Early retirement may not be for everyone. But if you’re considering of availing of this opportunity, you need to assess your financial situation and what kind of life you will be leading after you quit your job. Your savings play an important role here.
For many professionals who have been working long and hard, it’s very tempting to choose early retirement. Who wouldn’t want to enjoy more time with the family and be engaged in various hobbies? The bottomline, however, is if you’re financially prepared.
Early retirement may not be for everyone. But if you’re considering of availing of this opportunity, you need to assess your financial situation and what kind of life you will be leading after you quit your job. Your savings play an important role here.
For many professionals who have been working long and hard, it’s very tempting to choose early retirement. Who wouldn’t want to enjoy more time with the family and be engaged in various hobbies? The bottomline, however, is if you’re financially prepared.
A huge retirement fund is vital if you wish to retire early. Experts say you will need funds worth 10 to 16 times your salary by the time you quit your job. For someone earning $120,000, for instance, he should have set aside $700,000 if he wishes to retire by age 60. But if he has other sources of income like a monthly pension or he wants to get a scaled back job afterwards, he may need a lesser amount of savings.
As early as you can, try saving 20 to 25 percent of your income every month. You can do this if you cut back on your huge expenses. It won’t hurt if you give up some of the regular treats you enjoy like going to the movies or eating out.
Take advantage of retirement plans offered by your employer such as the 401k and IRAs which are automatically deducted from your monthly salary. What’s great about this is you pay no taxes and your funds grow tax-free until you withdraw them.
If you plan to work again, you better start searching in advance before leaving your job. You may also want to upgrade your skills so be prepared. Just be sure that you know what you want to accomplish in life.
