Are You Ready To Retire?
For some people, the word ‘retirement’ can be depressing as they see that it signals getting old, whereas, for many others, it represents a heavenly dream. A lot of people feel like cogs in big machines, and that their entire careers are geared towards making a living; they just want to kick back and relax. That is why many people plan soon enough for early retirement. If you can’t wait to call it quits and get out of the system, you probably know that you’re not alone. But how do you know if you’re actually ready to tell your boss to peace out?
Here are a few things to consider:
You’ve Paid Your Dues
Mortgage, loans, property installments, massive credit card balances and other forms of debt have to be paid off before a big decision like quitting your job and putting a halt to your career is made. For you to retire comfortably, you need to be sure that you don’t have to worry about making large payments anymore. This leaves your savings and retirement income available for you and your family to enjoy life after work, and a cushion in the event of an emergency.
Your Savings Can Cover Your Retirement Expenses
Retirement takes planning; you have to work out your finances and set a goal for retirement savings, then make sure what you have in your bank account and your investments meet or exceed the amount you were hoping to save. You must also keep in mind that if you do leave work years before your retirement was due, your savings must be enough to cover these additional retirement years. Another point to consider – which will depend on your age – you need to find out if you are eligible for social security or government health care. Your savings will need to cover your expenses until you reach the eligible age.
You Have Passive Income
Passive income is the money you get paid without having to work anymore. Royalties from books, movies, and songs are all forms of passive income. It can also be the revenue that comes from real estate investments or business investments where you don't have to actually work to earn it. Many people invest in stocks that generate profits for them to reap on a regular basis, and a good approach is to look into the promising options out there. With Alibaba Stock being an awesome example, investing in stocks can actually be an amazing way to plan for your retirement. Others choose to purchase real estate units that they can rent out, providing a steady amount of money each month. The best option for you will mostly depend on the market you’re targeting as well as how much you’ve set aside for investment.
You Have a Retirement Policy That Doesn't Have an Early Withdrawal Penalty
So, you made a smart move decades ago and invested in a retirement policy with your bank or an insurance company. Now let’s examine the fine print. Nobody likes to pay unnecessary penalties, and as an early retiree, you are no different – actually, you want to minimize unnecessary payments altogether. If your retirement package doesn't have an early withdrawal penalty, retiring early and withdrawing from the plan won't cost you extra. You may, however, still have to pay some sort of tax on your withdrawals, so do your research before dipping into it.
Look Into It
Deciding to retire is not an easy endeavor, and there are several things to think about. Being debt-free with a solid retirement savings account is crucial. In addition, if you can withdraw from retirement policies without penalty, and get access to affordable healthcare until your government coverage kicks in, things can be a lot easier. Making the transition is never simple, and the best way to decide is to save, plan, do a ton of research, and even get some help from a financial professional.