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Thinking Of An Early Retirement? Here Are 3 Reasons You Should Not Retire Before 66

It is estimated that many working Americans stop working by age 63.  Chances are, anyone who has been in the workforce long enough, has dreamt of retiring early. Given that you can file for Social Security arrangements at age 62, some call it right then and there.

Without a doubt, there are benefits to retiring early. For example, some may be pushed to leave after a potentially stressful career, or maybe you just want to enjoy more of your free time while you’re young.  In reality, however, early retirement isn’t always as glamorous as it seems. Here are three compelling reasons why you should not retire (to exit the workforce permanently) until you reach age 66.

1. You’ll reduce your Social Security benefits

Do you know how your social security benefits are computed? They are calculated based on your top thirty-five years of earnings. Yes, that’s true. Once a base benefit amount is established, you can raise or lower that base figure depending on when you first file for Social Security.  So why are we emphasizing you to wait until your full retirement age? It is because at this stage, you won’t face a reduction in benefits and you will collect your base payment amount in full. On the contrast, filing early will lower your benefits for the remainder of your lifespan.

Here’s when you’ll be eligible to collect your full social security benefit amount based on the year you were born:

Year of Birth|Full Retirement Age

1943-1954            66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960            67


How much will claiming Social Security benefits early cost you? For up to three years, you will lose 6.67percent of your full benefit amount, and then 5% a year thereafter.

2. You’ll have a longer retirement to fund

The problem with retiring before 66 is that you will have less saving for the coming years and you will also be compromising your financial future by quitting your job a few years ahead of schedule.

3. You may get bored

For many of us, the idea of retiring early and enjoying too much leisure (additional free) time may not work well and can backfire in a very big way. A new study revealed from the Institute of Economic Affairs concluded that 40% of retirees are more likely to suffer from stress and clinical depression than younger workers and that retiring sooner could be the biggest risk factor for dying prematurely.

If you have any concerns related to your retirement plans or savings, visit us at for our expert advice.

Read more: These Three Resolutions Combine Saving For Retirement And A Wish For The Future 

Why Is Funding Retirement More Necessary Than You Think?

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