Retiring Early: Pros and Cons

relax on the beach

As my daughters remind me from time to time, I can be a bit old-fashioned about certain things. For instance, despite the “business casual” attire commonplace in most offices, I still wear a suit and a tie most days, particularly if I am meeting with folks, teaching a class, or speaking to a group that day. Those same young ladies also tease me about the grungy, uncoordinated outfits I wear on the weekends when I putter around the house working on projects and my wife, Jill’s honey-do tasks. While they giggle and ask if I got dressed in the dark, Jill will point at me and say, “This is just another reason why your father can’t retire early.”

Sure, early retirement sounds like a dream for many folks, I get it. No more trips to the dry cleaners, setting alarm clocks, or workplace deadlines. At any given time, I am working with some folks that place early retirement near the top of their financial goals. Depending on the age they want to retire, it can be a difficult conversation. Sometimes, it would be too financially risky or require drastic lifestyle changes both now and into the future.

On the other hand, I also know a lot of folks who can – and do – achieve their financial goal of retiring early, only to struggle figuring out life beyond finances after their primary career ends. A big part of my role as a financial advisor is ensuring the financial numbers work, but it also requires knowing their situation at a deeper level than a just list of assets and retirement accounts. I know some that want to travel the world and others that want nothing more than a nice porch and a rocking chair. Usually, they fall somewhere between the two extremes.

There is no doubt retirement often brings great happiness and a sense of accomplishment. Many people point to the simple joys, like getting enough sleep and having time to exercise more often. Happy early retirees often fill up their time with long deferred hobbies or take on charitable works and causes. No matter how much retirees enjoy their careers and the accompanying achievements, they likely don’t miss the workplace stress.  

And while some retirees want to conquer the world, others find that simplicity means lower expenses.   Typically, in retirement, we find we spend less money on some expenses like transportation, dry-cleaning bills, daily lunches out, and more.

For a lot of folks, early retirement can be reached, but it requires diligent financial planning, structure, and discipline. Beyond being highly disciplined savers and investors, early retirees must overcome financial hurdles that people who retire at traditional retirement age don’t face. For example, early retirees usually can’t efficiently access many of their retirement accounts like traditional IRAs and 401(k)s because of tax penalties prior to age 59 ½. They also need to cover a potential health insurance gap until they qualify for Medicare in their 60’s.

Even if they skillfully plan for and overcome financial challenges, these folks can find themselves with an abundance of unaccustomed free time. They might have met their financial goal of early retirement but struggle with finding meaning and connection without their careers. As I tell my girls, a life of achievement without fulfillment is not a life you want.  And for some, retiring early to spend long days with nothing to do will inevitably lead to an unhappy early retirement. After all, doing nothing is not what early retirement is all about. Having a plan for, even an outline of what your days post-work might look like, can help you prepare. 

Perhaps you’ll replace sales meetings with a weekly golf outing or a volunteer gig. Maybe you can join your spouse or neighbors for daily walks or trips to the gym. Plan a long wished-for trip or take classes to learn something new. In the same way you test-drive your retirement budget, try taking a week or more off work to spend your days as you would in retirement. If you become bored with long walks, daytime TV, and hobbies within a week, you’ll probably also find yourself restless in retirement.

Several of my more self-aware and creative folks I work with have been known to dip their toe in the water with a “step-down” in hours and responsibility or they work on a part-time consulting basis before fully retiring.    I’ve seen others start completely new careers or businesses fueled not so much by money, but a passion for continued connection with people and life. 

Early retirement requires significant financial and personal considerations which include building out a sound retirement system that incorporates downside risk mitigation into that system. Understanding your risk budget and process become critical since you are moving from your accumulation years to your distribution years.  You see, we never look at things as good or bad, only appropriate or inappropriate.  Is your system appropriate?  Do you know?  Should you?

You see, wise people take careful measure of both the pros and the cons of early retirement. While dreaming of an early retirement will probably never go out OF style (much like my weekend wardrobe), you CAN make this dream a reality – because retirement is not the end of a productive life, but the start of a new adventure. So plan well!

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, Mansfield. Jeff can be reached at

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