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What are the pros and cons of retiring early?

  • Highlights

  • Spending quality time with family

  • Pursuing your hobby or starting your venture

  • Loss of regular income with early retirement

  • More savings for daily requirements

Retirement is often acknowledged as the golden phase of life. It is that phase when your major responsibilities are completed, and you can look forward to doing things you've yearned for long.

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Earlier retirement revolved around a fixed age, 60 being the most common. However, today most people seek an early retirement. Retiring early has its own pros and cons. Given below are some of the advantages and disadvantages of early retirement.

Advantages of Early Retirement

- Spend More Time with Family

An early retirement gives you chance to spend more time with your family. When you are in an active job, it’s difficult to spare time for family and friends. With retirement, you can get enough time with your family

- Pursue Your Hobby

Taking a complete break from work, gives you ample time and scope to pursue your hobby. Be it painting, photography, travelling, playing, etc.

you get enough time to pursue these pleasures when you don’t need to rush to office daily.Retirement provides you with more time and scope for pursuing your hobbies

- Float Your Own Venture

Additional Read: 5 Meaningful Ways To Use Your EPF Money

An early retirement gives you the golden opportunity to plan and float your own venture. Most people opt to retire early from work, to start their own business. You get enough time to plan out everything and be your own boss. Hence, you can easily pursue your passion and embark on a new journey.
If you’re seeking an early retirement for starting your venture, invest in a low-risk, high-return investment. You can invest in fixed deposits, to ensure higher stability along with greater savings.

Disadvantages of Early Retirement

- Loss of Regular Income

The pay cheques stop, when you retire early. Thus, there is a loss of continuous regular income. You should stay on the top of your finances, to maintain your lifestyle and address only basic necessities of life.
There may be occasions where your children need financial support before they become independent and an early retirement would make it a little difficult for you to support your children financially.

Additional Read: Tips To Ensure You Have Regular Income After You Retire

- Save More to Meet Ballooning Expenses

With the loss of regular income, you need to save a lot more to meet the day-to-day expenses. With inflation pushing up the cost of living, you must save adequately, to address your daily and sometimes unexpected needs in form of medical emergencies. Only with substantial savings in your kitty, you can meet the ballooning expenses.

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- High cost of Health Insurance

On retiring early, you don’t enjoy the health cover provided by your employer. Considering rising medical costs, a health insurance is an absolute must these days. However, availing a health insurance at a later stage of your life will command a high premium with various terms and conditions.
Thus, early retirement has its own pros and cons. You can make it a beautiful phase of your life, by building a large retirement corpus through regular savings.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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