Retire Early Or Retire Late: Which Is Best?
When thinking about whether it is better to retire early or retire late, there are many thing to consider. Of course the ideal for most people would be to retire right now with enough money to do everything we want for the rest of our days, including continuing to work at whatever we wanted to work at. But for most people that is simply not practical.
Retiring early means, we hope, enjoying a long retirement, but without so much money as we would have if we worked to a later age. We need to find a balance between having enough healthy retirement years to pursue our dreams, and having the money to make those dreams a reality.
Assuming that you have a pension plan in place, it may be time to review it and consider what lifestyle it is likely to provide for you if you were to retire at different ages. A financial planner can help you with this and will usually give estimates of the income that you could expect to have at different retirement ages with several different projected dollar values.
One thing that people often forget is that retirement income under some plans is fixed, and what sounds like an adequate income for you at a retirement age of 60 will gradually become less than adequate if inflation increases and your income does not. You might live to be 90. Think how the purchasing power of a dollar has changed in the last 30 years. Could you survive now on the average wage that people were earning 30 years ago?
Another point to consider is insurance. If you are thinking of retiring early you will need to check that your health insurance will cover you until you become eligible for Medicaid, and plan for any health insurance payments that you will have to make. Consider too dental insurance and long-term care insurance. Will these become more expensive as you grow older?
As you approach your planned retirement age you will want to work out a budget, and discuss this in detail with your partner. It is very important that your plans take into account whatever ideas both of you have for your retirement. Perhaps your partner has always dreamed of moving to a warmer climate, or closer to family. If you do not ask, you may never know what they wanted until it is too late.
There is a great deal to consider but every little point is important and you will want to avoid having things work out badly. Good planning now, however far you are from retirement, can be the difference between enjoying the life that you dreamed of and struggling in poverty. Whether you decide to retire early or retire late, a happy retirement is achievable with thorough retirement planning.
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