4 Things to Consider If You Want to Retire Early
Michael Baum, CFP® RICP®
Vice President & Associate Financial Advisor
More and more Americans are dreaming of retiring early. If you’re one of them, do you a have plan to make it a reality? The fact is that although 51% of Americans retire at 61 or earlier, the average retirement account savings is just $65,0001. That’s not going to get you very far, considering that average retirement expenses will be roughly 75–80% of pre-retirement – especially if you retire before you’re eligible to receive Social Security benefits at age 62.
That doesn’t mean it’s not possible, though. The key to achieving a happy, financially stable early retirement is to plan well. Here are four essential questions to ask yourself to begin putting a strong and strategic plan for early retirement together.
1: What Are Your Retirement “Must Haves?”
If you could have or do only four or five things in retirement, what would they be? While they may have nothing to do with money, the financial decisions you make now may be crucial to allowing you to achieve them.
2: What Would Revitalize You?
Some people retire with no particular goals at all, other than to relax. But after weeks or months of retirement, boredom inevitably sets in. So, think ahead of time about what pursuits or adventures would make these years special and satisfying for you.
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3: How Much Will You Spend?
The answer to this question depends on your answers to the two questions above, as well as one important consideration – life expectancy. You should plan for retirement with the idea that you’ll live to be 100. We won’t all be that lucky, but people are living longer all the time, which means your income streams may need to last 20, 30, 40, or even 50 years.
And as we’re seeing in the economy right now, any income streams that you have today may also need to be supplemented or adjusted due to unforeseen needs and inflation. Plan accordingly by making sure you’ve got enough retirement savings to last, and withdrawing those savings at a sustainable rate.
You might need to cut costs in some areas to have the funds for those “must have” things and experiences. You might think about downsizing to achieve this or getting rid of items or lifestyle habits that aren’t on your “must have” list and yet are costing you a lot of money.
4: How Are You Preparing For Retirement?
This is the most important question of all, because if you don’t plan it you likely won’t live it. So be purposeful about planning and use the expertise of professionals to make sure you maximize your resources and options to the fullest potential.
This is what we do every day at Weiss, Hale & Zahansky, through our Plan Well, Invest Well, Live Well process, and it’s one of my favorite parts of being a financial advisor. It’s all about helping people to see that their dreams are actually possible, if they create a strategic plan to get there and stick to it. Seeing my clients achieve those goals is one of the most rewarding parts of what I do.
If you’d like help in creating a strategic financial plan to retire early or achieve any other goals, reach out to us for a complimentary consultation.
Presented by Vice President, Associate Financial Advisor Michael Baum, CFP®, RICP®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259, 860.928.2341. http://www.whzwealth.com These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice.
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