Pros and Cons of Early Retirement

Early retirement sounds like a dream—more free time, less work stress—but it also means making your money last longer and planning carefully.

It’s a big tradeoff between time and security.

KOHO Everything Can Help You Plan for Earlier Retirement

If you’re trying to save more and keep everyday spending efficient, KOHO Everything can help you squeeze more out of your money while you’re still working:

• Grow your savings with 3.5% interest, one of the highest rates in Canada

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else

• There are no foreign exchange fees, so you save on international purchases and travel

• Unlimited transactions and free e-transfers

• No minimum balance required, ever

Pros of Early Retirement

1. More Time for You

You get more years for:

• Travel

• Hobbies and passion projects

• Time with family and friends

You’re trading working years for life flexibility while you’re still relatively young and (hopefully) healthy.

2. Less Stress, More Control

Leaving work earlier can mean:

• Less burnout

• No more office politics or shift pressure

• The ability to design your own schedule

For many people, that’s the biggest benefit—having control over how your days look.

3. Chance to Start Something New

Early retirement doesn’t always mean doing nothing. Some people:

• Start a small business or side hustle

• Shift to part-time or consulting work

• Volunteer or pivot into something more meaningful

You might retire from your current job, not from earning or contributing.

Cons of Early Retirement

1. Your Money Has to Last Longer

If you stop working earlier:

• Your savings have to cover more years

• There’s less time to contribute and grow your investments

• You may need to live on a tighter budget

Retiring even a few years early can make a big difference to the total you need.

2. You Might Save Less and Spend More

Without a plan, it’s easy to:

• Underestimate what you’ll spend

• Overspend in the first few years (travel, home projects, etc.)

• End up dipping into savings too quickly

That’s why having a clear budget and using tools that keep your spending visible (like KOHO) is important.

3. Impact on Benefits and Pensions

Depending on your situation, retiring early can mean:

• Lower workplace pension payouts if you stop contributing or start taking them early

• A gap before certain government benefits kick in

• More years where you rely purely on personal savings and investments

You’ll want to understand how early retirement changes your pension/benefit math before making the leap.

4. Emotional and Social Adjustments

Work often provides:

• Routine

• Social connections

• A sense of purpose

If you retire early without anything to replace those, you might feel restless or isolated over time.

Is Early Retirement Right for You?

Early retirement can work if you:

• Have a realistic budget and savings plan

• Understand how it affects your pensions and benefits

• Have a clear idea of how you’ll spend your time