The client had a goal: He wanted to retire early to one day golf in the Senior PGA Tour. Dan McElwee, executive vice president and wealth manager with Ventura Wealth Management in Princeton, N.J., already knew that his client could afford to leave the workforce early. He had a pension that would pay out 85 percent of his annual salary as a police officer.
McElwee's client faced one big question though: Was retiring at the age of 48 -- which the client planned -- leaving the workforce too early?
McElwee thought not. This client had a particular goal in mind for how he was going to spend his retirement years, and that made retiring at an early age the right decision.
Unfortunately, too many others who retire early don't have such a plan. They retire for all the wrong reasons, such as being bored at work. When they leave the workforce, they find that they're bored at home too. They planned for the savings side of retirement, but they didn't come up with a strategy for how they were going to fill their days.
"For my client, there was no reason to stay in the workforce," McElwee said. "Why should he go into work every day at a job that put his life at risk if he didn't need to? It really was a no-brainer for him."
It's rarely such a no-brainer for others though. The decision to retire early takes plenty of thought, even if you are financially set for retirement at 50.
Here are some of the best -- and worst -- reasons to retire early.
Best: You want to pursue a passion
Ron Grensteiner, president in the Des Moines, Iowa, office of American Equity Investment Life Insurance Company, says that the best reason to retire early is to follow a new dream.
Grensteiner himself says he plans to open a UPS store after retiring. Why? He describes himself as a "customer-service nut."
"I can take the skills I learned in the insurance business and use them in a new business," Grensteiner says. "I can bring excellent service to my customers. That's something I'd really like to do."
Those retiring early? They need to find they really like to do too. Otherwise those hours at home can get awfully tedious.
Best: You want to preserve your health
Some have to retire early for health reasons. Maybe their jobs require hard labor that is wrecking their bodies. Grensteiner says that retiring early to preserve your health -- as long as you can afford the move -- makes sense.
"One of the best reasons to retire early is to enjoy good health and to have fun," Grensteiner says. "If retiring early can help you do this, and it won't put you in a financial bind, by all means, consider leaving the workforce early."
Best: You want to take on something new
Charles Massimo, CEO of Deer Park, N.Y.-based CJM Wealth Management, says that leaving the workforce early to learn a new skill or trade is a sound decision.
As Massimo said, many early retirees return to school to earn a degree. They might not use that degree in their professional pursuits, but they might use it to otherwise enrich their lives. Others might retire early to open their own business or help their adult children run their businesses.
"There are so many things you can do after retirement, if you have a plan," Massimo says. "Retirement is as much an emotional decision as it is a financial one. If you are not emotionally ready for retirement, you will struggle, even if you can financially afford leaving your job early."
Worst: You want to travel the globe
If your only plan for your post-work years is to travel, you might be retiring early for a bad reason. Traveling is expensive. And after too many trips, it might lose part of its allure.
"When you travel, you still have to pay those property taxes on the home you own in New York," McElwee says. "Those don't go away just because you're traveling in Europe. Vacation costs and second-home costs can add up. If you take a $10,000 vacation once, that's not a big deal. But if you take a $10,000 vacation trip every year for the next 10 years, that can hurt your finances."
Worst: You want to spend more time with your spouse
It might sound good to retire early to spend more time with your spouse. But, as Grensteiner says, you and your spouse -- if one or both of you have been working full-time -- haven't spent all day, every day together. You might find that you get on each other's nerves.
This illustrates again how important it is to have a plan for how you'll spend your time after retirement.
Worst: You're bored at work
It's not surprising that many people retire early to alleviate the boredom of being at work every day. But this can be a dangerous reason: Boredom at the office can easily become boredom at home.
And boredom at home? That can wreck your finances, Grensteiner says.
"Most people think their expenses will go down once they retire," he says. "But that's not always the case. You need to be entertained after you retire. You tend to spend more on vacations. You might buy a motorcycle. You might go out to dinner more often. You might spend as a way to alleviate your boredom."