The decision of when to retire is a difficult decision as there is a lot to consider. Usually, you retire when you reach a certain age or are no longer able to work. In some cases, it may make sense to take an early retirement.But when is it good to take it early and when is it not? Consider the following circumstances before making your decision.
When You Have Enough Saved
Once you retire, you have the option to continue working, but many choose not. Since it’s likely you’ll no longer be working, you need to make sure you have plenty of money saved up in order to support you and any of your dependents. There are many guidelines you can follow as you determine how much you should save. One way you can determine how much is enough is to take stock of your current spending and lifestyle preferences. You can look at what you spend now and determine whether those expenses will change or even go away once you retire. You want to make sure you have enough money to live comfortably. If you’re unsure, you can use retirement calculators as a guideline as well.
Source: https://www.nerdwallet.com/article/investing/how-much-to-save-for-retirement
When You’re Disabled
Sometimes, you don’t have much of a choice when it comes to retiring early. For example, if you are injured or become disabled you may not be able to work anymore. Depending on the disability, there may be other work options to pursue, but early retirement may be the best choice. If you do choose to retire early, you should know that some benefits may be limited. Retiring early may mean that your health insurance will be limited since you will need to wait until you qualify for Medicare. You also need to consider your Social Security benefits. If you retire before 67, your Social Security benefits will be significantly less than had you waited for them to fully vest.
Source: https://barnesdisability.com/social-security-disability.php
When You’re Debt Free
Once you retire, you don’t want to be dragged down by any debts. Paying debts off should be a priority before retiring. You should consider your mortgage, student loans, credit card debt, and any other debt you have accumulated over the years. Once you’ve paid off these debts, your only financial worry is living costs. Paying off debts can relieve a huge burden for you and, if you feel financially secure, it may be an indication that you can retire early.
Source: https://content.schwab.com/web/retail/public/book/excerpt-single-5.html
When you retire is dependent on many factors, but often it’s a personal choice. Do you feel ready? Do you feel secure? These are some of the things you should consider. Take some time to evaluate your situation to see if an early retirement is right for you.
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