10 Reasons to Retire Early

What if retirement didn't have to start at 65 or 67?

That question is becoming more common.

People are living longer, working differently, and thinking more carefully about what they actually want to do with their time. For some people, that means working well into their 60s or 70s. For others, it means figuring out how to leave the workforce at 55, 60, or somewhere in between.

Early retirement sounds fantastic on the surface. More time. More freedom. Fewer meetings. No commute.

But there is a serious financial side to the decision. Retiring five or ten years earlier means your savings have less time to grow and potentially need to support you for more years.

So why do people do it?

Here are 10 reasons to retire early, along with some of the things you should think about before handing in your resignation.

1. You Get Your Time Back

This is probably the biggest reason to retire early.

Money can be replaced. Time cannot.

If you work a typical 40-hour week, you spend roughly 2,000 hours a year working. Add commuting, getting ready for work, business travel, overtime, and the mental space that work occupies, and the number gets much larger.

Retiring at 55 instead of 65 could give you ten additional years in which those hours belong entirely to you.

That could mean spending more time with your spouse. Seeing your grandchildren more often. Traveling. Volunteering. Working on projects around the house. Learning an instrument. Playing golf on a Tuesday morning simply because you can.

You don't need a packed schedule, either.

Sometimes the luxury is simply having nowhere you need to be.

2. You Can Travel While You're Still Active

There is a big difference between being retired and being physically capable of doing everything you want in retirement.

If you retire at 55, you may have decades ahead of you when travel is relatively easy.

You can take a three-week road trip. Spend a month somewhere warm. Backpack through Europe. Rent an RV. Visit family who live across the country. Take a cruise without having to squeeze it into two precious weeks of vacation.

Later in life, health or mobility can change the equation.

That doesn't mean you should panic and retire tomorrow. It does mean that your retirement plan should consider the fact that your early retirement years may be the years when you are most capable of enjoying active hobbies and travel.

We explore some of these lifestyle considerations in Retirement Phases: Go-Go, Slow-Go and No-Go Years .

3. You Can Spend More Time With Family

Work has a funny way of consuming the years when your children are growing up.

Then they become adults.

And suddenly you realize that your children have busy lives of their own.

Early retirement can give you more opportunities to be available when family needs you. Maybe that means helping with grandchildren. Maybe it means visiting aging parents. Maybe it simply means having dinner together on a Wednesday instead of trying to coordinate everyone's schedules around work.

The same applies to friendships.

When everyone is working, getting together can require weeks of planning. Once you retire, your calendar can become much more flexible.

And that flexibility is worth more than it sounds.

4. You May Be Able to Improve Your Health and Lifestyle

Work itself isn't necessarily unhealthy. Plenty of people enjoy their careers and thrive while working.

But a stressful job, long commute, irregular schedule, or sedentary lifestyle can make it harder to prioritize healthy habits.

Retirement can remove some of those obstacles.

You can exercise in the middle of the day. Cook instead of ordering takeout because you're too tired to make dinner. Sleep without an alarm. Schedule appointments without taking time off work. Spend an afternoon outside.

None of this guarantees better health, of course. But having control over your schedule can make it easier to build the lifestyle you actually want.

This is one reason the decision to retire shouldn't be reduced to a spreadsheet.

Money matters enormously. But so does what you are trying to accomplish with that money.

5. You Can Pursue Something Completely Different

Retirement doesn't necessarily mean doing nothing.

In fact, some of the most interesting retirements begin when someone finally has time to do something they couldn't fit into their working life.

Maybe you've always wanted to start a small business.

Maybe you want to write a book, restore classic cars, build furniture, teach, coach, volunteer, start a YouTube channel, or become the person who finally learns how to play guitar.

And you don't necessarily have to stop earning money.

Early retirement can sometimes be combined with part-time work or a small business. The difference is that you are working because you want to, rather than because the next paycheck is required to pay the mortgage.

That is a very different relationship with work.

6. You May Have Reached Financial Independence

Here's the most obvious financial reason to retire early:

You may simply have enough money.

