Early vs. Late Retirement

Remaining active is important, whether you retire early or late.

elderly,retirement image by Greg Pickens from Fotolia.com

Leaving your job while you’re still in your prime and enjoying early retirement holds attractions for many people. Other people find fulfillment working well past retirement age. Each choice will impact both your lifestyle and your finances. While most people worry about finances in retirement, you should also consider the type of person you are and how you’ll remain active and connected in retirement. Considering the advantages and disadvantages of both early and late retirement will help you make the choice that’s right for you.

Social Security

The Social Security Administration refers to early retirement as age 62. This is the earliest age at which you can collect regular Social Security benefits. While you can leave your job and retire earlier, you can’t receive Social Security benefits until you're at least 62. At that time, you will collect a reduced benefit. At your full retirement age -- determined by the year of your birth -- you’ll collect your “full” Social Security benefit. But waiting until age 70 -- late retirement -- brings you an even bigger monthly check. The Social Security Administration provides an online calculator you can use to determine the size of your potential benefits depending on when you stop working and when you begin collecting benefits.

Other Resources

You can begin withdrawing from retirement savings such as 401k accounts and individual retirement accounts at age 59 1/2. If you retire before this age, you’ll need other savings or sources of income, such as rental properties or other investments, to pay your living expenses. If you retire early, you’ll need more money put away in your retirement accounts, as you can expect to pay for retirement for more years. According to the Department of Labor, you’ll need between 70 and 90 percent of your current income in retirement. Multiplying the number of years you expect to be retired by this amount will give you a rough estimate of the money you’ll need to save to comfortably retire.


If you plan to do a lot of traveling or want to participate in activities such as mountain climbing or skiing, retiring earlier increases your chances of having the health and stamina to participate in these activities. While many people remain active well into their 70s and 80s, the chances of developing health problems increase with age. The age of your children may also impact your options for retiring early or later. If your children are still in high school or college and living at home, you may find it more difficult to retire early, since you will probably need your income from working to support them and pay for their educations.


In 2001, Hillary Waldron, an economist with the Social Security Administration, studied the longevity of early retirees compared to that of people who retired at age 65. Her study only looked at men, not women, but found that men who retired early also died earlier than men who retired at age 65. Waldron theorized that perhaps health problems forced some men into early retirement and these men would have lived shorter lives regardless of when they retired. In their book “The Longevity Project,” researchers Howard Friedman and Leslie Martin found similar results in their study of what factors led to people living longer. People who worked into their 70s generally lived longer. Friedman and Martin suspected this was because these people had goals, were engaged and had a social network of co-workers to keep them involved in life. If you’re going to retire early, consider how you’ll keep a social network and remain involved in life.