Did You Retire Too Soon? 3 Signs—And What To Do Now

More than half of Americans stop working earlier than they expected—and not always by choice. According to the Transamerica Center for Retirement Studies, 58% of retirees say they left the workforce sooner than planned, often due to health issues or job loss. Even voluntary early retirement can have unintended financial and emotional consequences.

Whether you’re already retired or approaching that milestone, spotting the signs that you may have jumped too soon can help you get back on track before your portfolio pays the price.

Warning Sign #1: You’re Spending Way More than You Expected

It’s common to overspend in the early years of retirement, especially for those who retire in good health. But the damage can add up fast.

“New retirees may find they are spending a lot more than they anticipated,” says Mallon FitzPatrick, head of wealth planning at Robertson Stephens. “When folks retire on the younger side and they are in good health, they often start traveling and doing activities that cost more than their long-term plan allows for.”

Without a regular paycheck, even small indulgences can throw off your long-term projections. If you notice your withdrawals climbing or your savings balance shrinking faster than expected, start by revisiting your budget. Tracking every expense for a few months can reveal problem areas, and building in realistic allowances for travel, hobbies, and gifts can help you stick to your plan without feeling deprived. Review and adjust your budget at least once a year—or more often if your lifestyle changes.

If budget tweaks aren’t enough, you might consider more significant changes. FitzPatrick suggests considering whether downsizing might be a good fit for you. Selling a home can help bolster your nest egg and might even allow you to put some excess cash to work in your portfolio. Some retirees opt for more creative options, renting out a second home or an accessory dwelling unit (ADU) on their primary residence, FitzPatrick adds.

You can also go a more traditional route and start a side hustle or take on some part-time work. “Keeping an open mind can help,” says FitzPatrick. “Perhaps there is another type of work you would consider or a new skill you’d be willing to learn.”

Warning Sign #2: Healthcare Costs Are Eating Into Your Nest Egg

Retiring before age 65 means going without Medicare, and finding affordable coverage on the individual market can be daunting. “Premiums are rising, and healthcare costs can erode retirement savings faster than planned,” says FitzPatrick.

These costs, combined with inflation and market volatility, can create a triple threat for early retirees. And if you claimed Social Security early, your monthly benefits may be permanently lower than if you’d waited. “Claiming Social Security benefits early often means a permanent reduction in monthly payments, whereas delaying can lead to substantially higher lifetime payouts,” FitzPatrick says.

To protect your savings, explore options for coverage. First, check if you qualify for subsidies through the Health Insurance Marketplace, as they can significantly reduce your premiums. You should also consider joining a spouse’s employer-sponsored plan, which may end up being the most cost-effective route.

If you’re leaving a job, COBRA coverage can extend your previous employer’s plan for up to 18 months, though usually at a higher cost. Finally, for those willing to work part-time, certain employers offer health benefits to part-time staff, which can help you avoid tapping into your nest egg for medical expenses.

Warning Sign #3: You Miss the Routine—and the Paycheck

The retirement dream doesn’t always match reality. Many new retirees struggle with a loss of identity or structure.

“A third, less visible but equally important sign is a sense of lost purpose or structure,” FitzPatrick says. If you feel unmotivated or disillusioned in retirement, consider exploring new hobbies, volunteering, or even taking on part-time work.

You should also look into whether returning to the workforce full-time is right for you. “Without a clear path for how to stay engaged, some early retirees ultimately find that returning to work offers social and intellectual fulfillment,” FitzPatrick says.

That return to work will also help you financially: Even a few extra working years can dramatically improve long-term projections, FitzPatrick says. In one case, he recalls a client who felt burned out from a demanding legal career and was aiming to retire at 50. She wasn’t financially ready to retire, so FitzPatrick advised her to take a short sabbatical instead. She opted to take a career break of less than a year and then transitioned into a less demanding role—all without having to cut back on her spending.

The Bottom Line

Early retirement isn’t always a mistake—but it requires more planning than many people realize. If you’re burning through savings, struggling to cover healthcare, or feeling adrift, it may be time to adjust. That could mean downsizing, renting out a property, starting a side hustle, or rejoining the workforce in a part-time or passion role. It might even mean going back to work full-time.

With the right course correction, it’s never too late to improve your financial footing and your sense of purpose in retirement.