Kevin O'leary Issues Stark Warning On Early Retirement

Kevin O’Leary could retire today and be a very wealthy man. With an estimated net worth of about $400 million, there’s no reason in the world for him to continue working if he’d rather spend his days doing something else.

But early retirement may not be as attainable for the average worker.

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The Federal Reserve puts median retirement savings among Americans aged 45 to 54 at just $115,000. And those in the 55 to 64 bucket aren't doing much better, with a median balance of only $185,000.

Related: Dave Ramsey warns Americans on Medicare, retirement fears

On the flipside, though, proponents of the FIRE (financial independence, retire early) movement commonly save large sums of money when they’re fairly young in the hopes of ending their careers well ahead of their peers. O’Leary, however, says FIRE doesn’t work for a surprising reason.

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Kevin O’Leary says work isn’t just about the money

Early retirement is inherently risky from a financial standpoint. Someone with $3 million retiring at 45 might need their nest egg to last 50 years, whereas someone with that same sum retiring at 65 might only need it to last for 30.

Early retirees also face an extended window of time between ending their careers and being eligible for government benefits like Medicare and Social Security. That puts extra pressure on the savings they’ve accumulated.

Related: Kevin O'Leary says you need to hit this savings milestone by 33

With a large enough nest egg and appropriate mix of income-producing assets, it’s possible to pull off early retirement with minimal financial stress. But O’Leary says that early retirees who focus on the money aspect alone are missing the big picture.

When Kevin O’Leary retired in his mid-30s after selling his first company, he found himself bored out of his mind. So not surprisingly, he opted to go back to work after realizing how unfulfilling early retirement was.

Now, at 70 years old, O’Leary continues to dabble in different business ventures. He even recently made a bid to buy TikTok.

Kevin O’Leary thinks early retirees might regret their choice

A recent Resume Builder survey found that 42% of retired seniors are looking to go back to work to combat boredom. Younger retirees with more energy may be even more likely to end up bored in the absence of some type of job, O’Leary warns.

“Working is not just about money. People don't understand this very often until they stop working,” he says. "Work defines who you are. It provides a place where you're social with people."

Related: Suze Orman issues warning on claiming Social Security early

Not only that, but O'Leary insists that working helps people live longer.

"Staying stimulated is how people live into their 90s," he says.

So when does O’Leary plan to retire? In a word, never. And that’s an important takeaway for people who are saving aggressively in the hopes of ending their careers in their 40s or even 50s.

That said, O’Leary doesn’t necessarily think people should hammer away at boring or stressful jobs for the rest of their days. As a celebrated entrepreneur, O’Leary would probably be the first person to tell people who achieve financial independence at a young age to go out and find their passion. That could mean starting a profitable business or seeding a non-profit that supports a meaningful cause.

More on personal finance:

• Tony Robbins has blunt words on IRAs, 401(k)s and a tax fact
• Scott Galloway warns U.S. workers on Social Security, retirement flaw
• Dave Ramsey explains a Roth IRA, 401(k) blunt truth

In recent years, there's been a shift toward older Americans continuing to work longer. As of late 2023, 19% of U.S. adults ages 65 and older were still employed, according to Pew Research.

That trend may be a symptom of financial necessity. But a growing number of older Americans are also shunning the idea of a classic retirement in favor of continuing to work in some capacity. And that’s something FIRE fans should take to heart.

As O’Leary says, "I don't know where I'm going after I'm dead, but I'll be working there too."

Related: Veteran fund manager unveils eye-popping S&P 500 forecast