You check your retirement account balance, and you’re pleased to see far more growth than you had expected. Or, perhaps you’ve enjoyed a successful career, and have managed to pay off all of your debts. Whatever the reason, you might be considering an early retirement. This is definitely a possibility for some people, but take the time to consider these five things before you take the leap.
You’re too young for Social Security. You won’t be eligible for Social Security benefits until 62, at the earliest, but waiting until your full retirement age at 66 or 67 will guarantee you receive your full benefits. Do you have enough income to sustain you until that time? Your retirement account might take a big hit during those years.
You’re too young for Medicare. You won’t be eligible for Medicare until age 65, so what will you do about your healthcare? If your former employer provides retiree health benefits, you might be in good shape. Otherwise, retiring without some form of health insurance could pose a big risk.
What are you retiring to? You’re retiring from your current career, but what are you retiring to? If most of your friends and neighbors are still working, you might find retirement to be a bit lonely. Make sure you plan to spend your days staying busy in some way.
Early withdrawal penalties. You might be able to take early withdrawals from your retirement account without a penalty, but don’t make any big decisions until you investigate the rules fully. In most cases you must meet some strict guidelines; otherwise, you’ll be paying a hefty penalty on any withdrawals taken before age 59 ½.
Making your money last. An early retirement means more years to enjoy your retirement. This is both a good thing and a bad thing. As far as your retirement income goes, you need to make sure your money will really last for twenty or thirty years (or more).
We can help with that last part. If you’re considering an early retirement, give us a call. We can help you sort through your options, and decide how to establish a stable retirement income.