Within the last century, retirement age for most U.S. adults was extended to about 65 years of age. With recent Medicare changes and improved senior health and longevity, more people are working even longer. However, others are finding ways to make early retirement a reality, perhaps in their mid- to late fifties. If early retirement is your goal, it might be a good idea to give the following questions some thought before turning in your resignation.
How is your Health?
Although you may be 50 and feel great, consider what may lay ahead. For example, if your family has a history of heart disease or cancer, consider getting tested before making early retirement plans. If you are battling a chronic illness like diabetes, get your doctor’s opinion about the future prognosis of this illness so you can plan ahead. In addition to factors like the ability to work and monthly income adjustments when you retire, you should also think about health care coverage before and during retirement.
What Are Your Early Retirement Lifestyle Plans?
Do you want to travel when you stop working? Maybe you plan to downsize your home to a condo. Are there other life goals you hope to accomplish during your golden years? Consider how lifestyle changes may impact your monthly budget and whether or not you might get bored of all that free time. Would you prefer to work part-time or volunteer for a charity? As you envision the ways your life will change after retirement, make sure that you are ready mentally, physically, and financially to make the transition.
How Are Your Finances Holding Up?
Everyone with a stock portfolio or savings plans as well as a retirement fund should meet with a financial adviser at least yearly to keep tabs on their investments. If the economy takes a sharp downturn just when you’re about to retire, will your finances be enough to sustain the new life you have planned? Do you have a backup plan in case of an emergency or unexpected economic shift? Remember that expenses will change in retirement. If you have paid off your home and have no credit card debt to manage, you will be in better financial standing than someone who is loaded down with debt and possibly drawing less income each month than when they were employed.
What Role Will Your Family Play?
Middle-age people often breathe a sigh of relief when the last child graduates from college. But financial and familial obligations don’t necessarily stop there. Wedding expenses may pop up later, along with grandchildren to babysit and aging parents to care for. Give some thought to the time and money that you will need during your retirement years to help family members. When relatives know that you are no longer working full-time, they may expect you to help more often.
Most of us dream of a stress-free, financially secure retirement during which we can fulfill all our dreams. However, as in every stage of life, unexpected financial crises and new responsibility can replace long-sought dreams. Before rushing into early retirement, be sure you’re ready on all fronts so that you avoid disappointment and financial hardship.