Who hasn’t dreamed of early retirement?
Leaving the workforce with plenty of time to pursue your true passions — or just a little more rest and relaxation — is the goal for most of us. But often our financial realities and lack of savings stop us from putting in our two weeks’ notice.
If you want to retire sooner rather than later, start tackling these four financial milestones:
You’ve Ramped Up Your Planning Efforts
If you want to retire early, you’ll probably need to put away more than the recommended 10 to 15% of your yearly earnings. Examine your current budget to see how you can maximize your savings and create a plan for success.
You’ve Locked Down Solid Health and Life Insurance Coverage
Ensure that you’ll be insured after you leave your current job, especially if your health care is employer-provided. Also, make sure your life insurance policy is up-to-date with an appropriately sized death benefit.
You’ve Built a Passive or Part-Time Income Stream
For many people, owning real estate, bonds or dividend-earning stocks helps to provide consistent income after they’ve stopped working. Others choose to continue working a few hours a week in order to bring in some extra income.
You’ve Met Your Savings Goal
The final step before retirement is assessing your savings and being realistic about whether you have enough to cover your remaining years. Figure out how much you anticipate spending each year in the context of how long your retirement will last. Then add budgetary “padding” to cover any emergency expenses to make sure you’re set for life.
Curious as to whether you can retire early, or looking to update your insurance in preparation for leaving the workforce? Reach out today.