What is a major financial risk associated with retiring before the age of 65?

Retiring before the age of 65 can lead to insufficient income during retirement due to several factors. First, individuals who retire early may not have accumulated enough savings in their retirement accounts, leading to a decreased ability to maintain their desired standard of living. Many retirement plans, such as 401(k)s and IRAs, are designed to provide income based on the total contributions made and the length of time those funds have been allowed to grow. The earlier someone retires, the fewer contributions they can make, and the shorter time their investments have to compound.

Additionally, accessing social security benefits prior to 65 may result in reduced monthly payments, impacting overall income during retirement years. The combination of lower savings and potentially reduced social security benefits can create a financial strain, making it challenging to cover basic living expenses, healthcare, and other vital costs.

Other choices, while they reflect concerns that might arise when retiring early, don't directly address the core issue of income sufficiency in the same way. For example, insufficient social security benefits may be part of the income equation but is just one factor leading to overall income insufficiency. Similarly, high tax rates on retirement income and increased housing costs can occur during retirement, but they are not as fundamental to the overarching risk