to think that the recent emphasis on early retirement is way overblown. At its deepest level, it’s trading youth for a large enough pile of money to not have to work for the second half of your life. You can engage in something like that, but you have to carefully consider the cost of doing so.

I think that balance should be the real key in life. That means you live your life – and youth – as well as you reasonably can, while making a provision for the future. That’s similar to what people normally do by saving money in emergency funds, and for retirement – but at a more reasonable rate (the more typical 10% or 20% pay).

By doing that, you are enjoying the benefits of today, while making preparations for tomorrow. You’re trying to live a good life now, rather than delaying everything into your later years. In a way, early retirement is a form of back-loading your life, and that isn’t necessarily a good thing.

Given that we never know how long we’ll live – or what the quality of that time will be – it doesn’t seem that building your finances around early retirement is entirely worth the trade-off.

But that’s just me. What’s your thought on early retirement? Is it worth what you’re giving up to get, or do you agree it’s best to find some kind of balance over the course of your life? Leave a comment!


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Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.

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4 Responses to An Argument Against Early Retirement

  • Sophie LaFontaine

    I guess I agree more with Big D. I AM single and childless, and have frugal habits which also suit me. My plan is to have rental houses, and the rents will bolster the retirement income. I need to acquire 10 more little houses (for an average net rent [after fees, repairs, taxes, insurance, etc.]of $500 each). I plan to retire around age 55.

  • Shannon

    I couldn’t agree more with this. While I can see why some people focus on early retirement, I’ve always thought that it’s something I’d never even want. First of all, I love working (because I’m lucky enough to do work I love). Second of all, it really can put your middle aged and elderly years at risk – and as you approach your elderly years it can get harder to earn income if you need it thanks to ageism in the workplace. The idea of stopping work mid-career and hoping to have enough money to live off of just stresses me out. Although some people manage to do it and make it work!

  • Big-D

    As a person who is continually striving to get to early retirement (by 45 is my goal), I think you are missing a few things.
    1) While yes, you might miss some things “early” in your life, sometimes they are worth missing. Being able to retire early depends on a few things done correctly, and some luck. I got a job for 70K out of college, having no debt. That was luck. I got a cheap place to live, and saved a boat load. I did not go wanting. I did not stay in because I was “saving for the future”. No I did not buy a new car every year, but I also did not want to have the latest greatest things every year. I added 10-15K a year to my retirement funds and those are worth over 1/2 a million now. While I have quit adding to retirement funds (because of retiring early, and lack of ways to get funds out without penalties), I will have those for my later years.

    2) While your best efforts may not get you there, then you work longer. What have you got to lose? Again it is working and luck which get you there.

    3) Who cares if you outlive your money? If you retire, own your own property where you want, have enough for expenses, then social security and medicare will be enough for you to “live”. Yes not well, but is it really that bad? No expenses exception food and utilities and medical. Yes you won’t be jet setting around the world, but retirement is what you define it as. I would rather die at 75 flat broke than leave $5 million to my heirs. Why? You cannot take it w/ you and you had a good time doing what you could do, when you could do it.

    4) Everyone needs a purpose. Yes. However defining that purpose is what each individual has to do. Work does not define me. I define my self and work for a paycheck. If I don’t need a paycheck, then why do I need to work? I hate getting up at 6am and commuting to work in an office. But that is where the money is. I will gladly work for another few years, save 65% of my income (150k, house is paid off, 9 year old car, kids in college, etc) so that I can retire to do something I want to do in the future. I am looking at retiring to being a college professor. That is what I call retirement. Yes I still have a job, and I get paid, but I also have several months off, and don’t consider that work. Even if I cannot get into a tenure track position, I can be an adjunct and enjoy it.

    5) Balance is always key, but define that balance? I have not starved, I have not wanted for anything, I have not been seen as “cheap” by my friends, I just happen to have frugal habits which suit me well. It is well known that I want to retire by 45 and I am making that happen. When that happens, my friends know I will be a lot happier. This is my personal balance and the key to my happiness and balance.

    Each person has a different story. While yes, you can say in general you can fear the future, but if you “retire” early, you generally have a personality that goes against the grain, and an entrepreneurial spirit. If situations change, generally they have the smarts, ability, and know how to fix their situation to get them back on track. I mean I have no pride, I can flip burgers for a living should that be the case. I have done it before, and can do it again.

    • Kevin Mercadante

      Hi Big D – I think we just have to agree to disagree. Your position on the subject is more consistent with the conventional thinking. That’s why I wrote this post though, to challenge the conventional thinking. And also to say to people who are not planning for early retirement that that’s OK too. That’s healthy, don’t you think?