The average age most Americans expect to retire is 66, but there are a number of people settling into their golden years early. Planning for a traditional retirement isn’t always that simple and striving to retire early requires even more discipline. An early retirement can be difficult to achieve, but it’s not impossible. Here’s how you know you’re heading on the right path:
- You’re debt-free. Any sort of loan such as car loans, credit cards, and a mortgage can have a direct impact on your ability to save for retirement. If you enter retirement with debt there’s a chance that it can restrict your quality of life. Clearing debts isn’t always an easy task, but there are avenues towards minimizing them such as downsizing your home, trading your vehicle in for something more practical, and limiting your splurges until you receive bonuses.
- You’re saving more than you need each month. Most people have an idea of how much cash flow is coming in and how much is leaving their pockets each month. It’s important to not only know what your earnings are, but what your saving goals are too. Start off by using this pre-retirement calculator here. It’ll help you estimate the amount you need to achieve in savings by the time you retire and how much you should be saving monthly to reach that goal. If results show that you’re currently saving more than necessary, then you’re on a healthy start.
- You’ve closed the insurance gaps. Healthcare is and will continue to be one of your biggest expenses in retirement. Until you become eligible for Medicare (at age 65), you’ll want to have an understanding of how long your health insurance coverage will last in case of an emergency. There’s also a high chance that you’ll need some sort of long-term care service which may not be covered by Medicare. You can help close that gap with long-term care insurance. In addition, you may also want to look into other coverage such as disability and life insurance to add extra layers of protection to your income.
Do you crave the freedom and dream on settling down before the typical American? No matter how you slice it, retiring early means making some changes now. Reach out to us and we can help adjust or develop a plan to attain your retirement goals.
This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.