You spend your whole life dedicating hours upon hours to the company. You have climbed the ladder of promotions, survived the ups and downs of business, and somehow socked away a little money between your own personal savings and investing in things like a 401k plan. So, now, you are asking yourself some hard questions about what you have tucked away. You are looking down the road and wondering how to retire early, or at least on time. Can you retire at 60 with five hundred thousand dollars in your retirement fund? Let’s take a closer look at the different factors that might influence your decision.
How Much Debt?
It’s safe to say that a half-million dollars is not going to be enough for you to go jetting around the globe knocking out your bucket list. Is it enough to lead a humble but comfortable existence? Well, it depends on how much money is going out every month. One of the biggest things that get in the way of people thinking about retiring early is the major financial burdens they are still dealing with after sixty years of age. We’re talking the big house with a pool you decided you had to have along the way. Or the brand new car sitting in your driveway. Having no major debt to speak of really makes your half-million more promising. If you really have aspirations of retiring at sixty, you need to work hard to make sure your major investments, like your home, are paid off and behind you. This also means having things in good shape to minimize surprises. Things like a new roof or air conditioning unit can really put a major dent in your budget when there is less money coming in. Minimize debt to increase your chances. How to retire early is to reduce the amounts of money going out.
Insurance is Big
Most people get health insurance through their employer’s plans. If you take the leap and retire at sixty, you are still years away from Medicare. Insurance is something you will most definitely need, especially as you get older. This is not the time to try to rough it without health care. There are ways to get medical insurance on your own, but it generally means paying more than you are accustomed to because you may not realize just how much your company was splitting the cost of insurance with you. This is a major consideration, and it is a reason that many people try to make it at least to sixty-five before thinking about calling it quits.
Quality of Life
Maybe you can make it retiring early, but will you be able to enjoy yourself? If you have been fortunate enough to have a decent salary all these years, you probably are used to a certain quality of life. No one wants to retire but have to live differently than they did when they were working. We want to have the money and the free time to enjoy it. So, if you are the type that is perfectly content working in the garden and mainly living a pretty low-profile lifestyle after retirement, then maybe you can make it happen. If you have plans of traveling the world, then you probably need to look into the best moves to make financially to retire at 60 and make sure you are taking action now.
Length of Life
These days, people live into their eighties and nineties pretty regularly. That is great news, but it also means that your money after retirement has got to go a lot longer than you may be thinking of. You aren’t just budgeting to see if you can survive month to month when retiring early. You’ve got to think twenty years down the road. If you live to be a hundred, what would happen then? Will the money be enough to keep you comfortable? Will you look back and wish that you had chosen differently when you were pushing sixty? Of course, it can work out the other way too. You can pinch pennies, die young, and never enjoy your money. Your overall health is probably a good indication what your post-retirement life will be like. Always remember that you are in for the long haul, and no one wants to run out of money when they are at a point in their life when they may need more help from others than ever before.
So, as you can see, there are a lot of things to consider before taking the plunge and retiring at the age of sixty. A half-million dollars saved is quite an achievement, but when you put that up against expenses for the rest of your life, it may just not be enough. The question kind of changes from can you retire to should you retire.
What is driving your wishes to get out of the workforce at just sixty years of age. Many people thrive in the workplace on into their seventies and beyond. Are you burnt out with what you are doing? Maybe it’s time to try something different instead of just calling it quits. A career change that keeps you happy and working longer could be a lot better proposition than retiring early. Having said that, you can always test the waters, retire at sixty, and then if things don’t seem to be working out, get back in the workforce again. Many people thought they were ready to retire only to find that they don’t really enjoy the retirement lifestyle as much as they hoped. There’s no harm done in taking some time to see what it’s like, how the expenses play out, and then you could always go back to work. The biggest thing you can do is plan ahead. If you are still young, focus on saving as much as you can while you have compounding interest on your side. You still have time to find the best moves to make financially to retire at 60. If you are closer to sixty, analyze what your real goals are for your golden years and see if the money you have saved will be able to provide the life you have earned. Everyone has a different idea of what their post-retirement years should be like, and that can heavily influence how much money is really required.