Retiring Early

Retiring Early? 9 Things to Consider Before Calling It Quits

September 1, 2020

By Dan DeMarest
VP of Wealth Management 

Early retirement is the something many people think about before they're truly ready. While early retirement may sound enticing, everyone should be clear about what it will mean for them in the short and long term. 


There are many positive factors in retiring early.

  • Reduced stress and improved health. It’s easy to avoid the awfulness of Mondays when every day is a weekend. Less work-related stress could mean improved mental health, and fewer hours behind a desk could give you the opportunity to be more active and physically healthier than ever.
  • Expanded interests. One of the drawbacks of later retirement is that, while the mind may be willing, the body can’t often keep up; early retirement allows you to can fill your days with what you love while still being young enough to do it.
  • An opportunity to reset your career. Trading in your current job for early retirement doesn’t mean you have to stop working entirely. You now have the opportunity to explore interests in a related—or completely different—field.
  • Time to save. Retiring early means you’ll have to look for creative ways to save money while you can, but now you’ll actually have time to look for the good deals. From traveling off-season to uncovering amazing thrift shop finds, you’d be amazed at what you can get for a fraction of what the active workforce ends up paying.
  • Time to savor. It’s easy to assume that all of your friends and family won’t be available when you are—who will you hang out with when everyone else is still at work? The answer: plenty of people. Streets, shops, ballparks, movie theaters, and coffeehouses aren’t empty in the middle of the day; quite the contrary, they are bustling with new friends and colleagues.

Retiring early will take years (and maybe decades) of living within your means, saving where you can, and investing in both your life and your life savings.


The above will sound great to many people considering early retirement, but there are additional factors that must be weighed before turning off the work lamp for the last time. It’s important to consider the long-term effects retiring early may have on retirement income, expenses, and quality of life.

  • Longevity and Inflation. With advances in medicine, it is not uncommon for people to live 25 to 30+ years into retirement. Consider this: If inflation runs 3% per year, in 24 years you will have ½ the purchasing power you have today. Are you prepared for that?
  • Account for Loss Credits. Income, age, and years of service are factors that go into determining the pension amount you have earned. By retiring early, you may be leaving some money on the table. Are you okay with that?
  • Potential Penalties. If you find it necessary to tap into your 401k or IRA and you are under age 59½, you could be subject to a 10% excise tax. There are ways to avoid the penalty, but they come with limitations. Do (or will) you have a plan in place to minimize this?
  • Health Care Costs. While retiring early can have health benefits, it’s important to allocate enough funds to pay for health care costs throughout your retirement life. According to a recent survey, only 18% of workers are confident in their ability to pay for medical expenses. What can you do to avoid being part of the other 82%?

Contemplating early retirement will ultimately be one of the most important financial decisions you make. Contact an advisor from SNB Wealth Management today, and we can help you make the right decision based on your individual circumstances.

About the Author

Dan DeMarest, CFP®, CRPC

Dan DeMarest is the Vice President of Business Development within the Security National Wealth Management division. A lifelong Siouxland resident, Dan has more than 40 years of financial and wealth management experience. He is a graduate of Morningside College and the Iowa School of Banking.