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How To Determine If Early Retirement Is Right For You

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by: No more debt !
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Date: Fri, 26 Mar 2010 Time: 11:14 PM

In this article I'd like to discuss several tips, tricks, and techniques that just about anybody can use to help determine whether or not early retirement is right for you.

We all look forward to the day we can retire and stop worrying about the day-to-day grind of our jobs and all the responsibility that goes along with it. We all think we'd like to retire as soon as is humanly possible but the fact of the matter remains that early retirement is really not for everybody and that's what I'd like to talk about in this article today.

So how exactly do you determine whether or not early retirement is right for you? Well there are several things that you need to look at before you make a final decision.

The first thing you need to ask yourself is what your financial position will be if you stop working early. You should look at your net income not gross. So compare your net income that you will receive at retirement with your net income that you currently receive while working. How do the two compare? Sometimes even if you make less money after retirement you'll still come out ahead because your expenses will be less and that's why you should look at it from a net point of view instead of a gross point of view.

Next you should look at any incentives that are offered for early retirement. Some companies offer a cash bonus for years of service and some companies offer a larger pension as well. It really just depends on your specific circumstances so you'll need to look at these things in depth on your own before you decide.

Consider also any fringe benefits that you currently receive. Will you continue to receive these fringe benefits into retirement? Sometimes you will and sometimes, many times, you won't. You may not think this is very important but sometimes those fringe benefits include health insurance which can be very important during your retirement years so consider these things carefully.

You should also consider taxes before you make a decision. Many times retirement will put you in a lower tax bracket which will immediately decrease the amount of taxes you have to pay. Also there are no FICA taxes due on retirement benefits like there are on salary. These two things alone could very easily make up for any shortfall in retirement income versus current salary income and may in fact be a deciding factor in your decision.

Finally, consider your personal feelings. Do you hate your job or do you love your job or do you really not care one way or another? Do you like the people you work with? Are you ready to leave it all behind just yet? These are serious questions that you need to ask yourself. These things really don't have much of anything to do with money, yet are still very important.

So there you have several very simple tips that you can use to help determine whether or not early retirement is right for you. Good luck!

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Rick Brunting

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