The average person doesn’t think about retiring until later in life. But there’s no rule saying you have to work until your 60s or 70s.
If you’re in your 20s or early 30s, the idea of working another 30 or 40 years might depress you. Although it’s uncommon for younger adults to retire, it’s not entirely impossible. So, if your circumstances allow an early retirement, here’s a look at 10 reasons to get out of a job while you’re young and healthy.
1. You Have a Large Enough Nest Egg
Retiring as a younger adult requires a sizable nest egg. You have a long life ahead of you, so you’ll need enough income to cover living expenses for the next 40 or 50 years. If you started a business as a young adult and sold it for a huge profit, or if you received an inheritance, you might be able to retire young if you stash this money in a high-yield savings account and commit to living off the interest.
2. You're Earning Residual Income
If you’re earning residual income every month and you’re confident this income will continue into the future, now’s the time to think about retirement. I’ve read stories about young adults who started investing in real estate or stocks in their early 20s and were able to retire from their jobs in their 30s.
3. You're Ready to Start Your Own Business
Retiring from a job gives you the time and energy to start your own business and finally do what you love. You can live off your nest egg temporarily while growing your business, and then slowly transition to living off your company’s profits.
4. You Have a Low House Payment
Housing is a big monthly expense that keeps many people working. But now might be the time to retire if you’ve paid off your house, or if you don’t have a large house payment because you’re living simple.
5. You're Anti-Debt
Even with a nest egg, some young adults don’t think about retiring because they have credit card debt, car payments and student loans. Paying off your debts and committing to never financing anything makes it possible to retire young. This means paying cash for an older car to avoid a payment, and saving up to avoid using a credit card.
6. You're Tired of Being a Slave to Your Job
Working a 9-to-5 limits your freedom. You spend the greater portion of every week tied to a desk, and your employer controls everything from how much you earn to your vacation time. If you’re tired of the rat race, retiring early lets you enjoy life while you’re still young and energetic.
7. You're Emotionally Ready to Quit Your Job
Even if you’re financially able to quit your job, consider whether you’re ready emotionally. Are you ready to say goodbye to your coworkers and leave a job you might find fulfilling and rewarding? How do you plan to spend your time after leaving the workforce? These are important questions to ask. The last thing you want to do is retire and then regret your decision. It might be hard to transition back into the workforce.
8. You Can Stick with a Budget
If you’re considering retiring at a very young age, make sure you’re able to stick with a budget. Your nest egg has to last for the next 30 or 40 years, or at least until you’re eligible for Social Security benefits or 401(k) distributions. Therefore, you have to keep your monthly expenses as low as possible and avoid impulse buys.
9. You Can Afford Your Own Health Insurance
As an employee, your employer might offer health insurance and cover all or a percentage of your premiums. After retiring young, you’ll have to pay your own health insurance. Check your budget to make sure you can afford this added expense.
10. You Don't Have Kids
Everyone has different circumstances. Some people can retire young and still afford to care for a family, while others can’t. Be realistic about your situation, and consider your future plans with regard to starting a family. Providing for a family isn’t cheap, so make sure your retirement income is enough.
See also: 5 Reasons Not to Retire Early
Retiring at an early age takes careful preparation, but it can work. If you’re committed to keeping your expenses low and stretching your nest egg, you’ll enjoy the freedom of doing what you love without being a slave to your employer.