Incidentally, if you’re keeping all of your retirement savings in an IRA or 401(k), you’ll be penalized for accessing that money prior to age 59 1/2. And so if you’ll be retiring at an earlier age, you’ll need to have money in another account that won’t impose penalties for taking withdrawals.
2. You’ll need to pay for healthcare
Once you turn 65, you’ll be eligible for health coverage under Medicare. But what will you do before that happens?
Going without health insurance is a bad idea. A single injury or illness could leave you with thousands of dollars in medical bills, and so it’s important to secure coverage of some sort. That coverage could end up being expensive, though. And, it may not be as comprehensive as the coverage you’re used to under an employer-subsidized plan.
3. You may have to settle for a lower Social Security benefit
If you’re retiring in your 50s, Social Security will be off the table for quite some time, since the earliest age you can file for benefits is 62. But even if that’s your plan — to live off of savings until you can collect Social Security — claiming benefits at that age will leave you with less money from Social Security for life. And that could prove problematic, especially as your nest egg begins to whittle down.