Are you planning to retire early so you can enjoy a comfortable life while doing the things you want to do? Before you write a notice or resignation letter addressed to your boss, you need to be aware of some factors to consider about taking an early retirement. A wrong move can cause you to lose more than what you have already attained. When planning for an early retirement, you should take primary consideration to the following factors: your finances, your work, and your protection.
Can you tell how much is enough for you to retire early?
To help you assess your retirement savings and investments and find out if you have enough money to comfortably live a retiree’s life, you may need the help of a financial planner who are experts on money matters. Based on your financial profile, he/she will be able to advise you if now is the right time to retire, or do it later because you still need to earn and save some more. Consequently, she/she should be able to help you set a timeline of activities.
One general advice that experts usually give is to start living with a frugal lifestyle under tight budget. This means you should live below your means and avoid buying stuff on credit which you cannot pay back right away.Choose wisely items and necessities that are affordable yet of good quality.
You may think the opportunity to retirehas already come, now that your children have moved out of the house to start living on their own.
Such situation can trigger you think like this. You can be mentally and emotionally prepared to gravitate toward an early retirement mode, but what if you are not yet financially ready?
You can test the waters by taking a semi-retirement while still earning money through the following options:
- Setup a home space to become your office for a small business or freelance work
- Generate a more lucrative source of income using your savings and investments
An insurance plan offers protection from loss. It will be risky to retire without getting some type of medical or health insurance coverage that will be useful in case something happens unexpectedly.Find one that is suitable to your budget.
Aside from this, you may also need other kinds of insurance that covers protection for your spouse and dependents when you are no long capable to work or when you are gone. Consider discussing insurance matters with a financial planner.