There are many people that dream of retiring early. This might be because they are not keen on working and so would much rather do other things instead. They may want to have more time to be with their family, travel, study or just relax and not have to commit themselves to being at work. However, is an early retirement really worth it? There are many advantages, but there could be a number of disadvantages as well and it is worth considering these.

Reduced Pension Pot

While you are working you will probably be paying into a pension pot. This could be a government pension, where payments are taken automatically from your pay and it could also include a work pension where an employer pays in as well as an employee. It could also include private pensions that just you pay into. Of course, if you give up work, you can still pay into some pension pots. You have to be employed or self-employed to pay into the government pension, but you do not for other pensions schemes. However, you will need an income to cover these payments and your living expenses and without a job, you may not have access to an income like this. The longer you pay into a pension pot, the more money you will be able to get out as an income once you retire. This is why many people will not retire early, as they want the benefits of having a higher income while they are retired.

Smaller Income

Giving up work to retire will mean that you will normally have a lower income. Unless you are able to access other income such as pensions or other funds, you will be likely to have a lower income. Even if you do have access to a pension, it still may not pay you as much income as you will get from a job. It is certainly worth calculating what change to expect in your income and thinking about how you will manage on that income, both in the short term and the long term. You may have been finding that you have been managing well anyway and not spending all of your income and so already know that you will cope well, which is why you made the decision to retire early, but unless you are confident it is worth giving it some thought.

Reduced savings

If you retire early, it is likely that you will reduce your income and this will mean that you will not be able to afford to put so much money into a savings account. You may feel that you have accumulated enough savings or that you will not need them, but it is worth not being blasé about this. As we get older we sometimes need to spend out money. We may need to adapt our home so that we can remain living there with reduced mobility or move to a retirement home, which tend to be expensive. We may even need to move to a care home and these can be very expensive. If you want the best care, then you will have to pay more money for them and so having money available for this can make a big difference.

Reduced Social Time

When we retire we may miss out on socialising with people, which is something most people will do at work. It has been shown that having less social time can lead to a detrimental effect on health. It can lead to loneliness or to conditions such as depression or dementia. Of course, many people will make up for the loss of social contact at work by seeing more of their family, doing volunteer work or joining clubs and doing other activities.


Of course, there are many positives of retiring as well, but it is worth thinking about the disadvantages as well. It is really important to make sure that you are financially stable and that you will have enough income in the short and long term as well as having some savings in case you need to spend lump sums of money. Socially it is also important to make sure that you have ways to combat loneliness and ensure you have enough social time to help you to stay healthy.