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Retiring early?

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Katy Certified Financial Planner - Planning for Retirement - Early Retirement Considerations


Want to retire before “normal” retirement age? For that, you’ll need a larger nest egg than if you retired later because you’ll have more retirement years to pay for—yet you’ll have fewer years to build that nest egg. You’ll also have to calculate whether to take Social Security and pension plan benefits early, which would mean smaller payments.  

You may need to replace corporate benefits you lose, such as life insurance and, if you work part-time or on your own during retirement, disability insurance. You also may need to come up with health insurance to cover the gap until you qualify for Medicare. Retiring before age 59 1/2 also can present tax problems. And you may still have major expenses to fund, such as a mortgage and college.  
The challenges of early retirement are not just financial, however. What are you going to do all those years? We often find our retired clients returning to work, often part time, out of boredom.   So although early retirement may sound appealing, be sure you’ve thought through the financial and non-financial implications before taking the plunge.  
 
CAUTION: Failing health requiring long-term care is often the biggest single threat to a retirement nest egg, so consider buying long term care insurance while you’re in your 50s or early 60s. It’s more affordable the earlier you buy it.

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