Do you want to enjoy life while you still physically can? You can if you make the effort the start early retirement planning. Carefully analyzing at what age you want to retire is the first step in making an early retirement plan. You need to consider many factors when choosing at what age you want to retire. A few years age difference can already have a great impact on the amount of money that you will need.
If you already have a target date when you want to retire, you must then know how long you expect to use your money. Of course, there could be a hint of something here, but that is life. Everybody will go there, it is just a matter of time. But let’s just say how long you hope to enjoy your money, assuming that you will have an average life expectancy. Will your retirement money be enough for that period?
Years before you make an early retirement plan, you must learn how to increase your cash reserves; that is, you have savings, checking and/or money market accounts for emergency cases.
You must have an idea as to how much money you will need. You might need to restructure savings and investment accounts to make sure that they will provide a more consistent and steady source of retirement income. You also need to carefully think about these as there is no room for any mistakes as the types of investments that you will choose will be to provide a means of income for you and your family for the rest of your life.
You also must come up with a solid idea as to how much will be spent each year, as well as the need for a stable source of income that will be adequate for all your needs. To make sure you will have that capability on those times, it is best to have assets that would earn you additional income for an extended period of time. Or you may just spend less in your retirement years or just work for a longer period of time. It would be best if you save more now before you reach your target retirement date.
Moreover, you need to maximize tax deductible contributions years before you make your early retirement plan. It would be wise too if you diversify your investments. Also, note when you can or should you start taking social security benefits. Since you should start eligibility with medicare when you turn 65, you also need to consider the cost of health insurance that you need pay for until that time comes. At the same time, you must also consider having additional income for health purposes even just for a few years until you are eligible.
Lastly, consider your plans after retirement. Are you making an early retirement plan to enjoy your life, throw away money, or are you going to enjoy life while earning more money. You should consider doing what you love to do and what earns you money.