Most people dream about the day they will be able to retire from their full-time job. The thought of being able to escape the daily grind is a dream that many of us share. However, before you take the plunge, there are some things, financial and otherwise, that you should consider.

Your health. Just because you retire from a full-time job doesn't mean that you necessarily need to retire from an active life. There are many studies that have found that staying active, whether it be with a part-time job or some type of volunteer activity, is crucial to keeping your mind and body in good physical and mental condition.


Your marriage. Even though couples promise to stay together "for better or for worse", that doesn't mean that you want to spend 24 hours per day together. There should be some planning and negotiation that need to take place before either husband or wife decides to retire.

Taxes. Retirees can begin taking penalty-free withdrawals from their 401(k) accounts at age 55 and IRA withdrawals at age 59 1/2. However, these withdrawals are still going to be subject to income tax. By delaying the withdrawal of funds from these accounts, they can continue to grow at a compound rate for more years, thus giving you a bigger retirement account on which to live.

Social Security. You may begin receiving Social Security checks at age 62 1/2, but you will pay a penalty in that you future checks will be reduced by 25 to 35 percent. If you delay signing up for Social Security to the age of between 62 and 70, your benefit will increase by up to 7 to 8 percent per year.

Health benefits. Those who retire before age 65, the age at which you qualify for Medicare, must worry how to pay for expensive health insurance premiums until they do qualify for Medicare. The costs for health insurance will be extremely expensive, even if you belong to a company-sponsored plan as you will probably be required to pick up the company's portion of that health premium in retirement.

There are many other reasons why you should consider whether or not to retire in the near future. We will explore some of those issues in a future article.

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