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Costs and Benefits of Retirement

Every day there are more and more people retiring at a younger age. By the time an adult is around 55 they are tired of working and just want to retire already. But, what they do not realize is that retiring early will give you much higher medical expenses. Heath care costs can add up quickly when you aren’t eligible for Medicare, which kicks in at age 65. Someone who retires at age fifty-five will spend an average of $119,600 over the next ten years on insurance premiums and out-of-pocket expenses, said Dale Yamamoto, who authored a report on medical spending on behalf of the Society of Actuaries and the Health Care Costs Institute. By contrast, a sixty five year old leaving work today will chart-retireesspend only $50,900 over the next ten years thanks to Medicare, which provides less expensive coverage.

There are many study’s going on right now about retiring and when the best time to retire is at. The goal of the study is to help people understand how much money they’ll need to retire. Dale Yamamoto said, “My neighbors had no idea how much health care costs, they were floored by how much it costs for just one year before Medicare kicks in.” The goal of Dale Yamamoto is to inform everyone how much it costs to retire before Medicare comes into play. In the study they found out that by the time today’s fifty five year old retiree hit age eighty-five, he will have spent $372,400, on average. The sixty-five year old retiree will spend only $146,60. That is more than a $200,000 saving if they choose to retire at age sixty-five rather than age fifty-five.

If someone really wants to retire early they have to know what they are getting themselves into. They have to think about the costs and benefits as well as the trade-offs, and the opportunity cost. The main cost of retiring early would be the loss of money. They could lose around $200,000 that could be useful later in their life. Also, work makes someone get up and get moving. If a fifty five year old does not go to work then they are more likely to sit around all day and not be as active. It is important for people to work while they are getting older because it keeps them moving. But, on the other hand, the benefits of retiring early are sleeping in, having more freedom to do what they want, traveling the world, and spending more time with family.   In my family, all of my grandparents have worked until they were at least sixty-five. My grandpa still works today and he is eighty-one yearsmedicare old while his partner is ninety-four. Going to the office really keeps them going and they are more motivated throughout the day. So, they are not losing any money while they are working they are having to pay less for medical expenses while still earning a salary. On the other hand, my friend is forty-nine and she has already retired. She still has a long time until she gets the Medicare benefits so she is having to spend a lot more on her medical expenses than most people. But, before she retired she weighed the costs and benefits of retiring early. Everybody has different views but in my opinion the costs outweigh the benefits and it is important for people to stay working until they are at least sixty-five or can physically no longer work. People who choose to retire early are making a trade-off because they are losing money but then also gaining freedom to do whatever they want to do during the day. People should retire when they physically cannot work anymore or when they turn sixty-five not when they just do not feel like working, if they do not work they will lose a lot of money in the long run.

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