"Every exit is an entrance somewhere else." - Tom Stoppard
It is still possible. It seems that no matter what state the current economy is in, the idea of retiring early is worth entertaining. The idea of retiring early may have lost its shine for some. But for others, the concept is not only possible but may come without a choice.
Your current job may be something you enjoy doing and yet, the idea that you could be doing something else, pursued as a retiree may be too strong an urge to resist. But the considerations are numerable and nuanced to all of us. So I'd thought I'd take a moment and look at some of the upsides and down of this important secession. As someone once suggested: "You really only get this chance once."
While you are working is when to begin this strategy. It probably goes without saying but many of us fail to get a feel fro retirement living while we are still employed. How do you do this?
First: play retired.
Here's a retirement stress test that will cost you nothing but your time. Schedule a vacation and do nothing. I understand that this is time normally set aside to relax but retirement is a "long" time set aside for that purpose (and other things). Ask yourself: can I take a week off and not spend any additional money?
Retirement will be one of those times when each spending dollar should be carefully considered. If you plan on retiring on $35,000 a year from your retirement accounts, then spending more than what a week would pay will impact the other 51 weeks. For that you'll need a budget. Don't have one? Try this one.
Second: Think retired
No doubt the lure of early retirement is laced with opportunities. But what are they? Are they realistic? How much risk or cash will be needed to launch this new objective?
For many of us, the comfort of 9-5, weekends off, holidays paid is a very comforting cocoon. If you intend to start a new business or join a venture in progress, chances are you will need to consider revamping your estate plan and revising your tax and financial planning in advance of doing this.
You will also need to consider your health. If you are retiring before you are eligible for Medicare, there is good chance your company will no longer insure you in the interim. Without a doubt, the cost of keeping older workers is high - some estimate is runs in excess of $50,000 per employee past sixty years old. But you will bear that economic hit if you leave and have no insurance coverage.
Third: Retired where?
Increasingly, the place is as important as the actual act. For some, the taxes assessed by their current municipality may not be affordable (you will need to make some assumed projections). The house might need more long-range upkeep than your retired income might cover. And worse, where you are now might not be close enough to other seniors, activities, family and even more important as you age, quality medical facilities.
