The two most important things about an early retirement are these: being financially viable, and simply having the desire to no longer work. While some people might be absolutely in love with their jobs and want nothing more than to work as long as possible, others dream of more free time with their family, relaxation, and finally being able to do the things they always wanted to do.
While everyone understands the benefits of working longer, seldom do we ever talk about the benefits of retiring early, like better mental and physical health.
Do you feel like you’re ready to withdraw from the workforce and lead a different kind of life? Then let’s go through a checklist of things that you need to consider before making a decision.
Do you have good health insurance?
Quality healthcare is one of the biggest issues that plagues people considering early retirement – Medicare doesn’t start until you’re 65, and private healthcare is extremely expensive. However, if your spouse has insurance then you should be covered as well, so talk to them about it and see what your options are. Healthcare is one of the most important parts of retirement, so if that bit is covered, you’ll be okay.
Are there any debts you need to pay off?
Bank loans, mortgage, and any other form of debt are best handled before retirement. Once you get rid of any debt, you’ll free up a nice part of your income and you can invest more and put money into savings. If you no longer owe anything to anyone, you’re probably in a good place to retire.
Does your spouse still plan on working?
Do you plan to retire together? This is a very important, necessary conversation to have, especially because it might mean both of your incomes will be lowered. Perhaps your spouse plans to work for longer, in which case your early retirement could be even more viable.
Where will you live after you retire?
Do you have a house of your own? Do you plan on travelling or moving your residence? Planning out your retirement living situation is very important, so consider all your options. If you can afford it, we recommend looking into retirement villages – these are great, peaceful places that make living a lot easier because you’ll be surrounded by people your age, all the necessary amenities and any emergency care you may need.
Do you have any dependants?
Are all your children and grandchildren financially stable, and if not, to which extent do you wish to help them? Do you want to help pay for their education? Set boundaries and decide on what you can, and want to do, to help your family, and how much money you can put aside for this. Also, bear yours and your family’s medical bills in mind.
Will you have to downgrade your lifestyle?
Calculate what would your average household income be if you were to retire. Here’s a handy calculator if you need help with that, so check how much you’ll earn and how will that affect you. Once you do that, we recommend that you live a few months on that budget and set the rest of it aside. This way you’ll see what kind of changes will be required to adjust to the new situation.
Do you have another source of income?
Do you own real estate? Do you plan to work a part-time job? Perhaps you have a hobby that you could cash in. If you have another good source of income to support you, retirement will definitely be a lot easier. We definitely recommend that you plan out not just your budget, but simply the way you’ll spend your time. Idleness gets very boring after a while, so why not learn a new skill or start doing crafts, or repairing things, or making art? It’s a good way you stay mentally and physically sharp, and if you can, you can use it to earn more money at one point.
If you are financially stable, if you know you will continue to have plenty of money for years to come, and if you are emotionally ready to stop working, then early retirement could be very beneficial to you. Don’t let the stress and the strain of working a difficult job get the better of you – you know best when it’s time to stop, step back, and enjoy your life’s work.