The Hidden Risks of Retiring Too Soon
1. Shrinking Social Security Checks
If you retire at 63, you’re locking in a permanent cut to your Social Security benefits. Claiming before your full retirement age (66 or 67, depending on your birth year) can slice your monthly check by as much as 30%.
Think about it: if you’d qualify for $2,000 a month at full retirement age, retiring early could bring that down to $1,400. That’s $600 less—every single month—for the rest of your life. Multiply that by 20 or 30 years, and you’re leaving a huge amount of money on the table.
2. A Healthcare Gap That Costs Big
Medicare doesn’t start until 65. Retiring at 63 leaves you with two years to fill—and private health insurance is not cheap. Premiums, deductibles, and out-of-pocket costs can add up fast. For some, this alone makes early retirement financially impossible.
3. Risk of Outliving Your Savings
Retiring earlier means stretching your money longer. With Americans living well into their 80s and 90s, a 63-year-old retiree could be looking at 25 to 30 years of expenses to cover. That’s a long time, especially if your savings aren’t where you hoped they’d be. And let’s be honest—most people admit they’re behind.
4. Fewer Years to Save and Invest
The early 60s are often peak earning years. Walking away at 63 means giving up extra years of savings and investment growth. Even two or three more years of contributions to a 401(k) or IRA can make a major difference when you finally do stop working.
What’s the recommended age?
