5 Best Reasons to Retire in 2024!

Retirement, especially when approached from a life transition standpoint, has long been a challenging subject. But the financial reality today points to this: if you can swing it, retiring early may just be your smartest move.

Retirement anxiety can partially stem from thinking there’s not enough money to accomplish it: the Federal Reserve’s 2022 Survey of Consumer Finances indicated that just 54% of American families have a dedicated retirement account.

Yet, that does not mean other factors — from a paid-off home to a lucrative family business — will not have a positive impact. What’s more, numbers outside the bottom line should guide your critical decision as well.

Let’s examine the five top reasons to retire this year in 2024:

1. Your home is paid off

If you bought a home in January 1994 for $250,000, for example, that same home 30 years later in 2024 might be worth triple, according to data from the Federal Housing Finance Agency.

A $750,000 home without a mortgage means you have exactly that much in equity. Retirees can leverage equity by moving into a less expensive home or simply renting an apartment or condominium while letting all the equity grow via your investments. A portfolio with an 8% return compounded annually will grow from $750,000 to more than $1.1 million in just five years.

As we edged closer to retirement over the last decade of my working life, my wife and I have concentrated on our net worth statement, which allows us to review our long-term goals and ensures we are on track for achieving our retirement targets. Net worth is the total of our assets (things we own) less our total liabilities (things we owe). 

The key assets that lead to a higher net worth include such things as home ownership, retirement savings, and investments. Hopefully, as you get older, your assets are growing while your liabilities decline to the state of nirvana with no debt. Through saving efforts and tracking our monthly budget, we were able to achieve this debt-free nirvana in 2017 when we paid off our mortgage.

2. You have health concerns

Let’s face it: an eight-hour workday means spending more time with colleagues than your own family. The average person spends over 90,000 hours at work throughout their lifetime or one-third of their lives working . In addition, life expectancy in the U.S. is dropping: 73.5 years for men and 79.3 years for women, according to 2023 data from the U.S. Centers for Disease Control and Prevention.

At this point in life, time is a precious commodity. Health concerns can be a strong motivator to retire early, but it’s critically important to ensure you have enough money set aside.

If you can, consider enrolling in a health savings account (HSA) to cover prescription costs and any surgeries.

According to the CDC, heart disease causes about 659,000 deaths annually in the US, which is one in every four deaths. Heart disease is the leading cause of death for people of most racial and ethnic groups in the United States. High cholesterol, high blood pressure, and smoking are key risk factors for heart disease.

Coming from a family with a history of heart disease, I am currently on medication due to meeting two of the three risk factors (since I am not a smoker). Based on my family history, I wanted to retire as early as possible to spend more time exercising. 

3. You have invested wisely for years

Developing great financial habits, such as spending less than you make to maintain a diversified portfolio, are the products of discipline. Factor in other revenue sources (including Social Security), and you may just find yourself in a desirable position to retire now. But remember, the average monthly Social Security benefit for a retired worker is only $1,909 (as of January 2024). So, that amount could be far less if you have not contributed to the plan for the required 35 years of earnings that Social Security is based upon.

If you want the full benefit you are owed based on your work history, you must wait until your full retirement age (FRA) to sign up. Social Security payments are reduced every month you claim benefits from age sixty-two until your FRA.

If you sign up at sixty-two, which many Americans do, as shared below, you only receive 70 percent of your full benefit if your FRA is age sixty-seven (or 75 percent if your FRA is age sixty-six).

You can search the Social Security website for your full retirement age to determine the timing of your benefits. 

As previously discussed in prior articles, you can delay benefits past your FRA if you desire larger monthly checks. The Social Security Administration increases your benefit every month that you delay benefits until you reach age seventy. If you wait until your maximum age of seventy to start collecting your benefits, that equates to a yearly increase of 8 percent, which is an attractive guaranteed return.

Start receiving paid survey opportunities in your area of expertise to your email inbox by joining the All Global Circle community of Physicians and Healthcare Professionals.

4. You have always dreamt of traveling more

When you retire early, you free yourself to buy adventures that become major sources of satisfaction and personal growth. My advice is do it while you can but be strategic about it. Consider traveling on a budget by scheduling vacations during off-seasons when prices are lower and crowds disappear.

You might also want to prioritize trips that require more physical exertion first (like hiking the El Camino de Santiago) when you are in your 50s versus your 70s.

Thomas Gilovich, a psychology professor at Cornell University, reached a powerful conclusion at the end of a 20-year study on wealth and lasting happiness: buy experiences, not things.

My advice is to focus on experiences, spending time with others, and things that save you time (e.g., cleaning your house, mowing your lawn) and increase your happiness.

Sure…some of the past expenditures by my wife and I have been a bit frivolous. If the spending was reasonable and increased our happiness as a couple, this was money well spent and easy decisions for us. For example, we love spending money on travel.

Our favorite vacations have been going to college basketball games during March Madness in various cities for over twenty-five years. Also, we have shared amazing retirement experiences in Hawaii and Canada as well as numerous trips to the beautiful, serene beaches of the Outer Banks (OBX) of North Carolina. We also enjoyed many trips with friends and family, such as fall trips to the beach.

5. You are considering a partial retirement

If you find fulfillment, community and purpose in your career, consider going from 40 hours a week down to 20 hours. You just might find the work/life balance will free you up for other things you love and the extra income for a few extra years won’t hurt your retirement portfolio.

Research from KornFerry shows that, post-pandemic, one in four people aged 65 and older do not plan to fully retire. If you are fortunate enough to work because you want to (and not because you must), a partial retirement could allow you to have it both ways.

There are also a number of part-time jobs that retirees may desire to stay connected and give back to their community.

In her current phase of retirement, my wife assists with local social service agencies in Philadelphia, like Broad Street Ministries, which offers “radical hospitality” to improving the quality of life to our Philadelphia homeless neighbors in need. She works three days a week and finds the “giving back” aspect of this work to be more satisfying than the part-time income it provides.

While I stay busy sharing the life lessons from my recently published book in podcasts and talks, I also am fortunate to be writing weekly personal finance articles for the amazing readers of the Physician on Fire (POF) website. 

Final Thoughts

In summary, deciding when to retire from your busy career is a major decision for all of us. Have you ever missed an event, trip or important family event because of work? Or felt that you were more irritated with your partner, spouse or child because of work stress? 

You are not alone. According to the American Institute of Stress, more than 75% of American workers say job stress affects their personal relationships.

If you feel like your job has taken over your life and you are struggling to keep up with your duties as a partner or parent, it might be time to consider leaving the workforce for good.

Retirement is a significant milestone and marks the transition from work to a freed-up schedule. If you plan to retire in 2024, a good starting point should be to lay out a road map.

This typically includes thinking about where your income will come from when you will not be receiving a salary.

Share your plans to retire in 2024 in the comments below.