Early Retirement: Benefits, Drawbacks & Is It Worth It?

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According to a survey conducted by Grant Thornton Bharat in 2025, 43% of surveyed private sector employees wish to retire before the conventional age of 60. The appeal of early retirement is gaining popularity in India as younger people seek more control over their time and priorities. 

However, while the decision to retire early has its upsides, there are also some challenges to quitting work early, especially if your total corpus isn’t enough to last you through the post-retirement years. 

Benefits of Early Retirement

Here are some key benefits of retiring early in India:

• May Be Good For Your Health

Things like chasing deadlines and working overtime can impact your mental and physical health. Retiring early can help you move away from all these pressures and focus more on your health. So, you may spend time learning yoga, mediation, or doing regular exercise to live a healthier life.

• More Time To Follow Your Passions and Hobbies

When you retire early, you may have more time to do what you love. You may now have the freedom and time to travel the world, learn how to cook, or even start volunteering. Doing this at 60 becomes challenging because of possible health issues.

• Spend More Quality Time With Your Family

Retiring early can also help you get back some quality time with your family and kids. Instead of waiting until 60 to take trips as a family, you can do it at a younger age by retiring early. 

Looking At the Drawbacks of Early Retirement 

Early retirement isn’t just a basket of perks. There are some serious drawbacks of retiring early as well:

• Your Retirement Savings Will Need to Last Longer

Retiring early means you’ll have to rely on your retirement corpus for a longer period of time. For instance, if you retire at 55 instead of 60 and live until 90, your retirement corpus of MFs, bonds, and other investments will have to last for 35 years, instead of 30. 

In between, inflation will also keep increasing the cost of living, which can lead to your corpus getting used up faster. So, early retirement may mean that you’ll outlive your retirement savings. 

• You May Have To Limit Lifestyle Expenses

According to the FIRE approach, you will have to save about 60%-75% of your annual income to retire early. This is if you want to build a corpus that can sustain you through the years. 

But to do so, you will have to significantly restrict your expenses today. So, you may have to limit outings, travel plans, and shopping trips to meet the savings criteria. This type of cautious spending and lifestyle restrictions can be hard to manage. 

• You Might be Bored 

Without the structure of work, you might even feel bored and unproductive. Loneliness and boredom can, in turn, impact your overall health. That’s why having activities planned to keep yourself busy after early retirement is essential.

Is Early Retirement Worth Considering?

Early retirement in India may be worth considering if:

• You are debt-free
• You have saved enough 
• You have planned for medical and health expenses
• You can provide for your dependents
• You are prepared to live on a strict budget (both before and after early retirement)

Strategic Approach to Early Retirement Planning

If you do think early retirement is the right approach for you, here’s a list of things you may do to plan it better:

Start Planning Early

Start saving and investing aggressively in your 20s and 30s if early retirement is your goal. Starting early:

• Gives your investments time to grow through different market cycles
• Allows compounding to work it’s magic
• May help you invest more because of fewer financial commitments as a young adult

Figure Out How Much Money You’ll Need For Early Retirement 

One of the biggest worries with early retirement is simple: what if the money runs out? The way to deal with that is by building a strong savings habit early on. Ideally, your retirement fund should be enough to maintain your pre-retirement lifestyle. 

At the same time, you also have to factor in inflation, because your expenses will keep rising over time due to rising costs of living. 

So, based on when you want to retire and how much want to have saved up, your savings may look like this:

• Retire at 60: Around 10–12% of your annual income may be enough if you start early
• Retire at 55: You may need to save about 15–20% of your income
• Retire at 50: This could go up to 35% or more each year

Choose Suitable Investments

If you’re aiming for early retirement, your investment mix needs to do two things well: grow your money and protect it. In the early years, you can afford to take more risk, so equities often play a bigger role in helping your corpus grow faster. But as you get closer to retirement, it becomes important to shift towards more stable options.

This is where bonds come in. Fixed-income investments like high-quality corporate bonds or government securities can add stability to your portfolio. They can help by:

• Providing a steady and predictable income
• Being less volatile than equities, which helps protect your capital
• Offering regular interest payouts that can support your day-to-day expenses

A balanced approach like this can help you not just build your retirement corpus, but also make it last.

Raise the Investment Amount Periodically

If early retirement is on your goals list, you should allocate any additional income like yearly incentives, tax rebates, and bonuses into your investments. 

That’s because inflation will keep devaluing your savings and investments over time. So any extra contribution you can make while working may go a long way. Increasing your contributions yearly may help you build a possible hedge. 

So, Early Retirement is Great When Planned Right

Retiring early can free up your time to pursue other things in life. But this is worth it only if you have an adequate corpus saved up. For this, you have to:

• Estimate your retirement expenses correctly
• Save adequately
• Invest wisely
• Increase contributions 
• Switch to ‘safer’ assets as you get closer to retirement

If you’re looking to retire early, you may consider bond investments and laddering strategies, where you receive regular principal payments every year. You can even increase your contributions and use windfalls for bonds. To explore AAA-rated bonds and other bond baskets, you can visit the GoldenPi platform.

FAQs on Early Retirement 

1. What is early retirement?

Early retirement is retiring before the traditional retirement age of 60 years. 

2. What is the FIRE method?

FIRE or Financial Independence, Retire Early, is a strategy of extreme savings and investing to attain financial freedom early, and retire earlier than the usual retirement age. This strategy proposes saving up to 75% of one’s annual income. According to FIRE, early retirement may be taken if your retirement corpus reaches 25 times your annual expenses.

3. What are the common mistakes to avoid when planning early retirement in 2026?

Some common mistakes to avoid when planning an early retirement include:

• Not factoring in inflation 
• Not considering lifestyle expenses
• Not diversifying investments
• Neglecting emergency fund savings and healthcare costs

4. Is it better to retire early or wait until 60?

That depends on your financial readiness and goals. While early retirement offers more freedom, it also requires thorough planning. If you don’t have enough saved, you might overlive your corpus. 

Disclaimer:

This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.

Bonds or non-convertible debentures (NCDs) are regulated by the Securities and Exchange Board of India and other government authorities. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.