If you are planning to retire from a full-time working job at 60 or even sooner, then it may require tradeoffs such as moving to a smaller home and picking up hobbies or choosing new ones. Early retirement has its share of benefits, offering both monetary and mental peace.

Let us have a look at some monetary benefits of early retirements

Pensions
It is one of the top early retirement benefits. If you have worked for the same company for many years, you might have a guaranteed pension if you are a member of a labor union. However, if you are over 50, then you can expect the partial pension benefits to rise with each additional year if you wait to retire.

Retirement plans
It is one of the major early retirement benefits. You can withdraw or use the savings of retirement plans such as 401k plans and other retirement arrangements as early as 50 years. You are however liable to pay a special 10 percent tax on the savings if you disburse the retirement plans prematurely.

Social security
For the people who are born after 1937, the full retirement age ranges from 65 to 67. You can get 75 percent of the monthly benefit from your social security savings if you retire at the age of 63. However, you can get maximum benefits through health coverage even if you worked part-time or as a consultant after retirement. This will delay the need for using social security retirement benefits.

While early retirement might have its own share of benefits, you always need to plan ahead financially. Here are some things that you need to keep in mind when looking at workplace pensions:

• If you retire early due to ill-health, there may be special terms in the retirement plans that might allow you to go for an enhanced pension.
• If your current livelihood is not dependent on the pension amount, it is always wise to let it build up before the retirement age which is set by the government. Withdrawing profits from a pension plan at the set retirement age will offer you maximum benefits.
• Make sure you know the rules of transferring your old pension to new employer’s pension scheme if you are planning to work part-time or change your job.

If you are a member of money purchase schemes or have a stakeholder pension, you need to remember that you will require a pension fund for a longer period of time. This, in turn, will fetch you lower pension as your income.

Other early retirement benefits

Freedom to start a new career
Not everyone plans to retire early to sit back and relax. People with entrepreneurial skills can use their work experience and resume back to their new business ideas that they might have left behind during their working years. Retired military personnel, for instance, can involve themselves with law enforcement or start a private security company.

Focus on family and hobbies
The best early retirement benefit is that an individual gets an early start on everything. This can range from picking a new hobby or resuming the one that you left due to work commitments. Working professionals tend to focus more on providing financial security to the family than sticking to their hobbies. Hence, people who retire early can spend more time with their families and take up on a hobby that they like. They can also catch up with their children who might have migrated to a different state or a different country altogether citing work commitments.

Travel
The word has become a niche for young generation and is always associated with energetic individuals willing to explore. The longer you wait, the older you get and this becomes increasingly difficult to travel places you had dreamt of while you were working. Let us not forget the health implications that might restrict you to travel. So, it is necessary to take the benefit of early retirement and travel places that you always wanted to explore.

Improvisation of health
A recent study suggested that people retiring before 60 were more healthy both physically and mentally when compared with the ones who decided to work full-time beyond 60. This was probably because they were no longer associated with work-related stress. Early retirement can be beneficial and healthier for you if you decide to work on bettering your physical and mental wellness. You can do this by involving yourself in physical exercises, yoga, and meditation.

If you still think that retiring early might not be a wise decision for you financially, then set a middle ground for the same. For instance, you can request reduced work schedule with your employer at a negotiated pay scale. This enables you to enjoy a life of a retiree and at the same time be employed. This arrangement is sometimes referred to as “phased retirement”.

Deciding when to retire can be a complex decision as it can have monetary, physical, and mental implications. Hence, it is absolutely necessary to weigh the pros and cons of early retirement and then make a decision.