If you retire before 59 1/2, you’ll typically face a 10 percent early withdrawal penalty from most tax-deferred accounts like traditional IRAs and 401(k) plans. “There are some options for accessing IRA money before 59 1/2, but it’s tricky and can result in significant penalties if done incorrectly,” says Matt Stephens, founder of AdvicePoint in Wilmington, North Carolina.

And unless you have a Roth IRA, funded with after-tax contributions, you’ll owe income taxes on the amount you withdraw from traditional accounts funded with pretax contributions. For example, if you withdraw $20,000 from an IRA before age 59 1/2 and are in the 15 percent federal tax bracket, you’ll owe $5,000 in taxes and penalties, leaving you with $15,000.

Time works in your favor when saving for retirement, but against you when spending. If you save $250 a month — $3,000 a year — from age 25 to 55, you’ll have about $237,000 at retirement, assuming no withdrawals and an average 6 percent annual return. Not bad for $90,000 in contributions.

But if you work 10 more years and retire at 65, you’ll have about $464,000, nearly double. Why? The extra decade of contributions helps, but it’s not the main reason. The real growth comes from ten more years of interest earned on both your initial contributions and the interest that’s compounded for four decades.

A woman retiring at 55 will have to make her savings last for 28.6 years on average, compared to 20.4 years if she retires at 65. For a man, the numbers are 25.1 years at 55 versus 17.8 years at 65. Couples who reach 65 have a 25 percent chance that the surviving spouse will live to 98, according to the Society of Actuaries.

“With improved healthcare, many people are living longer than the national averages,” says Angela Dorsey, a certified financial planner in Torrance, California.

A typical rule of thumb is that you’ll spend about 80 percent as much in retirement as when you work. However, especially in the early years of retirement, you might spend even more due to travel, home renovations, or other lifestyle changes. According to a J.P. Morgan study, this “spending surge” tends to level off after two or three years.

With inflation running high at 5 percent over the past year, your spending plans might need revising. About 26 percent of retirees find their spending on housing, health, and medical expenses is higher than expected, according to EBRI.

“Every day feels like Saturday,” says Sean Pearson, a certified financial planner in Conshohocken, Pennsylvania. “Once you’re not working, you wake up and look for things to do — it’s basically how we all feel on Saturdays. Some activities might be fun and social, some might involve work around the house. Most things cost money, which is why Saturday is often the most expensive day of the week.”

Retiring without a mortgage is a common goal, but many fail to achieve it. According to an American Financing survey, 44 percent of retired homeowners aged 60 to 70 still have a mortgage.

Even if you’ve paid off your mortgage, other expenses persist. “Home maintenance and increasing property taxes can eat into your budget,” says Dorsey, the California financial planner. New Jersey, Illinois, and New Hampshire have the highest property tax rates, while Hawaii, Alabama, and Colorado have the lowest. Homeowners should budget around 1 percent of a home’s purchase price annually for repairs and replacements, which amounts to $3,500 per year for a $350,000 house. Also, many states offer lower property tax rates for those 65 and older.

Working in retirement isn’t as straightforward as it may seem. While 70 percent of workers plan to work for pay in retirement, only 27 percent of retirees actually do, according to the EBRI study. Even part-time work can pose challenges. “One thing early retirees don’t seem to realize is that if they are planning on doing traditional part-time work while retired, those jobs require a commitment to a schedule that sometimes is not very flexible,” says Leslie Beck, a certified financial planner in Rutherford, New Jersey. “This can cut into other retirement goals such as travel or visiting with family. I have had retirees surprised by the inflexibility of part-time work.”

If you’re thinking of relying on Social Security to fill the income gap, remember that the earliest you can usually claim retirement benefits is age 62. However, at that age, you’ll only receive partial benefits. For anyone born in 1960 or later, the full retirement age, when you are entitled to 100 percent of your monthly benefit, is 67. Claiming early at 62 reduces the benefit amount by 30 percent.

Retiring means you suddenly have a 40-hour gap in your week to fill. “Are you sure you have enough activities to keep your body, mind, and spirituality occupied for the many years ahead?” asks Catherine Valega, a certified financial planner in Winchester, Massachusetts.

Consider how much time you realistically see yourself spending on activities like going for long walks, lounging by the pool, or curling up with a good book, especially after the initial novelty wears off. Think long term before retiring. Do you want to volunteer, go back to school, pick up a new hobby, or resume an old one? It’s crucial to come up with a plan in advance.