If your investments, pensions, government benefits, real estate, and other income sources can support the lifestyle you want, continuing to work may be a choice rather than a necessity.

Of course, determining whether you actually have enough is harder than looking at your investment account balance.

You need to account for inflation, taxes, investment returns, spending changes, healthcare, Social Security or CPP and OAS, pensions, and the possibility that you will live for another 30 or 40 years.

Our article Retire at 55 with $500K looks at exactly this kind of early-retirement question.

You can also see how a larger portfolio changes the equation in Can I Retire with $2 Million? .

7. You Can Leave a Job You No Longer Enjoy

Let's be honest.

Sometimes the reason someone wants to retire early is very simple:

They don't want to work anymore.

Maybe the company changed. Maybe the job changed. Maybe the industry changed. Maybe your boss changed. Or maybe you changed.

A career that was exciting at 35 may feel completely different at 55.

Financial independence gives you options. You can leave. You can reduce your hours. You can move to a less stressful position. You can take a year off and figure out what comes next.

You don't necessarily need to hate your job to want something different.

Sometimes you simply reach the point where you value your time more than the next promotion.

If you're trying to figure out whether you're actually ready, take a look at 10 Signs It's Time to Retire .

8. You Can Design Your Retirement Instead of Waiting for It

One of the biggest mistakes people make is treating retirement as a date instead of a lifestyle.

"I'll retire at 65" sounds like a plan.

But what happens on the morning after your retirement party?

Early retirement gives you an opportunity to think about that question before you get there.

Where will you live? How much will you spend? What will you do during the week? Will you travel? Will you work part-time? Will you move closer to family? Will you stay in your current home?

These aren't minor details.

Your lifestyle choices determine how much retirement income you actually need.

For example, someone who plans to travel extensively during their first ten years of retirement may need considerably more income at 58 than they expect to need at 78.

That is one reason we created Retirementize to model different retirement phases instead of assuming that spending stays identical for the rest of your life.

9. You Can Take Advantage of Your "Go-Go" Years

There is a retirement concept that I really like: the Go-Go, Slow-Go, and No-Go years.

The basic idea is that retirement spending isn't necessarily flat.

Early retirement may be the time when you spend the most.

You travel more. You take up hobbies. You renovate the house. You buy the boat. You visit family. You finally use that passport.

Later, your spending may naturally slow down.

Eventually, health and mobility can become more important than travel and entertainment.

This doesn't happen to everyone, and there is certainly no universal retirement pattern. But recognizing different spending phases can make early retirement more realistic than simply multiplying today's expenses by 30 years.

Retirementize allows you to build different income targets for different stages of retirement, which can be especially useful when testing an early retirement date.

10. You Don't Know How Much Time You Have

This is the uncomfortable one.

Nobody knows exactly how long they will live.

Financial planning tends to focus on making sure your money lasts long enough. That's important.

But there is another side to the equation.

Your time is also finite.

Waiting until 70 might give you more money. It might also mean that some of the things you wanted to do are harder to do by then.

That doesn't mean everyone should retire early. Far from it.

Some people love working. Some need the income. Some want to maximize their pension. Some want to keep building their portfolio. Some simply aren't interested in retirement yet.

But if you have the financial flexibility to retire early, it is worth considering what those additional years are worth to you.

The Big Catch: Early Retirement Costs More Than It Looks

There is a reason financial planners spend so much time talking about the risks of early retirement.

You are taking money out of your portfolio earlier while giving it fewer years to grow.

That creates a double effect.

Imagine someone who has $1 million at age 55.

If they keep working until 65, they may continue contributing to their retirement accounts while their existing investments grow.

If they retire at 55, they stop contributing and start withdrawing.

The difference over ten years can be enormous.

And that's before considering inflation, taxes, market volatility, healthcare costs, and the possibility of a long retirement.

This is why "I have $1 million" isn't enough information to determine whether you can retire.

The better question is:

How does my entire financial plan behave if I stop working at 55, 60, or 65?

Early Retirement Means Bridging the Gap

Another issue that gets overlooked is the period between retiring and receiving government benefits.

