Early Retirement
One of my co-workers always said she was going to take an early retirement. “Out of here by age 50” was her motto. We teased her about it, telling her she’d probably end up working until she was 70 or 80, but we were wrong. She turned in her notice two weeks before her fiftieth birthday, and at age 50 she retired to a life of, if not luxury, then certainly a life of plenty. How did she manage this retirement? By following several important steps. Early Step 1: Know What You Want And What You Need Set a specific date for your early retirement. Also think about what you would like your to be like. Is it okay to live a frugal life in a tiny, rent-controlled apartment just as long as you don’t have to go to work every day, or do you want to travel, enjoy fine dining, and spoil your grandkids on their birthdays? What is the minimum amount of annual income that would allow you to live the lifestyle you want? Early Step 2: Start Saving Early You can’t suddenly decide when you’re 32 that you want to retire by age 35. If you want to take an early retirement, it’s important to start planning almost the minute you enter the work force. Stuff as much money as you can afford into a account. It also helps if you aggressively pursue the high-paying jobs that match employee contributions. Some companies offer generous buyouts to employees who take early retirements, so

keep you eyes open for these folks. You may also have to get a second job or work from home to earn extra money to go into your account. No matter what always pay yourself first. Early Step 3: Meet With A Financial Planner A financial planner can look at your current situation and advise you on exactly how much you need to be saving now to retire when you want to. He or she can also give you advice about the best funds to invest in and unexpected expenses you may need to plan for. If you retire early, for instance, where will you get your health insurance until Medicare kicks in at the age of 65 or older? Early Step 4: Keep A Close Eye On Your Financial Situation This doesn’t mean changing your investments around with every little blip in the stock market—most experts strenuously oppose this tactic, in fact—but at least every year you should sit down and review your financial situation to make sure you are still on track to early retirement. If something seems wrong, make an appointment to talk to your financial planner right away. You don’t have to be a millionaire to take early retirement, but you do have to start planning early, get professional advice and follow through on the promises you make to yourself. Following these simple steps should help you leave the work force at a young enough age to enjoy the rest of your life unencumbered by the burden of work.