Need Flow Of Income To Retire Early
The top 5 retirement worries address the fact that retiring without enough money will limit your choices. Ignoring these retirement worries could change the dynamics of your dream to retire early. If you run out of money once you are retired you will only have 2 options, return to work or live within the confines of your limited retirement income. To avoid limited choices during your retirement years, plan ahead.
Get Prepared Before You Retire Early
The best way to combat any retirement worries is to be aware of them before you retire early so that you can change your retirement date, arrange for part-time work or adjust your expectations.
Top 5 Retirement Worries
1st – Not Enough Social Security
If you are relying upon social security to be your single source of retirement income your retirement dreams may be disappointing. When the government set up the social security system they never intended for it to be a retirement plan in and of itself; but instead one source of retirement income. If your dream is to retire early with a steady flow of income to last during your retirement years you will need to build it up on your own. Before you retire make sure you can afford the lifestyle you’ve planned without relying upon social security as your single source of income.
2nd – Health Care Costs
Nowadays its hard not to be worried about the cost of health care. Do not fool yourself, health care will become more expensive during your retirement years; it’s unavoidable. Retiring early at a younger age just delays the inevitable. Eventually you will reach that age where it will cost more to take care of your medical needs. Your body will be older, more things will go wrong, the cost of medical care will keep increasing and unknown catastrophic illnesses could occur. Rising medical costs and dealing with aging is not bad if your retirement savings can keep up.
3rd – Taxes
Oh, taxes, that one expenses that never goes away…even in retirement. Some taxes may drop depending upon which state you live in. Income taxes may disappear if you are no longer working; but if your retirement accounts were never taxed, that tax will be owed. Some social security income may become taxable. If you own your home, real estate taxes are due every year. Get the picture? If too much of your retirement income has to be earmarked for taxes, what’s left for your dream retirement?
4th – Stock Market Movements
Stock market fluctuations worry most individuals; that worry gets compounded once retirement hits. During your working years if your investment returns drop it’s a paper loss since you are not actually using the money yet. But during your retirement years, if your source of retirement income fluctuates, your spending ability also fluctuates. Before you retire early either redirect your investments out of the stock market or find a guaranteed stream of income from perhaps an annuity or a life insurance policy.
5th – Effects Of Inflation
Once you retire you will be, in effect, living on the fixed retirement income you left the work force with (your retirement accounts, personal savings and a wee bit of social security). If inflation keeps pushing the price of goods and services up you may find it difficult for your fixed retirement income to pay for all of your needs and wants. You cannot control inflationary factors but you can control the amount of money you retire with.
Expand your choices, ease your retirement worries, enjoy your retirement years…plan ahead.