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Early Retirement?
By Daphne | May 5, 2008
Even if you are not close to early retirement age but think you may want to retire before 65, plan for it.
It is difficult to plan for something 30 or 40 years away but if you are considering retiring before the age of 65 then you may need to save more than you already are. When you retire 10 years earlier, you are cutting down on 10 years of earnings, and compounding interest for any money you may have invested.
Planning an early retirement in order to change careers or to take a less stressful lifestyle but still having some income is different than most people’s perception of early retirement. Though retirement does not mean that you are not doing any work or brining in any income.
If you retire early but still have income you will not have to pay a penalty for most retirement or annuity plans. The withdrawal age is generally 59 ½. Seriously considering retiring early? Stagger your investments so that you are not penalized for withdrawing money early. The penalty can be as much as 10%. That ten percent could be enough to pay your living expenses for a year depending on how much you have invested.
To make early retirement a reality, calculate what you need to live on, whether or not your home will be paid for by then or if you want to relocate where expenses are lower.
Early retirement can be a reality if you plan and diversify your investments, still have some income until you are old enough to receive payments from your annuities or retirement plans and live within your means.
Topics: May 2008 |
May 5th, 2008 at 9:55 am
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