How To Create A Strategy To Retire Early

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Retirement means different things to different people. For some, retirement means a second chapter of a “fill in the blank” opportunity. For others, it’s the choice to work or not to work.

In any case, retirement is a destination we all aspire to reach. The age we want to reach retirement varies though. An article by thebalance.com cites 63 as the average age of retirement. Then there are the overachievers who want to retire by 55.

If this is your dream, it is possible. It just requires a lot of planning. Use the list below as a starting point to create a strategy to retire early:

Create AND test drive your retirement budget:  Create a retirement spending plan to account for all of the projected expenses and spending you may have in retirement. Be honest with yourself when you create your spending plan. If you can’t live below your means now, what makes you think you can do it once you retire? If your new budget includes big drops in expenses like eating out, clothing or entertainment, test-drive the changes now to see if you can stick with them into retirement.

Thinking about travel? Great, first think of how often you want to travel. Next, go on websites like Travelocity to estimate how much your dream destinations will cost annually, divide that number by 12, and use that amount in the vacation category of your spending plan.

Have a healthcare game plan: First, make sure you estimate the cost of insurance until you qualify for Medicare.  According to ehealthinsurance.com, the average cost of health insurance for an individual age 55-64 years old was $580 a month in 2016. This number can change dramatically depending on where you live. For some, it’s a pretty big financial gap to cover if you plan on retiring at 55.

Second, contact your HR department regarding retiree healthcare benefits and the rules to get them. The last thing you want is to retire at 54 only to later realize you could have gotten healthcare benefits if you retired at 55. If you retire without healthcare benefits, consider working part-time. More employers are offering healthcare benefits for part-time workers.

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Shutterstock

Retirement means different things to different people. For some, retirement means a second chapter of a “fill in the blank” opportunity. For others, it’s the choice to work or not to work.

In any case, retirement is a destination we all aspire to reach. The age we want to reach retirement varies though. An article by thebalance.com cites 63 as the average age of retirement. Then there are the overachievers who want to retire by 55.

If this is your dream, it is possible. It just requires a lot of planning. Use the list below as a starting point to create a strategy to retire early:

Create AND test drive your retirement budget:  Create a retirement spending plan to account for all of the projected expenses and spending you may have in retirement. Be honest with yourself when you create your spending plan. If you can’t live below your means now, what makes you think you can do it once you retire? If your new budget includes big drops in expenses like eating out, clothing or entertainment, test-drive the changes now to see if you can stick with them into retirement.

Thinking about travel? Great, first think of how often you want to travel. Next, go on websites like Travelocity to estimate how much your dream destinations will cost annually, divide that number by 12, and use that amount in the vacation category of your spending plan.

Have a healthcare game plan: First, make sure you estimate the cost of insurance until you qualify for Medicare.  According to ehealthinsurance.com, the average cost of health insurance for an individual age 55-64 years old was $580 a month in 2016. This number can change dramatically depending on where you live. For some, it’s a pretty big financial gap to cover if you plan on retiring at 55.

Second, contact your HR department regarding retiree healthcare benefits and the rules to get them. The last thing you want is to retire at 54 only to later realize you could have gotten healthcare benefits if you retired at 55. If you retire without healthcare benefits, consider working part-time. More employers are offering healthcare benefits for part-time workers.

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