Retiring early sounds like a dream. No alarm clocks, no meetings, no commute. But for those stepping away from work before 65, the financial hurdles can sneak up fast.

Let’s break down the hidden costs early retirees face—and how smart planning helps you enjoy more and worry less.

1. Health Insurance Gap

Medicare doesn’t kick in until age 65. That leaves early retirees to either pay out-of-pocket, find private insurance, or explore ACA marketplace options. Costs can range from a few hundred to over $1,000 per month.

2. Early Withdrawal Penalties

Withdraw from most retirement accounts before age 59½, and you could face a 10% penalty—unless you know how to use strategies like SEPP (Substantially Equal Periodic Payments) or Roth basis withdrawals.

3. Sequence of Returns Risk

Tapping your portfolio in a down market early in retirement can permanently reduce your long-term wealth. Smart withdrawal sequencing, buffers, and income buckets help mitigate this risk.

4. Taxes Don’t Retire Early

Without a strategy, your income in those early years might be taxed inefficiently. Coordinated Roth conversions and capital gain harvesting during low-income years can save thousands over time.

Final Word:
Early retirement isn’t just about having enough—it’s about protecting what you have. If you’re thinking about stepping away early, we can help you bridge the gap and retire smart.