I’ll admit, there’s a part of me that would love to retire in my 50s. I have big plans for retirement, and I’d love more time to devote to my hobbies. But even though I’m prioritizing retirement savings now, I don’t know that I’ll actually retire that soon. The advantages of early retirement are obvious, but it has serious drawbacks too. Here are three you should bear in mind if you’re thinking about retiring in your 50s.
1. Your savings have to last a lot longer
If you retire in your 50s, you can probably expect to spend about 30 years in retirement, and some people might even make it to 40 years. You’ll need a lot of money to cover your expenses during that time, so you have to get comfortable foregoing certain purchases today so you can save more for retirement.
An extra-long retirement also increases the risk of running out of money prematurely. It’s difficult to know exactly how much you’ll need for retirement under the best of circumstances, and with a 30-plus year timeline, there’s plenty of opportunity for unplanned expenses to throw off your budget. Even if it’s just a few thousand dollars here and there, that can add up over time, and you could find yourself without enough money to cover all of your planned costs in your final years.