Still dream of retiring early, but just don’t know how you are going to swing it? Well, it can still be possible with some key planning.
CNN offers various retirement calculators on its “Money” page allowing you to figure out just when your can retire and how much money you need to save, among other components. Among the tips:
• Have a withdrawal strategy. “Knowing how much money should be withdrawn from your retirement savings each year is a critical factor in building a retirement plan. Withdraw too much and you are likely to outlive your assets; take too little and you may unnecessarily sacrifice your standard of living, especially in the early years of retirement,” explained Dean Urbanski, vice president of BMO Harris Financial Advisors, Inc., in a press release.
• Make sure you have enough money. US News reports, “There are still a few people who enjoy a generous, fully-guaranteed defined-benefit pension that kicks in after 20 or 25 years of service. This might be enough by itself to enable you to retire. And some highly-paid professionals in the private sector might have built up a substantial retirement nest egg that will be enough to last for the rest of their lives.” But just having the money isn’t enough. The article suggests it will take “diligent saving and proficient money-management skills to accumulate enough to retire early.”
• Keep your health insurance. Figure out a way to maintain your medical insurance, advises US News.
• Be mindful of asset allocation. “As individuals seek increased income upon entering retirement, they often shift their holdings more toward bonds and cash. This may or may not be a good move, as there are other key investment considerations beyond having a need for income,” stated Urbanski. “Confer with your financial advisor to determine the appropriate allocation for your needs, investment objective, risk profile and timeframe.”
Good information to chew on as we head into the weekend.