Are You Trapped In Early Retirement Extreme Mode?
I want to retire early is a common desire; but has that retirement desire become too extreme in today’s workplace? Many people are just so anxious to retire. They are mentally ready, but whether they are financially ready is a different story. Does that sound like you? If it does and you feel trapped in early retirement extreme mode your only escape is proper planning with an open mind.
Retirement And Good Living Takes Planning
How to retire young or early is easier if you work from a plan. Depending upon your age you can work from a 5 or 10 year retirement plan. If you are just starting your career you can develop a 15 year retirement plan and adjust it as your career progresses. If you visit a retirement forum or any early retirement blog you will quickly learn the key areas most important to focus on while planning, regardless of your starting point.
Your Financial Focus
If you want to be not only mentally prepared for retirement but also financially ready you need to ask and answer the following 3 questions:
1 – What Will You Do In Retirement?
Before you know how much money you will need to retire early, you need to determine what you will be doing once you do retire. Will you continue to work part-time? Will you explore new hobbies? Will you garden, travel or spend more time with your family? Will you downsize your home? Will you move out-of-state? Will you do volunteer work? Your options are endless and for you to decide before you determine how much money you will need.
2 – Show Me The Money
Long before you retire you need to estimate how much money you will need to meet your expenses. That sounds obvious, but projecting expenses can be harder than it sounds (especially if you are working on a 10 or 15 year plan). Of course you will not have the same expenses, but other or different expense will replace previous ones. It is easy to underestimate your actual needs if you do not take the time to think about them. Start by tracking your current expenses, determine which ones will be eliminated and which ones will be added. Tracking expenses is tedious but if you brush it off you will miss the opportunity to plan.
3 – How Long?
Working from a 5 or 10 year investment plan could help you stretch out your retirement investments if you manage the money correctly. In other words keep your investments balanced, not too risky, not too conservative. And monitor them often.
Outliving your money once you have retired is a scary position to be in and one that worries most retirees. The concern is real because except for family medical history, how could you know how long you will live? With that in mind, your best financial move is to get in the habit of spending like a pauper not a king (before and during your retirement years).