What Are the Five Types of Financial Risk Management? - TEST
If you work in tech, there’s a good chance a meaningful portion of your net worth is tied up in company stock—often through RSUs, ISOs, or...
true Austin King
Associate Director of Advisor Marketing
Torrance, California
Retiring before 50 sounds ideal, but is it practical? Learn about financial challenges, career impact, and lifestyle changes before making the leap into early retirement.
Retiring before 50 is often seen as the ultimate financial goal—more time for travel, hobbies, and personal pursuits. But early retirement isn’t always as ideal as it seems. It requires a much larger savings cushion upfront, and stepping away from the workforce too soon can create financial and lifestyle challenges:
Before deciding to retire early, it’s important to weigh both the financial and personal considerations. This guide explores the different factors to think about before stepping away from work at an early age.
If early retirement is the goal, the first step is calculating how much savings will be needed to maintain a comfortable lifestyle. This “retirement number” depends on factors such as income, expenses, and long-term financial goals.
A longer retirement means more savings are required for several reasons:
While these challenges don’t make early retirement impossible, they do highlight the importance of careful financial planning. Additionally, a huge portfolio withdrawal could potentially limit some of the decisions you make during retirement.
For example, if you're planning to buy a new home and use the equity from your current home—along with a significant portfolio withdrawal to avoid taking on a mortgage—how would this impact your long-term financial security? Would reducing your portfolio balance limit your ability to maintain your current standard of living in the future?
This is just one of many important factors to consider when deciding whether to retire early or not.
Retiring before 50 can also have lasting effects on career growth and future job prospects. Many professionals reach their peak earning potential in their late 40s and 50s. Leaving the workforce at this stage can mean missing out on:
For those who later decide to return to work, gaps in employment history and shifts in required skills may make it difficult to regain previous earning power.
Work is more than just a paycheck—it also provides structure, purpose, and social interaction. Retiring early may seem appealing, but some retirees find themselves struggling with:
To counter these effects, early retirees should consider ways to stay engaged—whether through volunteering, hobbies, travel, or part-time work.
While early retirement isn’t for everyone, it can be a great option for those who are well-prepared. Some signs that early retirement may be a viable choice include:
A well-funded portfolio can provide the necessary income for decades. A financial advisor can help estimate sustainable withdrawal rates and evaluate how different retirement timelines impact long-term financial health.
With private insurance costs rising, healthcare expenses can consume a significant portion of a retirement budget. Early retirees should plan for insurance premiums, deductibles, and long-term care needs, which often exceed the normal rate of inflation.
Market downturns, inflation, and family emergencies can all impact retirement savings. A strong emergency fund can help manage financial stability when unexpected costs arise.
A solid financial plan includes projections for different economic conditions. By running various scenarios—such as inflation spikes, increase in taxes, or lower-than-expected returns—financial advisors can help determine whether an early retirement strategy is realistic.
Whether retiring before 50 or working into later years, a clear financial plan can help bring confidence and flexibility to the process.
EP Wealth provides a structured approach to retirement planning:
To explore retirement planning strategies and build a financial future that aligns with your goals, connect with an EP Wealth advisor today.
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If you work in tech, there’s a good chance a meaningful portion of your net worth is tied up in company stock—often through RSUs, ISOs, or...
Retiring before 50 sounds ideal, but is it practical? Learn about financial challenges, career impact, and lifestyle changes before making the leap...
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