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By Dr. Leif Dahleen of Physician on Fire, WCI Network Partner

Yes, there are risks when retiring early, and people are quick to point them out when a person makes that choice. What about the risks of not retiring early? Those don’t get as much play.

I suppose ordinary people are not like surgeons at grand rounds. That is, they don’t particularly enjoy talking about morbidity and mortality.

However, there is a very real risk of illness, injury, and death, and the closer we get to a typical retirement age, the higher those risks are. We can protect against the financial implications of them with products like term life and disability insurance, but how do we protect against those things destroying our retirement plans?

The best way to maximize the odds of enjoying the long, healthy retirement you’ve got in mind is to retire as soon as you possibly can. That’s just the math. The longer you put it off, the more likely you are to miss out on the ideal post-career life you’ve envisioned for so long.


The Risks of Retiring Early

I should start by pointing out some of the obvious risks you accept when you do retire early. There’s a chance you could run out of money. Working as little as one more year can dramatically decrease your chance of failure. Your Social Security checks will be smaller. Plan accordingly and forecast your future benefit so you know what you’ll be giving up by retiring early. You might get bored. OK. Go back to work, then.

If you are unprepared for an abundance of free time to hit you all at once, any number of issues can arise. Relationships can be strained. Your social life may suffer if work provided most of it for you. You might take up dangerous hobbies that you never had time for before. It is best to go into retirement with a plan for your time, money, and relationships. You know, retire to something (or on something).

More information here:

Are Physicians Who Retire Early Abusing the System That Made Them Rich?


How Soon Do You Plan to Die?

You will definitely die. So will I. We just don’t know when. While the question posed sounds morbid, it’s just another way of asking how long you expect to live.

There’s plenty of data out there to show how likely a person your age is to live another year, decade, or 50 years. There’s a tiny, but non-zero chance that I may not survive the two days between writing and publishing this article. Conversely, I might live to see my 116th birthday, but that outcome is similarly very unlikely.

Flowing Data uses the Social Security Administration’s data set to show a range of possibilities with individual outcomes randomly generated based on probabilities.

Here’s what I got from a few minutes of running the simulation on Fast mode at age 45. I encourage you to run a simulation of your own with your gender and age, watching the gray balls fall where they may.

probability for years left

Based on my results, it appears that the mere contemplation of one’s own mortality may contribute to increased odds of dying within the next year, but I’ll chalk up that “fat tail” on the left to randomness.

There’s a 4% chance I won’t see my 55th birthday. Those are 1 in 25 odds that I’ll die in the next decade. The odds of dying in the decade after that are more than double, and I have a combined 13% chance of dying in the next 20 years before celebrating my 65th birthday. The odds of living to 85 are stacked against me at a 61% chance of death to a 39% chance of still being alive. The statistics tell me that I’ve got only an 8% chance to live to 95 or older.

Now, it’s important to realize that these numbers are based on me being average, and my mother has assured me for 45 years that I am certainly above average.

Kidding aside, if you’re a non-smoker with a normal BMI and a family history of longevity (all of which are true for above-average me), you’ve got a decent chance of beating the odds by maybe 5-10 years.

When it comes to your own personal mortality, though, the percentages aren’t all that helpful. You’re not going to be 39% alive at age 85. You’ll either be dead or alive. A 96% chance of making it to 55 doesn’t matter if you fall from a mountain peak at age 52.

The later you retire, the more you increase the odds of having a short or nonexistent retirement.

More information here:

Early Retirement and the Likelihood of Regret

Is FIRE Really Just an Empty Goal?


Declining Health

While it’s true that your presence among the living is binary—you’re alive and kicking or you’re not—your quality of life will vary along a wide spectrum. A major factor in your quality of life will be your ability to do the things you want to do in retirement, and your physical condition is a key contributor.

I didn’t start running for exercise until I was in my early 30s, and I’ve never been terribly consistent with it. In the first 10 years or so, the main things that kept me from running regularly were a busy work schedule, two young kids, and a lot of competition for my time. Also, laziness.

However, in the last few years, despite having plenty of time to jog, I’ve had to stop running for weeks at a time on at least three occasions. There was the stress fracture in my foot that made itself abundantly clear at the conclusion of a half-marathon in Barcelona. When I healed from that, some medial knee pain (possibly pes anserine bursitis/tendinopathy) sidelined me for a few weeks. Currently, I’m dealing with pain in the ball of my foot where my 2nd metatarsal meets the toe.

And I’m in my mid-40s.

All sorts of maladies can and will arise that can limit your ability to run long distances and also make it difficult or impossible to perform regular activities of daily living. The older you get, the more likely such impediments become. It may not be one injury or diagnosis that slows you down but the aggregation of small annoyances that add up to you becoming incapable of doing the things you wouldn’t have thought twice about doing when younger.

A seven-mile hike might sound like a good idea if it weren’t for your arthritic right hip, the extra 25 pounds you’ve accumulated, your sensitive GI tract combined with the street tacos you enjoyed for lunch, and the achy back you’ll probably get from the two-hour drive to the trailhead. Not to mention the fact that the cell phone reception out there is lousy, and the likelihood of some sort of emergency seems to have increased right along with your waistline as you aged.

One of those factors alone may not dissuade you, but the combination leaves you at home, comfortably close to a toilet, television, and telephone.

The younger and healthier you are when you retire, the more things you can check off your bucket list rather than crossing them off because they’re no longer feasible.

More information here:

Getting Rich and Ripped: How WCI Principles Help Build Wealth and Improve Your Physical Fitness


The Specter of Cognitive Decline

While you can expect your body to decline physically over time, your mind may remain sharp for decades to come. Or maybe it won’t.

