The Dark Truth On Early Retirement [Don’t Fall Into The New-Age Fad!]

Learn the real meaning of early retirement and the right mindset you should have while picking/doing a job!

Sayan Chakraborty
7 min readJul 24, 2022

“Retire early and spend your days on a nice beachside where playing volleyball and dancing with your friends is the only work you have to do.

And for this, please take our instant money-making course worth $37K only, taxes included.” says all big YouTubers and rich Twitter stars, and you are smiling at the other end of the screen, dreaming of perfect retirement life.

Sorry to break it to you, but this early retirement dream is far from the truth. As per the Employee Benefit Research Institute Survey (yes, those “boring” stats which reflect reality):

“Just 11 percent of workers say they plan to retire before age 60.”

Are these workers foolish, or there is something more than meets the eye? Continue reading for the dark truth:

First, The Basics: What Is Early Retirement?

This is what SSA has to say about early retirement:

“A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.”

Generally speaking, retiring before 60 is considered early retirement. Sportsperson engaged in high-intensity games like Tennis retire as early as 27–30 [everyone is not Roger Federer] but most salaried class works till 60–65 or even more.

But what will you do when you retire? Relax?

Here’s where the problem begins. Our perspective around retirement is bad as we consider no-work = retirement.

Retirement means doing the work you want to do. Not depending on your paycheck to survive. You can set up your own business, do a side hustle or work on your passion project.

You have invested in retirement schemes which will give you monthly cash payouts to meet your expenses. This is when you can say you have retired early.

I know what you are thinking next:

To achieve this early retirement dream, I need to be the next Warren Buffett.

Interestingly, Buffet himself has no plans to retire.

Why Early Retirement Is Not Possible Even If You Are A Financial Wizard [5 Reasons]

Even if you are a brilliant financial planner right from your first income, achieving this early retirement dream is hard, and I have x reasons to back my claim.

Ready? Here’s the first one:

Reason #1: Healthcare Expenses Are Going Through The Roof

The United States is one of the best countries in the world…in terms of rising healthcare costs 😢 In fact, healthcare expenses are one of the highest in the world.

An average currently spends around $12,500 annually on healthcare, and costs are (like all things that exist) expected to rise in the future [Knock, knock, knock recession has arrived!].

You can blame the big pharma, but this is how it is. Medicare, too doesn’t start before 65, so you can bid goodbye to your early retirement plans.

But this grim truth can be a healthy reminder for all the young adults out there. If you are in your 20s, don’t ignore your health. A healthy self is much more rewarding than an early retirement delusion.

If you are looking to travel and refresh your body and mind, check out this guide for 3 clever budget-friendly tips:

Reason #2 Daily Expenses Are….[Pss, The Feds, Have Turned On Their Printers Again!]

Whether you like it or not, macroeconomics is never in your control. So there’s no one stopping the Feds from printing money again or another mad nation head to wage war for reasons they know better.

What this eventually results in is an inflation rate which increases your daily expenses like never before.

No one, not even a financial genius, can predict a 2-year-long pandemic and make provisions for it.

So no matter how much you save for retirement, it will always be inadequate. Believe it or not, the whole world is conspiring against your hard-earned savings. And when I say the whole world, I mean it!

Financial Planners have warned about increasing property taxes which can be upto 1% of your home’s purchase price, and if you have mortgage (like the 44% of sexagenarians have), then you will have a good time seeing your expenses working harder than you were at the office!

Speaking of conspiracy, here’s the biggest of it all:

Reason #3: Taxes Will Destroy Your Early Withdrawals.

I love paying taxes, says no one [except actors in government ads]. And I’m not saying you don’t love your country. The simple reason is: that it’s hard to plan for taxes beforehand, and even if you do, most of the time, your estimates will be wrong as some new rule crops up…

Before you say I don’t know tax planning, here is how it goes:

If you want to withdraw $20,000 from your IRA, you’ll get only $15,000 as the rest goes to paying federal taxes, assuming you are in the 15% tax bracket.

Generally, you have to pay a 10% premature withdrawal from all tax-saving investments like IRAs or 401(k) plans.

Reason #4: Only Jesus Knows At What Age You Will Die

No, I’m no priest, but this religious sermon can mess with your early retirement plans.

If you are currently in your 50s, there’s a 50% chance you’ll live past 80 and a 25% chance that you will score a century (100 years).

You cannot plan your stay on the earth and if you live longer and didn’t plan for your retirement, you might have a hard time relying on your Social Security and 401(k)!

The more years you live, the more uncertainties you need to face, as discussed in reason #2.

I’m not here to spread negativity, so young adults should take this as a useful warning bell. In today’s world of credit cards and instant loans, developing a habit of savings early in your life can be more beneficial than you think.

Your time is surprisingly short and frustratingly long in this mortal place. So, plan according.

(No, this isn’t written in the Bible-it’s my personal advice 😊)

Reason #5: Earning After Retirement Isn’t A Cake-Walk

I am done with my lectures, so I’m letting Leslie Beck, a certified financial planner in Rutherford, New Jersey, do the talking for this section:

“One thing early retirees don’t seem to realize is that if they are planning on doing traditional part-time work while retired, those jobs require a commitment to a schedule that sometimes is not very flexible.

This can cut into other retirement goals such as travel or visiting with family. I have had retirees surprised by the inflexibility of part-time work.”

No wonder why only 27% of retirees have reported doing a paid-work as per the EBRI survey.

In case you are wondering, it’s the same survey I mentioned in the introduction.

So, Early Retirement Is A Myth. I’ve to work till I die, right?

I know you are thinking about this very question now. And I’ll not answer this in yes/no because:

  • Life isn’t an MCQ exam
  • This question shows your frustration rather than curiosity.

So, what’s the way forward? It’s finding your passion in your current profession.

I know it may sound boring at first, but why did you spend 12–15 years in education? (considering you are lucky enough to do so)

Is it because it’s what everyone does, and you didn’t have an option? You were too small when you entered the pre-school, and by the time you understood how cool Netflix is, you had already finished your graduation.

See, the truth is…your years in education should have helped you:

  • Find the professional field that interests you (be it computer science, arts or engineering)
  • Help you enter the professional field which gives you both inner satisfaction and a means of living.

And for most of us, we didn’t get both of these from your education system.

Exams in school and college and other professional degrees are a hurdle in itself. They hardly prepare for a professional field.

Or at least make you fall in love with any professional field.

But learning doesn’t stop after your formal education is over. Instead of going through a rat race of early retirement, you should find your passion in your current job. It can be:

  • Podcasting
  • Writing
  • Making videos
  • Painting
  • Gardening

The list goes on. All these passions can be monetized, but you should be committed to sticking to them even if you don’t get results in the first 1–2 years.

See, there is nothing you’ll lose on this passion hunt, but if you do succeed in your passion or hobby, you’ll find your retirement plan then and there.

And there is no government taxing you on this!

Did you like my opinion on this section? What are your ideas on retirement? Let’s discuss this in the comments!

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Have a great day, readers!