If you retire at 55, Social Security isn't available immediately. In Canada, CPP and OAS also have their own eligibility and claiming rules.

That means your investments or other income sources may need to provide the bridge.

This can actually create interesting planning opportunities.

You might intentionally use taxable investments or retirement accounts during the early years, then begin government benefits later.

The optimal strategy depends heavily on your country, tax situation, pension income, account types, spending needs, and expected longevity.

Our Early Retirement Withdrawal Calculator is a useful place to explore how withdrawals can bridge those early retirement years.

What About Healthcare?

Healthcare is one of the biggest differences between retirement planning in the United States and Canada.

An American retiring before Medicare eligibility needs to think carefully about health insurance and the cost of coverage before age 65.

Canadians have a different healthcare system, but that doesn't mean healthcare costs disappear. Dental care, prescriptions, travel insurance, vision care, long-term care, and other expenses can still become significant.

An early retirement plan should include realistic assumptions for these costs rather than simply assuming they will be negligible.

What If You Don't Have Enough Yet?

This is where early retirement planning gets interesting.

You don't necessarily have to choose between working full-time until 65 and completely stopping work at 50.

There is a huge middle ground.

You could work part-time.

You could take a lower-paying but more enjoyable job.

You could work another two years instead of five.

You could downsize your home.

You could reduce your target retirement income.

You could increase your savings rate.

Or you could change the timing of Social Security, CPP, OAS, or pension income.

Small changes can have surprisingly large effects over a 30-year retirement.

That's why it is worth running several scenarios rather than treating retirement age as a single yes-or-no decision.

Try Different Retirement Ages

Suppose you are 52 today.

Instead of asking, "Can I retire early?" try modeling several possibilities:

• Retire at 55
• Retire at 57
• Retire at 60
• Retire at 62
• Retire at 65

Then look at what changes.

How much do you need to withdraw from your investments?

How long does your portfolio last?

What happens to your taxes?

What happens when Social Security, CPP, OAS, or pension income begins?

What happens if markets perform poorly during the first few years?

What happens if you live to 95?

Those are the questions that turn "I want to retire early" into an actual retirement plan.

10 Reasons to Retire Early: The Short Version

1. You get your time back.
2. You can travel while you're still active.
3. You can spend more time with family and friends.
4. You may have more freedom to focus on your health and lifestyle.
5. You can pursue interests that never fit into your working life.
6. You may have reached financial independence.
7. You can leave a job that no longer fits your life.
8. You can design your retirement instead of simply waiting for it.
9. You can make the most of your early "Go-Go" retirement years.
10. You don't know exactly how much time you have.

Fun Facts

• Retirement doesn't have to mean zero work. Many people replace full-time employment with consulting, seasonal work, part-time jobs, businesses, volunteering, or hobbies that generate income.
• Your retirement spending may change dramatically over time. Early retirement is often more active, while spending can decline later as travel and other activities become less frequent.
• Retiring earlier isn't automatically cheaper. A person retiring at 55 may need to fund substantially more years of retirement than someone retiring at 65.
• Retirement is not necessarily an all-or-nothing decision. A gradual transition from full-time work to part-time work can create another path to financial independence.
• The best retirement plan is personal. Two people with identical investment balances can have completely different retirement requirements because their spending, taxes, housing, pensions, and goals are different.

Final Thoughts

There are plenty of good reasons to retire early.

More time. More freedom. More travel. More family. More opportunities to finally do the things you've been putting off.

But early retirement isn't just about wanting to stop working.

It is about making sure the money works when the paychecks stop.

If you're considering retiring at 55, 60, or somewhere before your traditional retirement age, don't just look at your current account balance. Build the entire plan.

Include your investments, pensions, government benefits, housing, taxes, inflation, spending, healthcare, and the possibility of living a very long time.

Then run the plan at several different retirement ages.

You may discover that you can retire earlier than you thought.

Or you may discover that working another few years dramatically improves your financial flexibility.

Either way, you'll be making the decision with numbers instead of guesswork.

And that is really what early retirement planning is all about.