All too often, myths about retiring early shift the way people plan for retirement. The myths can change pre-retirees' decisions and negatively affect their golden years.
These decisions can swing in both directions, too. You might continue to work a job you hate so you can afford to retire on time, or you might leave your job too soon, thinking you can live only on Social Security.
Take a look at these 12 common myths about early retirement to help you plan for both the retirement you want and need.
Eliminate your late tax debt
Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.
Easy Tax Relief could help you lower or get out of your tax debt for good. They’re well respected in the industry and have been recognized for their ethical standards when dealing with tax debt. While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.
Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.
Fill out this form to get started
You will pay fewer taxes
![calculator and lots of twenty dollar bills on application form at table](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/02/calculator-with-twenty-dollar-bills-on_application-form.jpeg)
Just because you retire doesn’t mean you’re off the hook for taxes. Some pensions are taxable on the federal level, and withdrawing from your 401(k) can increase your tax burden.
If you have other income, like from dividends or interest payments, some of your Social Security benefits may also become subject to tax. You won't keep more money in your wallet on taxes just because you retire.
Where you live can also impact your tax burden. Some states impose income tax on retirement income, and others don’t tax income at all. If you decide to move in retirement, you could end up paying more than you plan for.
Retiring will make you happier
![black businesswoman using a smartphone in office](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/happy-black-businesswoman-using-a-smartphone-in-office.jpg)
Some people choose to retire because they think it’s the only way to find happiness. This isn’t always the case. You might have hated your job but find yourself still unhappy during retirement.
If happiness is a driving factor for wanting to retire early, consider whether having a job is really why you are miserable. Working remotely, starting a business, or relocating might provide a better result.
You will run out of money
![clock piece showing time on one hundred dollar bills showing time is money concept](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/clock-piece-on-one-hundred-dollar-bills.jpeg)
While it is true that running out of money during retirement is a possibility, you can take the necessary steps to ensure financial security while you live out your golden years. You can start saving early, pay down debt, and budget wisely before you retire.
You can also continue making money during retirement if you made wise investments or secured passive income streams before you took the plunge.
Some retirees choose to open their own businesses or rent properties for additional income too. Being retired doesn’t mean you can’t ever make more money. If you add money to your savings now, you can be in a much better position for retirement later.
Earn $200 cash rewards bonus with this incredible card
There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.
The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.
This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 20.24%, 25.24%, or 29.99% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.
The best part? There's no annual fee.
You won’t have health coverage
![male healthcare nurse smiling while holding tablet at clinic with other colleagues in background](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/male-healthcare-nurse-smiling-at-work.jpeg)
Retiring early can cause you to lose health insurance through your employer, and in most cases, you won’t qualify for Medicare until you reach 65.
But that doesn’t mean you won’t have insurance. If you retire early and lose your benefits, you can purchase a plan through the Health Insurance Marketplace or directly with a carrier.
You can also use a Health Savings Account (HSA) to help cover medical expenses when you retire early. HSA distributions are not subject to federal taxes when used for qualified expenses.
You’ll be lonely
![lonely man walking on sandy beach shore](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/lonely-man-walking-on-beach.jpeg)
Loneliness during retirement is often depicted in movies and on TV, but retirees can socialize like anyone else. When you’re retired, you get to make all the decisions about how to spend your time.
If you mainly socialize at work, you can spend time with others by volunteering or participating in activities you’ll now have the time for.
Keeping your loved ones close before retirement can also reduce loneliness later. If loneliness is a concern, consider retiring somewhere close to the people you care about.
You can live off Social Security
![social security and retirement income cards on top of papers](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/social-security-and-retirement-plans-on-papers.jpeg)
Some people think Social Security retirement benefits will cover all their expenses in retirement. Social Security was not designed to replace the income you earned while you worked.
You will need to supplement your Social Security benefits with other income to maintain your pre-retirement lifestyle, and retiring early might not be an option if you haven’t planned ahead.
Some people choose to invest or continue working after retirement in order to make extra money and stretch their funds. Regardless of your plans, a healthy amount of savings is essential for ensuring you can keep up with your cost of living.
You won’t be able to work
![freelancer sitting at table working from home using tablet and keyboard](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/freelancer-man-working-from-home-on-table.jpeg)
Not all retirees quit working. Some continue working full-time, others part-time, and some even return to school and start new careers. You can work as little or as much as you like once you retire.
However, keep in mind that continuing to work can increase your tax burden. But it can also help you save more money and fill your time if you’re bored.
You’ll experience a lower cost of living
![couple sitting at table using laptop to sort out finance chores with papers](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/couple-doing-finance-work-on-laptop.jpeg)
Retiring doesn’t magically lower the total cost of living. That could continue to rise. Your routine and daily expenses may change, but you will still need to pay for your house, food, and activities.
You may no longer need to commute to work, but you could find yourself spending just as much money filling your time with entertainment or commuting elsewhere.
Inflation will impact your cost of living over the next several years, and so will your location. Relocating to another area can stretch your dollar further or cause your savings to deplete faster.
You’ll have too much time
![lazy young man lying on couch in lounge and using laptop](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/lazy-man-lying-on-couch-using-laptop.jpeg)
There is no such thing as having too much time, even in retirement. You will just have the freedom to decide what to do with your time.
Retirees can do the same things non-retirees can, including working, volunteering, and enjoying hobbies. However, retirement is also a great time to pursue new passions or hobbies that you never had time for.
You might discover a new activity or interest that brings you joy and fulfillment. Time is a luxury that many working people would like to find more of.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
You won’t have money for extras
![woman standing at mall holding shopping bags in hand](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/woman-holding-shopping-bags-in-mall.jpeg)
Retiring early doesn’t mean you can never afford to spend money on extras. While you should spend wisely, you can account for these extra expenses when planning for retirement.
You can determine before retirement how much you will need to save for the lifestyle you want, and then create the right budget for you.
You won’t need to save anymore
![businessman writing on notepad while saving pennies in glass jar](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/businessman-saving-pennies-in-jar-while-writing.jpeg)
You never know what emergency expenses might arise, even after you retire.
Continuing to save during retirement can help you prepare yourself financially for any unexpected events — and improve the chances of your retirement lasting longer than you had planned.
You can save money whether or not you continue working. If you can’t put away extra money every week, you can at least save money by budgeting more carefully to make your money last longer.
It’s always best to wait to retire
![couple having each other back while smiling at beach](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/couple-having-fun-at-beach.jpeg)
Retiring later can result in larger Social Security benefits and more money in savings, but it isn’t always the best idea.
If your job impacts your physical or mental health, it might make sense to leave earlier. Other people find it best to retire early when they need to care for loved ones or want the time to start their own business ventures.
Bottom line
![couple sitting at table shaking hand with female finance advisor](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/07/couple-shaking-hand-with-female-financial-advisor.jpeg)
Regardless of your retirement plans, preparing as early as possible is essential. If you make the right money moves now, it could allow you to retire early.
You might find it best to work with a financial advisor to assist in your retirement planning. If you choose to go it alone, educating yourself and estimating your benefits can give you a better understanding of what your retired life will look like.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 20.24%, 25.24%, or 29.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.