January 17, 2022
3 Big Reasons Early Retirement Could Cost You | Personal Finance | independenttribune.com – Independent Tribune

3 Big Reasons Early Retirement Could Cost You | Personal Finance | independenttribune.com – Independent Tribune

2. Your savings will need to support you for longer

The longer you go without a paycheck, the more savings you’ll need to provide sufficient support. You don’t want to start making withdrawals early in life when you leave work and then find yourself with too little cash in your late 70s or beyond when it’s too late to find another job and start earning income again.

To have enough money for early retirement, you’ll need more savings or will have to make smaller withdrawals — or both. This can mean sacrificing both during your career when you’re trying to bulk up your nest egg and later in retirement when you can’t take out as much money.

3. You may have to cover expensive insurance costs

Seniors don’t become eligible for government insurance through Medicare until they reach the age of 65. Early retirement before then will necessitate getting coverage elsewhere because going without health insurance is too risky as you get older.

Options for senior health coverage can be limited. You may be eligible to stay on your employer plan under COBRA for 18 months after leaving your job. But depending on how early you retire, this may not provide coverage for long enough. Once you go on COBRA, any premium subsidies your employer was providing typically disappear, so your health insurance costs could become much higher.

Source: https://independenttribune.com/business/investment/personal-finance/3-big-reasons-early-retirement-could-cost-you/article_3bad9f33-ac1a-5160-ae9e-578745401b3b.html

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