Many people hope to retire early in order to spend more time relaxing, visiting with family, traveling, or even just enjoying the fact that they are done working. However, retiring early can be a significant task to accomplish, and you might have questions: How much money will you need? What expenses should you plan for? While you can’t predict the future, talking to a financial advisor may be able to help you understand some of the factors that go into whether or not you can plan to retire early. At Prosper Financial, our team will work with you as you explore retirement options that are appropriate for your situation.
The amount of money you will need to retire is a major factor in deciding when to retire, and the recommended numbers can be surprising. While the actual amount you will need varies, a common estimate is that you should be able to replace about 80% of your pre-retirement income every year after you stop working.
Social Security income may make up a portion of that amount, but it’s important to remember that the earlier you retire the less your benefit will be. According to the Social Security Administration, you can retire as early as 62 and still receive benefits, but they may be reduced by as much as 30 percent. However, some people aspire to retire before they even reach their 60s.
There are a number of strategies that work towards an early retirement, though it can sometimes involve living off a smaller portion of your pre-retirement income than is normally recommended. Others may choose to retire from a full time job, but continue working in a lesser capacity. You will also need to consider future costs such as healthcare and long term care expenses. Paying off your mortgage early or downsizing may be able to help lower your everyday expenses once you retire.
If you are considering retiring early, you may find it helpful to speak with a financial advisor. An advisor can discuss your retirement plan with you, and provide a professional perspective on the state of your finances. Our team at Prosper Financial will work with you to develop a unique plan that addresses your situation and is aimed at helping your money grow.
Our new client process starts with a consultation where we can discuss your goals with you and better understand what you hope to accomplish. You’ll also get to meet our team and decide whether our services are fit for you.
If you are hoping to retire early, you may find it helpful to work with a financial advisor on a retirement plan. An advisor can discuss your questions with you so that you can get a better picture of when you may be able to stop working and what you will need to get there. To learn more or schedule a consultation with one of our advisors at Prosper Financial, contact us today.
Many people hope to retire early in order to spend more time relaxing, visiting with family, traveling, or even just…