If you are thinking about taking an early retirement, you really need to take a few things into consideration before doing so. After all, you want to be absolutely sure that you are making the very best decision for both your present and your future. So continue reading for a few of the many things that you will need to consider prior to taking an early retirement.
Do You Have a Transition Plan in Place?
Whether you hold a very high position at a large business, you run your own company, or you are a medical professional, if you are planning on retiring early, you need to make the right plans and arrangements in order to ensure a smooth transition for everyone, not just for yourself. Look for experts who can help with this process. For example, if you are a dental professional, you can get help from professionals like those at Premiere Practice Transitions, dental practice transitions California.
Will You Have Enough Money Coming in from Social Security?
If your social security benefits will be a major part of your overall retirement income, you should be aware that early retirement will reduce the amount of money that you receive. In fact, the earlier that you begin receiving your benefits, the lower they will be. If you begin receiving your benefits at the age of 62, your income will be reduced by 25% compared to if you waited until 66. And if you wait until 70, your income will be 76% higher than it would be if you started receiving the benefits at 62.
Have You Practiced Living Off of a Retirement Budget?
In addition to your income dropping, your expenses may increase during retirement, so you need to test the waters before diving in. Although there will be some areas where your expenses might decrease, it is best to expect increases so that you are fully prepared for what might come. A good way to see just how ready you are is by determining what your retirement budget will be. Then, for six months, live off of that income just as you would if you were retired. If you can make it with money to spare, you can retire early.
Will You Be Able to Cover Your Health Care Costs?
Medical expenses and health insurance premiums increase as you age, and unless you have been working for an employer who will be giving you health insurance into your retirement, you will need to fend for yourself. Remember, you will not qualify for Medicare until you are 65 years old, so do your research into local health insurance providers and plans and see if you can factor these additional costs into your retirement budget before you decide to retire early.
If you follow the tips above to consider whether or not early retirement is the right plan for you after all, you could avoid a lot of problems in the long run. It may be a great idea, or it may not be a smart decision for you right now.