Many people may plan to take an early retirement or circumstances out of their control may force them to make that decision. Either way, with life expectancies steadily increasing for Americans, it’s possible that an individual could spend at least one-third of his or her lifetime in retirement. So, the sooner you begin planning for your exit from the labor force, the greater your chances of taking a comfortable, early retirement.
To maintain your quality of life during your non-working years, you should plan to supplement your qualified retirement plans and Social Security benefits with personal savings. With a disciplined long-term savings plan, you may help increase the likelihood of reaching your retirement goals.
There are important planning considerations specific to early retirees. For example, individuals who retire before the age of 59½ may incur certain penalties on early withdrawals from retirement plans. Also, the pace of inflation will have a direct impact on how long you can live comfortably on your retirement income. Remember that over time, the purchasing power of the dollar typically decreases. Due to financial necessity, or sometimes just an overabundance of leisure time, part-time work while in retirement may be worth your serious consideration as an important part of your overall financial plan.
One often overlooked aspect of retirement planning is money management, especially once retirement has started. Periodic reviews of your finances with a qualified financial professional can help ensure that you get on—and stay on—the right track. In addition, by staying on top of your financial affairs and practicing the art of living within your means, you’ll have a greater appreciation for how many more years you may have to enjoy your retirement. With more and more people in the U.S. living into their 80s and 90s, it’s essential that you plan ahead to help ensure the retirement lifestyle you envision.