Retiring at 65 could be the biggest mistake of your financial life. Here’s why, and what to do instead

With concerns about inflation, investment returns and insufficient savings, delaying retirement until at least 65 may seem like a sensible decision.

However, this approach only focuses on the financial aspect of retirement. In reality, working longer may introduce non-financial risks that may ultimately diminish the quality of your retirement years.

Here’s why postponing retirement until 65 could be a costly mistake.

Optimizing for quality of life

From a purely economic lens, delaying retirement as long as possible maximizes your nest egg and monthly income.

If you delay Social Security until 70, for instance, you could boost your monthly benefit check significantly. (3) And, if you keep working until your 80s, you’ll probably add a lot more money to your nest egg.

But optimizing for wealth sacrifices other important aspects of your life, such as health, relationships and happiness.

For example, if skiing on the slopes of the Swiss Alps is on your bucket list, it’ll probably be much more enjoyable in your 60s than in your 70s, and is practically impossible by your 80s.

According to the latest data from the World Health Organization (WHO), a typical U.S. adult can expect to live just 63.9 years in full health. (4) If you retire at 65, you’ve already crossed that threshold and enter your golden years more likely to see a hospital than a ski slope.

Retiring early also gives you more time to spend with your friends and family in good health. That means more meaningful conversations with your partner while they’re still alive and more fun activities with your grandchildren while you’re still nimble.

Put simply, if your goal is to prioritize quality of life over finances, you should consider retiring before 65.

Practical ways to retire early

If you’re convinced about early retirement, the next step is to figure out which of the following categories you fall into: have, nearly have, or have not.

If you have a sizable retirement portfolio and sources of income that can sustain your living expenses, you can likely retire whenever you like. However, your challenge is more likely to be psychological.

Many wealthy older adults are simply too invested in their careers to retire early. Boredom could also be a concern — 27% of respondents to a HireClix survey said they were worried about lacking a sense of purpose in retirement, and 41% feared boredom and lack of fulfillment. (5)