For starters, you need to evaluate yourself and gauge your mental readiness on taking early retirement. Getting yourself ready physiologically helps you fight stressful moments you are likely to encounter. For instance, make a clear plan on how you will handle your time. Get yourself something productive to do and make yourself feel important before you take the bold step of early retirement. Such productive activities are critical in getting yourself ready to stop working.
The Children Factor
One of the most important things to consider is your kids. You need to consider their level of education and independence. If you find you still have children who depend on you for one thing or another, then it would mean you will have to delay taking early retirement. Your children are the biggest responsibility both financially and emotionally, and as a result, you need to evaluate the state of your children as the first consideration. In the event all your kids have stable lives, it is a green light that you should take the early retirement. However, unless you are neglectful, your children should be the first factor you consider when considering early retirement as they take a huge portion of your expenses.
It is important you have it very clear that Medicare coverage kicks in when you get 65, and early retirement kicks in at 55. That tells you will be required to take care of medical bills for ten years before you get to 65. As such, evaluate your finances and judge them by considering your past medical expenses. You will need to source for a credible health insurance provider before you are eligible for Medicare. Remember you cannot compromise on your health, hence make a very practical decision on this matter while you are considering early retirement.
Estimated Annual Expenses?
For persons who keep track of their expenditures, this will be an easy task as all you need is visiting your expenses book. However, if you hardly keep an eye on your expenses, it is time you made an estimate of your expenses and start keeping record of every coin you spend.
Keeping track of your expenses is crucial as it will help you plan your next life as a retiree. Besides, you are able to source funds that will help you support your lifestyle to caution yourself from a sharp decline in the quality of your life. Although many people tend to think they will use their savings when they retire, it is important you embark on some light duties that will help supplement the savings. That will protect you from idleness which experts say it contributes to more miscellaneous expenses.
As such, put it in writing of your expected expenditure, and possible sources of finances that will cater for the budget. Besides, start living within that budget before you retire, to evaluate how realistic the budget is to your current lifestyle. That shows you a clear picture of what your future costs will look like.
How Much Have You Saved?
The next viable step is evaluating the amount of savings you have. Get to know how much you have saved, and how long will your savings sustain your estimated budget. Visit all your retirement accounts and bank accounts and do the simple maths. Also, get to know the possible fines you are likely to incur as most retirement accounts have penalties if you take out the money before a given age. Get to know whether you can live on monies you have banked in other accounts as your wait for the maturity of your retirement savings to avoid losing some on fines.
How Much From Pensions and Social Security Funds?
Some jobs set monthly pensions after retirement, while some offer a one-time payment. Have all the information you need concerning you retirement to avoid any surprises that could throw you into financial crisis. Remember you can always count on the amount you will be getting from social security. However, remember the earliest you can start benefiting from social payments is at 62. So make a very comprehensive analysis of your post-retirement income from all sources and judge them against your estimated budget.
What is the Estimated Size of Your Debt?
Having considered all your possible income after retirement, it is time you consider on all your debts. Calculating all your debts gives you the knowledge of how much you are likely to spend settling the debts. However, some debts like mortgage can be paid over time, making it convenient to pay.
Do Want to Relocate or Retain Your Current House?
Some people want to spend their retirement days in a new home and make savings to finance this idea. You will also find estates and mortgage packages designed for retirees only. Get to make consultations with your spouse on this matter and the possible sources of finances to fund the idea. Make sure you get to enjoy your retirement but make rational decisions that will not hinder from meeting your daily expenses. Research on this matter from experts and persons who have succeeded on the idea is much welcome to avoid going blind. Consider how much of your saving will get into the project and its effect on your debt.