Planning an Early Retirement? Here’s How to Prepare

Early Retirement

Retirement is a goal for many, but it’s important to plan carefully before you can enjoy the benefits. You want to be sure that you’ve saved enough money for your retirement, that you have the necessary paperwork in order, and that you’re free from any debt so you can enjoy your time off stress-free. 

Here are some things every retiree needs to do before they walk away from their career for good!

Decide If Early Retirement Is Right For You

The early retirement lifestyle is often romanticized in movies and books, but it’s important for you to be sure that taking this step is right for you before you take the plunge. If you aren’t someone who enjoys spending time alone or hates heat and the sun, this may not be the lifestyle for you. It’s also worth noting that many people find themselves bored after their retirement since they no longer have a goal to work towards every day. But if you need some rest, enjoy spending time alone, and you’re ready for traveling, then you’re ready to retire. It’s time for you to start planning your early retirement.

Make Sure Your Finances Are In Order

First of all, before retiring, be sure that you have saved enough money and have established a budget so that you won’t run out of funds before your planned retirement date. If you’re wondering how much you should have for retirement at 40, for example, there are many retirement calculators available to help you make an educated guess. You can also follow the 50/30/20 rule to help get a grasp on how much of your income should go towards fixed costs, “wants” and savings.

Get Rid of Debt

If you have debt, pay it off before retiring so that you won’t have any outstanding bills hanging over your head. If you have credit card debt or student loans, learn how to get rid of those before retiring so that they don’t pile up and cause you stress. Debts should be gone before you retire, so make sure to clean your balance sheet before walking away for good.

Get Rid of Debt

Review Your Medical Coverage

Before retiring, make sure you review your medical coverage. Retirement means that you won’t have to worry about keeping your job for the benefits, but it also means that you’ll need to pay for health care out of pocket. Budgeting for this is important so that you aren’t caught by surprise when there’s a doctor’s visit or an expensive procedure in your future. Research the health care options in your area and see what’s available, then figure out how much extra you will need to pay to maintain good coverage when retired.

Handle Your Documentation

In order to retire, you’ll need a lot of documentation that proves that you can afford to retire early or that qualifies you for certain benefits. If you’re not sure how much paperwork is involved with retiring, start getting organized now so that you don’t fall behind when it comes time to leave your career. Make copies of all the relevant paperwork, store them in different folders, and then assemble them all into an organized binder that you can bring with you to your retirement. The documents that you’ll need include birth certificates, marriage certificates, bank statements, and proof of employment.

Figure Out Your Plans After Retirement

It’s important to start preparing for your life after retirement so that you can get a head start on actually enjoying it. Figure out what your plans are now so that you don’t waste time once you retire. Do you want to travel? Move away? Stay in your area but start a new hobby? Think about all the things that you want to do with your life and budget for them while still working so you can make sure they happen. You can also look into alternative ways of making money after retirement, like taking on an extra job or freelancing, so that you don’t get bored. 

Here are some ideas on how to spend your time after you retire. 

  • Traveling

One of the best things about retiring early is that you can travel all around the world. Synchronize your retirement with a vacation so that you can visit Hawaii, Africa, or Australia without putting in too many hours at work before leaving. 

  • Volunteering

If you want to stay active after retiring, look into volunteering. You can choose to work with animals at a shelter or help out at a local community center – your options are endless. Volunteering is a great way for retirees to keep busy after retiring and connect with the community.

  • Starting a Business

Early retirees are uniquely qualified to start their own businesses since they have the time and experience, but they are not too old to do it. Start brainstorming ideas for a business that you can start up once you retire and then work on putting together a plan of action. 

  • Continuing Education

Retirement is a great time to go back to school and get additional education or complete a certification program. Continue learning after retirement so that your brain stays active.

  • Hobbies

Retirement can also be a great time to start new hobbies. Do photography, learn how to play the guitar, or get into pottery. Get creative and find something that you can spend your free time on that will keep you sane and happy!

Whether your plans are to start a new business, travel the world, volunteer, or just stay at home resting, retirement is a big deal. It takes a lot of planning and preparation to make this dream come true, so it’s important that you’re adequately prepared for the transition before leaving your career behind. Consider things like previous debts, health care coverage, extra income, and documentation so that you can stay ahead of the game. Figure out what your plans are for retirement and research all of the possibilities now so that you can actually enjoy it when the time comes! We hope that this article has provided you with some helpful information on how to prepare for early retirement.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.