Even worse, you’ll be the last to recognize it if cognitive decline begins to impact your decision-making abilities. An ailing brain may not realize its own failings.

Sadly, the FBI reports that elder fraud, as in financial scams that target the elderly, leads to losses of $3 billion and growing in the US every year. Senior citizens are targeted because they are more likely to have accumulated assets; they may be overly trusting and, perhaps most importantly, they may not have the mental faculties that they once did.

Alzheimer’s and other forms of dementia are more likely to affect individuals beyond the normal retirement age, but early-onset dementia absolutely afflicts those in their 40s and 50s.

Retiring early does nothing to protect you from cognitive decline, and it could possibly contribute to it if you become a firmly-planted couch potato. But if you keep your mind active, you should have more years with your wits about you to look forward to when retiring young.

early retirement


No Time to Recover from Financial Stressors

When your retirement date is based upon a standard retirement age and you’re saving and investing accordingly, you could be in rough shape if the economy doesn’t cooperate.

For example, if you expect to have the money you’ll need to retire by the time you’re 65, a layoff at age 55 becomes a financial emergency. A bear market leading to a harsh sequence of returns in the final years you planned to work could force you to work several years longer than you’d like. If you’re in your 40s, you deal with it. If you’re in your 60s, losing a few years of your retirement could be a serious hardship. You don’t know how many good years you’ve got left!

Even if you’re not dead set on an early retirement, becoming financially independent at a reasonably young age should be a life goal. Having the ability to leave work without major financial consequences can make so many potentially disastrous events much, much easier to navigate.


Your Job May Become Less Fulfilling

I don’t know whether to be envious or sad when I hear that someone loves their job. Sure, it’s great to get paid to do something you thoroughly enjoy doing, but on the other hand, it’s an unrequited love.

For the love affair to last, two conditions must remain true.

First, the job cannot change in a way that causes you to love it less. Any change in your work schedule, obligations, compensation, benefits, or work colleagues that negatively impacts you can leave you feeling less amorous.

Second, you and the things you value and prioritize must remain indefinitely steady. The odds of this being true over a career lasting even a decade or two are on par with the chances that I fail to survive long enough to see this article published.

Think about who you were five, 10, or 20 years ago. What mattered most to you then? Who were the most important people in your life? How did you balance a career with family, hobbies, and other outside interests? How has that changed?

Being excited about or even content with the job you’ve got is a lot better than despising the work you do. Just realize that as time goes on, the odds of remaining in love with your job will likely diminish. With a shred of luck and some proper planning, your relationship with your career will not be of the “’til death do us part” variety.

It’s not supposed to be.


Lost Opportunity for Low-Tax Years

If you retire in your 60s, you’ll be collecting Social Security within a decade, and by age 73 (or by age 75 in the year 2033, thanks to the Secure Act 2.0), you’ll be required to withdraw RMDs from tax-deferred retirement accounts.

That leaves little time to do Roth conversions in a low tax bracket. You may never reap the benefits of being in the 0% long-term capital gains bracket (which also applies to qualified dividends).

It may sound silly, but one aspect of full retirement that I most look forward to is the possibility of paying very low taxes or converting hundreds of thousands of tax-deferred dollars to a Roth IRA while remaining in the 24% federal income tax bracket. Many early retirees qualify for an ACA subsidy to help pay for health insurance, a benefit that few standard retirees will ever get.

The sooner you retire, the more years you’ll have to make low-cost Roth IRA conversions, potentially pay no tax on your capital gains and qualified dividends, and smile because you’ve got something in common with Jeff Bezos and Elon Musk.

More information here:

Taxes in Early Retirement


Missing Out on Time with Loved Ones

If you retire at 65, will your parents still be alive? Based on the actuarial tables, it’s not all that likely.

If you’re working when they fall ill, how difficult will it be for you to be at their bedside on short notice? What if they need assistance for weeks or months? How will you make that happen? Looking at the other side of life, if you have children, how does work affect your ability to spend time with them and be there when you’re needed most?

Think about how you might travel differently if you didn’t have a job to get back to. Imagine how a year or two of worldschooling as a family would compare to the usual routine.

We also have loved ones beyond our blood relations. Friends get married. Friends get divorced. Friends invite you to join them for a coffee or a beer, for a boat ride or for an amazing vacation.

If you’ve got a full-time job, you will rightfully suffer from FOMO— the fear of missing out. The less you have to work, the more you can join your friends and family when you’re invited or needed.


You Only Live Once

Hashtag YOLO. I get it. You only live once, so you should live life to the fullest!

I’m on board with the concept but often disappointed with the implementation. YOLO is often used as an excuse for spending excessively while ignoring the future. That’s the wrong approach. Since you only have this one precious life to live, you should absolutely enjoy it now while also putting yourself in a position to make the most of whatever number of remaining years you’re granted.

Imagine how much easier it would be to live life to the fullest if you had another 40-60 hours to do as you please every single week. If your dream life consists of spending most of your days in a clinic, cubicle, or cath lab, perhaps your career has you living life to the fullest already. If you’re like me, though, you’ll find it’s much easier to embrace a #YOLO mindset when your schedule is wide open.

You don’t know how many years you’ll get, you don’t know how well your body and mind will hold up, and you know that time is a precious and non-renewable asset. Take a page from the FIRE movement and make the most of yours.

Did you take the plunge on early retirement? What ultimately made you decide to do so? If you haven't FIRE'd yet but plan to, what's your biggest worry about early retirement? Comment below!