Thinking about retiring in your 50s—or even your 40s? You’re not alone. The appeal of early retirement is stronger than ever. But before you submit that resignation letter, there’s a lot more to consider than just having “enough” saved.
In Episode 93 of the Last Paycheck podcast, CERTIFIED FINANCIAL PLANNER® Archie Hoxton and advisor Jimmy Sutch dive deep into the real risks of early retirement—and why it’s about more than just dollars and decades.
Early Retirement Is a Financial Shift—Not Just a Lifestyle Upgrade
Most early retirees envision freedom: time to travel, pursue hobbies, or simply escape the daily grind. But many are caught off guard by the structural, emotional, and economic complexities of retiring early.
You may no longer have a paycheck—but the expenses don’t stop:
- Health insurance premiums
- Unexpected home repairs
- Market downturns in the first few years of retirement
- Long-term inflation
These issues are especially problematic if you’re not eligible for Medicare yet or if most of your savings are tied up in accounts with early withdrawal penalties.
Ask Yourself:
- Have I stress-tested my plan against a bear market in the first 5 years?
- What if inflation is higher than projected for the next decade?
- Can I bridge the gap between retirement and Medicare without draining my accounts?
- Do I have a long-term income plan that adjusts with changing needs?
Many people rely on the 4% rule or online calculators that don’t factor in timing risk, tax sequencing, or variable spending. That might be fine for a theoretical plan—but not for a real-life retirement that could last 35 to 40 years.
It’s Not Just About Math—It’s About Meaning
Rob and Archie also explore the psychological impact of leaving the workforce earlier than your peers. The idea of “retiring to something” rather than “retiring from something” becomes vital.
Without a sense of purpose, structure, or community, early retirement can lead to boredom, regret, or even depression. That’s why retirees who plan not just financially—but emotionally—tend to report higher satisfaction over time.
What This Episode Emphasizes
- Run a detailed plan that includes multiple scenarios—not just the average
- Prepare for higher-than-expected spending in your first decade of retirement
- Consider partial work or phased retirement as a buffer
- Make sure your retirement isn’t just financially sustainable—but personally fulfilling
Final Thought
The dream of early retirement is possible. But only if you understand what it takes to turn that dream into a durable, purpose-filled reality. The earlier you want to retire, the more thoroughly you need to plan.