6 Steps to Take if You Have to Retire Early
Here are some things you should do in the final few months before you retire.
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In the UK, you don't need to wait until the state pension age to retire. You can generally access your pension pot from the age of 55. This means retiring at 55 is a very real possibility for Britons in their mid-fifties.
The basics. If you retire at 55, and the average life expectancy is around 87, then 300K will need to last you 30+ years. If it's your only source of retirement income, until the state pension kicks in at around 67/68, then you are going to have to budget hard to make it last.
Pros of retiring early include health benefits, opportunities to travel, or starting a new career or business venture. Cons of retiring early include the strain on savings, due to increased expenses and smaller Social Security benefits, and a depressing effect on mental health.
Retirement experts have offered various rules of thumb about how much you need to save: somewhere near $1 million, 80% to 90% of your annual pre-retirement income, 12 times your pre-retirement salary.
The 4% rule is an often-cited framework to safely pull money from retirement portfolios. The metric, created in the 1990s by financial advisor William Bengen, says retirees can withdraw 4% of their total portfolio in the first year of retirement.
According to the BLS study, retirees are currently allocating about 9.45 of their extra hours each week to leisure activities like travel, recreation, reading and socializing. That seems like a promising start. Unfortunately, the bulk of that time (5.42 hours to be exact) is spent watching T.V.
A general rule of thumb to consider when planning for retirement is the 4% rule. ... According to the 4% rule, if you retired with $100,000 in savings, you could withdraw just about $4,000 per year in retirement.
The quick answer is yes. With three million dollars, you should be able to retire comfortably if you retire in your 60s. However, depending on your cost of living and number of dependents, you can retire with three million dollars at a younger age if you wish.
Retirement-plan provider Fidelity recommends having the equivalent of your salary saved by the time you reach 30. That means if your annual salary is $50,000, you should aim to have $50,000 in retirement savings by 30. While that can be a daunting figure, start by saving what you can.
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