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Try Early Retirement First

Money to live on

Well when you want to retire early you have to plan for it considering the financial aspect and the emotional aspect.

So, let's talk about the emotional aspect of early retirement.

You have always thought of your self as a "so and so" whatever that may be and when you retire you are no longer really that kind of person any longer.

What you will need is something to fill the void. You are no longer a doctor or lawyer or gas station attendant etc.

People always treated you as what your job title is at work and even at home to an extent. That can change, but also it can change for the better.

Now you have more free time to do things that you have always wanted to do. Do things around the house and vehicles, to maintain the property your self rather than to pay someone to do it.

Work always makes us feel something inside, and if it makes us feel productive, then that is very good.

Remember you are not the "boss" anymore at work, or manager of the store, or gas station attendant etc. It is different now. However, that works for you, you have to face the change.

Money issues!

First do a test drive for the money issues. Can you afford to live off of the savings, interest and money that will be coming in from social security and pensions?

Social-Security is not a good idea to cash in on early because of the cuts you take at 62. You can get some social security at 62, but it is almost half of what you'd get at say 66 if that is your full retirement age.

If you wait until you are 70, you'd get 8% more a year after 66 so that would be 32% more from social security after age 66. That certainly isn't an early retirement though.

IRA's are good and at age 59 1/2 you can finally take out money from your IRA's without a 10% penalty.

Remember that health care costs don't start to get covered until age 65 from Medicare unless Obamacare actually gets to kick in and save us all form healthcare costs that can be costly. Plan for the money to cover health insurance.

You might also have money stored away in a pension or pensions, as well as spousal income, rentals, investments in taxable accounts, CDs, etc.

Do the math and figure out how much you can get from these first. Also figure in a buffer for any problems such as a tenant moving out of a rental and nobody replacing them for say 6 months or a major roof repair cost or a major vehicle expense.

If you retire early, then think about how much money you will have to pay to keep driving a car over the years.

Cars wear out, and you'll need to buy another soon enough, and that equals a lot of $.

Think about these age groups and the money available in them.

1. 55-60, Income from your a pension(s), rental income, a spouse’s job, your savings, and investment accounts
2. 60-66, More income money from from IRA and Roth IRA withdrawals.
   
   
3. 66-70, Income from Social Security and remember that if you start early at 62 it is much lower.
   
   
4. 70+: Add income from required minimum distributions from retirement accounts if applicable

You have to do the math and add up the mount of money you can get to come into your accounts from everything and the unexpected and expected costs of living on it and see if it works for you.