At times, it can seem like staying in the workforce grind isn’t worth it any longer. As one gets older it’s natural to want to take things easier and enjoy freedoms that have been earned from a lifetime of work. The standard age of retirement in the United States is roughly 67 years of age.
However, you can retire a full five years earlier at age 62. There are pros and cons to this decision, and it should not be made lightly. However, if you’re ready to get some of your freedom back, here are the things you need to know and consider about retiring early.
Understand Your Money Situation
Your thirst for freedom is valid. You’ve worked hard in your life and want to reap the rewards. However, you need to understand that choosing to retire early can drastically affect what your financial situation looks like for the rest of your life. Take, for example, your social security check.
If you were to retire at 67 you could receive the full amount of possible money from your Social Security. However, retiring as soon as you can will bring in less money. This may not necessarily be a deterrent for you based on your needs. It is simply something to be mindful of.
If YOu Retire Early, What Does Your Budget Look Like?
One of the most important steps you need to take if you intend to retire early is to assess your yearly spending habits. How much did you spend on utilities? Do you rent or own your home? Add your yearly housing costs to the list. Compare that with the amount of money you are estimated to receive and you will start to form an idea of what your financial situation may look like.
This may seem like a daunting task to take on. This is where speaking to a financial adviser could really be a benefit for you as they would be able to help you put together a realistic idea of what you would have to spend to get through the year while relying on your Social Security check.
Look at Remaining Debts
It needs to be said that if you are considering early retirement, you should also be considering how you plan to resolve any outstanding debts that you may have. Making new arrangement with your debtors may be something that you have to do in order to achieve your retirement goals.
You may still want (and need) to make money after you’re retired. It may behoove you to place investments that can earn you money back. Once again, this is a matter in which speaking with a financial adviser can give you the information and insight you need in order to decide if making such investments are the best plan for you and your retirement.
What Will You Do With Your Time?
It is easy to imagine a life of retirement as simply kicking back in a lawn chair with a cold lemonade and bidding goodbye to your worries. But it may not take long to realize that you may find that version of retirement to be a bit boring after awhile.
You should make up a list of things that you would like to do with your retirement. Having a game plan like that can not only give you a sense of purpose during your retirement, it can actually save you money in the long term because you will not waste time, energy, and money trying to figure out what you want to do on a day to basis.
Retirement Doesn’t Necessarily Mean Retiring
When talking about retirement it is easy enough to think of retirement as the end of working in one’s life. However, whether you feel you are not getting enough money or because you are likely to become restless, you should know that collecting your retirement does not mean you have to quit working altogether.
You can choose to take up a side hustle: Turn a well-loved hobby into a business opportunity or even take up food delivery. There are numerous things that you can do to continue to bring in money, even after you have technically retired. Best of all, none of them lock you into a contract and they allow you to work at the pace that you desire. You can stay as busy as you would like.
The Plan is Worth It
It may seem headache-inducing to have to plan out how you want to live post-retirement. However, having no strategy at all could turn the retirement itself into a big headache if you are not careful. Being smart with your financial and life plans will help you get the most out of retirement to ensure that it is as enjoyable as possible.