Many people dream of retiring early. If you’ve worked hard all your life, you may be eager to exit the workforce ahead of your peers, but doing so has its ramifications. First, if you retire too soon, you may not be eligible for health coverage under Medicare. That could leave you on the hook for costly private insurance. But retiring too early could also hurt you from a Social Security standpoint. Here’s why.
Some people mistakenly think Social Security benefits are universal — meaning, all seniors collect the same amount of money every month once they sign up. But that’s not true at all. The monthly benefit you’re entitled to during retirement will hinge on your personal wage history. That’s where early retirement could prove problematic.