Deciding to retire early is not a decision to be made on a whim. There are many factors that play into early retirement, and many people do not think about the big picture before coming to a decision. Early retirement is a great goal to have, but one must plan for it long before it is an option. Is early retirement right for you?
If you have thought long and hard about it, and you know that you are finally ready to not work, early retirement may be for you. Often times, people will retire only to find that they grow bored at home, or are in need of something that will stimulate their minds. If you know that you are truly ready to take this step, it is time to make sure all other necessary precautions have been taken so that you can retire early.
Before actually retiring, have a retirement budget in place. Once you have decided on a budget, live your life according to that budget. In order to fully understand the lifestyle that you will be living, you need to actually try living it. Are you capable of living on that budget while you work? If you are not, you may want to rethink your retirement plans.
Did you know that Medicare does not become effective until the age of 65? Until that age, you need to have a trustworthy health insurance provider who will not drop you if you become an insurance liability. Speak to your health insurance provider to make sure that your plans will not cause any changes in your health insurance plan or premiums. Nobody needs thousands of dollars worth of unexpected hospital bills gathering up, especially if you are retired.
If you have children who are not financially stable, they may jeopardize your plans. While unexpected circumstances cannot be planned, it is important to know that your children are fully capable of supporting themselves financially before you decide to live on a fixed income for the rest of your life. If your children still ask you for gas or grocery money, you may need to explain to them that you will not be able to help provide for them, or you might just have to skip the early retirement plan altogether.
If you are still paying on your house, it is probably a bad idea to retire early. If something happens, you will have no way to create a larger budget for yourself. You have to be very careful that every penny possible is freed up for any unforeseen circumstances. If you have a lot of credit card debt or large loans, you might want to wait to retire.