Should You Consider Early Retirement Incentives?

Any employee, seasoned or not, considering an early retirement incentive program offered by their employer, should keep one thing in mind: early retirement incentive programs are not designed to make your retirement cushier, they’re really designed to stimulate turnover for your employer. Even so, if you were already planning to retire early, or have decided that this is a good life decision for you, than you should consider taking the incentives of an early retirement program.

Early retirement incentive programs will allow you to retire before the legal age that you are eligible to begin receiving social security and Medicare, but still receive similar benefits from your employer. Depending on the early retirement incentives being offered to you, you could retire five or six years early and receive an average of 15-20% of your annual salary including full health benefits.

Weighing the Pros and Cons of Early Retirement

There are many factors that may contribute to your decision to take an early retirement incentive program. Financially you are still taking a cut by retiring early, even though you are receiving the benefits of retirement before you would have otherwise been eligible. But maybe you’re seeking a better quality of life after working a stressful job for decades, and the cost of working those few extra years isn’t worth it to you because your time wouldn’t be spent doing something you love to do. Or maybe you want to retire from your current career to pursue other opportunities in your early retirement. All those years of experience could certainly lend themselves too many possibilities, whether they are related to your career directly or not. Traveling is another pro of early retirement. You may be in a more active frame of mind now than you will be ten years from now, so you might want to take advantage of this time and go see parts of the world that you haven’t yet experienced.

The biggest con of taking early retirement incentives is giving up a job you love, and one that you are especially good at. Maybe your employment is your main way of meeting new people, keeping you connected to a social life beyond your family. If you love your job, or just the idea of working and being around other people, and weren’t considering leaving before you were offered early retirement incentives, than it would seem that you would be better off to stay those few extra years at your full salary and continue to do what you like to do for as long as you can do it.