4 signs you won't be able to retire early, even if you think you're ready to leave work

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  • Early retirement brings lots of freedom and new opportunities, but it requires a lot of work and planning. If you're not ready to leave work yet, there will be several apparent signs. 
  • You're not ready to retire yet if you don't have enough money set aside to live on through your late 50s, when you're able to start accessing retirement accounts like a 401(k) or IRA without a penalty. 
  • If you haven't yet discussed your plans thoroughly with your partner, it might also not be the right time. 
  • You should have a solid backup plan on how you'll make ends meet if you need extra money, and know how you can cut back on costs to live cheaper in early retirement.  
  • Use Blooom to analyze your 401(k) today and see how you can grow your retirement savings »

If you're considering retiring early, chances are you've done some careful planning in advance. And that's a good thing — no matter how much you have saved, it takes some work to make sure that the money's in the right place, there's enough to last for many years, and that it can sustain your lifestyle. That said, the FIRE movement — or financial independence/retire early — isn't for everyone. 

Simply reaching your FIRE number isn't always enough to retire early — there are some other considerations to make before you're able to leave paid work for good. These four signs might indicate that you aren't quite ready to retire as soon as you thought.

1. Your savings aren't in the right place

Even if you've reached your savings goal in a retirement account, like a 401(k) or traditional IRA, you may not be able to retire as early as you'd planned. Especially for those looking to retire in their 30s or 40s, there's a significant gap between early retirement and the age at which you can access your retirement savings penalty-free.

Retirement accounts have minimum age requirements for withdrawals and could incur penalties as high as 10% if you take money early. For 401(k)s and IRAs, that age is 59 1/2. While there are some exceptions to these rules, like the rule of 55 for anyone who retires between age 55 and 59 1/2, they don't apply to every situation. 

More than likely, you'll need to have some savings outside of retirement accounts, like in an individual taxable investment account. While these accounts don't have the tax advantages of IRAs and 401(k)s, they don't have any age requirements on withdrawals. 

2. You don't have a backup plan

It's possible that you retire early, only to find that it's not as fun or exciting as you thought it'd be. Or an unexpected expense or family emergency could come up that your retirement funds can't cover, or stock market changes could have a big impact on the money you use as income. You might find yourself in a situation where you need to go back to work or make extra money, and it's something you should plan for. 

Having a plan to reduce your expenses or increase your income in your retirement phase is critical to make sure it goes as smoothly as possible. And having a plan for all of the "what ifs" can give you extra peace of mind, too. 

3. You and your partner aren't on the same page about early retirement

If you're planning your financial life with someone else, it's critical to make sure both of you are on the same page about money and your plans to retire early.

Not only will it be a big change in your lifestyle, but it will also likely involve some financial prioritizing and sacrifices that you can't make alone. You might need to save more of your income, or downsize your home — and the person doing all of this with you should be in on the decisions.

Keep in mind that one of you retiring early may not mean that you both have to. Early retiree Brandon of the Mad Fientist blog told Insider that his wife has no intentions of retiring early from her career in optometry. However, it can also be a communal goal for the two of you, as early retirees Amon and Christina Browning chose, giving them the option to move their family abroad to Portugal.

Make sure that early retirement is a conversation, and talk with your partner about all your early retirement plans. Get on the same page about your finances, backup plans, and goals before leaving work for good.

4. You haven't looked into cutting costs to live more affordably

There are several different types of early retirement, but most types of FIRE rely on spending less and saving more. For most people, that's going to mean reducing one of most Americans' biggest expenses: housing. Whether you rent or own, most early retirees at least consider downsizing. 

If downsizing isn't a viable option, there could be other possibilities to make life more affordable once you've retired. Relocating to a more affordable part of the country, getting rid of a car and car payment, or re-evaluating your subscriptions and recurring expenses could be a way to cut back costs and live affordably. 

Even for typical-age retirees, cutting costs and living frugally is an essential part of the retirement lifestyle. Cutting back on your expenses is a good way to reduce the need for a backup plan, and can make your funds last longer, too. 

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