If you retire in your 50s, you may find that your current friends aren’t around much — because they still have full-time jobs. While you have the luxury of catching a matinee or playing a round of golf midweek, those in your social circle who are working nine-to-five don’t.

If you make new friends, they are likely to be older, says Dennis Nolte, a certified financial planner in Oviedo, Florida: “Many of my pre-60-year-old retirees, especially those who are active, lament that their new peer group is significantly older than they are — and thus have a different set of expectations about diet, sleep schedule, even cultural references.”

“Retirement is a major life transition, and you have to be patient with yourself and your spouse,” says Patti Black, a certified financial planner in Birmingham, Alabama. “Most retired couples do not look like those pictured in ads and commercials.” You’ll have to decide how household chores will change. Will you really share cooking, cleaning, and yard work? And do you honestly want to be together 24/7, especially if you downsize to a smaller home?

These decisions can have serious consequences for a marriage. “Gray divorce, or divorce after age 50, has doubled since 1990 while declining across all other age groups,” Black warns. “And it is most often the wife who asks for divorce after age 50.”

When you retire early, the sudden absence of daily professional engagements and achievements can leave a void. Many find it challenging to redefine their sense of worth and purpose outside the workplace. This transition often requires finding new activities or communities to engage with to regain a sense of identity.

Without the routine physical activity associated with commuting and working, early retirees may find themselves leading a more sedentary lifestyle. This can accelerate health issues such as cardiovascular disease and obesity. It’s important to consciously incorporate physical activity into daily routines to mitigate these risks.

As you grow older, premiums for life and health insurance can increase significantly. Early retirees need to plan for these costs, which can consume a considerable portion of their retirement savings, especially before Medicare eligibility begins.

Claiming Social Security benefits early can result in up to a 30% reduction in monthly payments. This permanent decrease affects financial stability over a potentially long retirement period, making it crucial to calculate the trade-offs carefully.

Leaving work can sever many social ties, leading to isolation. It’s important for early retirees to seek out new social networks, whether through hobbies, community involvement, or other means to maintain mental health and social connections.

Inflation can significantly reduce the buying power of fixed incomes over long retirement periods. Early retirees must have investment strategies that outpace inflation to avoid diminishing their standard of living.

Longer retirement increases exposure to volatile markets which can impact the sustainability of withdrawal rates from retirement accounts. Diversifying investments and having a flexible withdrawal strategy can help manage these risks.

Managing how and when to withdraw from retirement funds to minimize tax impacts involves complex planning. It’s advisable to work with a financial advisor to optimize tax strategies during the longer span of retirement.

More time spent together at home can strain relationships unless couples make conscious efforts to accommodate each other’s space and interests. Open communication about each person’s needs and expectations is crucial.

With a longer retirement horizon, there’s a heavier reliance on investment income, which can fluctuate with market changes. This requires a well-thought-out investment plan that balances growth with risk management.

Early retirement often leads to increased spending on travel and hobbies, which can quickly deplete savings. Budgeting for leisure activities and seeking cost-effective travel options can help manage these expenses.

The probability of requiring long-term care increases with age, and the costs can be substantial. Purchasing long-term care insurance or setting aside funds for future care needs is a proactive measure to consider.

A longer retirement duration necessitates a comprehensive estate plan to manage and distribute assets effectively over time. Regular updates to reflect changes in life circumstances are also important to ensure that the estate plan remains relevant.

Transitioning from a regular paycheck to a fixed income requires strict budget management and financial discipline. Early retirees should plan their budgets to accommodate fluctuating costs and unexpected expenses.

Early retirement means foregoing additional years of salary, career progression, and benefits accumulation. It’s important to weigh these opportunity costs against the benefits of retiring early.

The transition to retirement can be psychologically challenging, with some individuals experiencing a sense of loss or diminished self-worth. Engaging in new or previously sidelined interests can help mitigate these feelings.

Some individuals may regret retiring early due to boredom or financial strain. It’s vital to thoroughly plan both financial and lifestyle aspects of retirement to minimize this risk.

If an early retiree decides to return to the workforce, they may face obstacles such as age discrimination or skill mismatches. Keeping skills updated and maintaining professional networks can ease this transition.

There is evidence suggesting that early retirement can lead to a decline in cognitive abilities due to reduced mental engagement. Continuously challenging the brain through learning, puzzles, and social interaction can counteract this risk.

Retiring early can affect your financial ability to support dependents. Planning for their needs, particularly education and healthcare, must be factored into the decision to retire early.