9 Biggest Reasons People Retire Earlier Than Expected

Many people retire early due to choice or circumstances. Be prepared for any of these possibilities.
Last updated Nov. 24, 2022 | By Jenny Cohen | Edited By Michael Kurko
mature woman relaxing in sofa using mobile phone

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You may be surprised by how many people are retiring early because they have to or want to. In fact, retirement rates have risen in the past few years as part of the country’s Great Resignation.

Some workers left their jobs for better pay or to make extra money with a side hustle. But others were older and simply wanted to get out of the workforce earlier than they expected.

So what motivates someone to retire early? Here are the nine top reasons.

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Retiring early is a goal for many, but few of us have a plan for how to actually do it. 

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Health problems

Victor Koldunov/Adobe man feeling bad using a home blood pressure machine to check his health

A health problem or other medical issue could cause you to step back from your job earlier than you planned. Perhaps you can no longer do a job that’s physically intense or it’s harder for your to work long hours.

It’s also important to consider chronic health problems you have that could impact your future career. Thinking about how these issues could affect your work life could help you plan for when you want to retire.

Company downsizing or closing

Pormezz/Adobe woman holding personal stuff and leaving workplace

Even the most successful companies can go through times of economic struggle resulting in buyouts or layoffs. Worst still, your business could close and leave you without a job.

Keep an eye on your company’s success and bottom line to see if you can predict when you may get cut and proactively adjust before you lose your position rather than reacting afterward.

Caring for a family member

Viacheslav Yakobchuk/Adobe woman taking care of her ill grandmother

You never know when you’ll have to care for a spouse or loved one who’s dealing with a difficult health issue. And while it is important to care for someone you love, it could cut down on how long you’ll be able to work.

It may be a good idea to save some extra cash to help care for a loved one. And look into long-term care insurance, which can help you with monetary medical costs later on.

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Outdated skills

Prostock-studio/Adobe man squinting using laptop looking at pc screen

It can be difficult to keep up with the constant changes in technology or new developments in your profession. If things change too much or too fast, you could end up out of a job.

Consider taking continuing education classes throughout your career to keep your skills as sharp as possible. And if a supervisor mentions your lagging skills, ask if they can suggest ways to get you caught up and save your job.

Workplace conflicts

Prostock-studio/Adobe coworkers arguing with each other at office

Sometimes you just don’t get along with your boss and it prevents you from moving up in the company. Or perhaps the job description shifts and doesn’t cover your skill set anymore. It’s possible you just don’t want to work in an office setting anymore.

Reassess your plans if you start to feel like you’re falling behind or just don’t like your job anymore. Make a budget and see if you can retire early or if you need to find another job.

They can afford it

moodboard/Adobe senior couple celebrating retirement party with friends and family

One great thing about saving money while you’re working is you may be able to save enough to retire early.

Sit down with your current budget and your estimated retirement budget to see where you can save money now to retire later.

You also may want to consider ways to cut back on your retirement costs, like downsizing your home or finding a side hustle that can make you some extra cash when you’re retired.

They want to do something else

Daniel Laflor/peopleimages.com/Adobe senior man making a ceramic pot in a workshop

Just because you’re retired doesn’t mean you have to stop working. Perhaps you want to go back to school for a different degree or try a different industry that you’ve wanted to try.

You also may want to consider getting more involved in your community or volunteering and using your professional skills in another way to help others in your city.

Employer incentives

Blue Planet Studio/Adobe hand sending money to another business person

Some employers may try to downsize by giving incentives to employees to retire early. These buyouts could include additional money or an extension of benefits depending on how long you’ve worked for the company.

If a buyout is offered to you, sit down with your budget and figure out if it’s something you can afford to accept. Don’t forget to factor in any benefits in addition to cash that they may be offering you. Getting health insurance or a pension may make it worth your while to retire early.

Pandemic fallout

New Africa/Adobe woman putting red sign with words Closed Due To Covid-19 onto glass door

The pandemic has drastically changed the landscape for so many professions. Older Americans may have decided that working during COVID-19 wasn’t worth the risk, particularly if they had underlying health conditions.

It also could have been a factor for employees who were forced to work from home when they were better suited for an office, and retirement may have been a better option in that case.

Bottom line

Svitlana/Adobe male trader sitting by desk smiling at camera showing OK sign

Retirement can be a major life change regardless of whether you’re retiring by choice or are forced to because of extenuating circumstances.

It’s a good idea to be prepared in those cases by keeping an eye on your retirement accounts and adjusting your funds towards less risky investments as you get older.

Don’t forget to calculate your retirement budget now so you’ll know what kind of goals you need to meet and how much you’ll need when you’re ready to retire.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.