Do You Dream About Retiring Early?


by David D. Holland



I know a lot of people do! But what does “early” mean to you? Does it mean in your 50s, or does it mean at age 62, the earliest age at which you can claim Social Security (SS) retirement benefits? Keep in mind that with people living longer, healthier lives, retiring in your 50s could mean 40+ years of retirement! That’s a very long time! Retiring in your 50s also means you must find a way to bridge the income gap until you are able to get SS benefits at 62, not to mention the gap to receive Medicare for your health care at 65. It’s not easy, but for people who plan ahead, are willing to make sacrifices, and who follow all the steps necessary – early retirement can be a reality!


Holland FinancialThink about how your attitude toward work might change if you knew you had the freedom to retire at any time. Would you take more risks with your current position, or consider a career change? Would you move to another town or state? Would you downsize your home? Here’s an idea to ponder. “Early retirement” doesn’t have to mean that you stop working completely or that you take SS immediately. You might negotiate with your employer to work part-time so you can receive health insurance benefits until you reach age 65.


The main thing, of course, is to have money in place before you make a big life-shift. If you are in your 30s, 40s, or even early 50s, it is not too late to start taking the steps necessary to reach your retirement goal. This usually means saving as much as possible. Are you contributing the maximum amount allowed to your employer’s retirement plan? It’s also a good idea to diversify the types of accounts. When you leave the workforce, the more income sources you have available to draw from the better. Multiple accounts afford you the option to draw income from those that are most income tax-friendly. (You wouldn’t want to pull a large amount of money from an IRA one year, and then from a cash account the next, for example.)


So, what is the first thing you should do if you want to retire early? Meet with a financial planner to build a retirement plan! This is a different task, requiring different skills, than the investment work done by many brokers and advisers. An experienced retirement planner will be able to suggest the steps you need to take now to make a successful transition later.


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