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Senior Retirement Tips :: Early Retirement Planning
Early Retirement Planning: 3 Keys to Planning for an Early Retirement
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Early retirement planning is about a lot more than picking out a set of golf clubs or figuring out what type of yacht you want to sail. It’s about diligence, planning and always keeping your dream in sight.
Remember, retirement and especially early retirement can last for decades, so you have to plan ahead to make sure you have the funds that will last you twenty, thirty, maybe even forty years.
To learn how, keep reading for 3 keys to early retirement planning.
Pension Payouts
Pension payouts could be your key to early retirement. When you reach the age of retirement or are handed an early retirement package, most plans will ask you if you want steady annuity payments that are paid out over a lifetime or if you want one big chunk.
Annuity payments offer stability, but you and your family can lose big time if you pass. For example, a husband may earn $5000 a month in pension payments, but if he dies, his wife may only see $2000 a month of that.
Also, taking out your pension as a payout gives you options and the freedom to invest your money now and how you see fit.
If you take a payout though, make sure the windfall goes directly into your IRA account – otherwise you could be hit with a hefty tax bill.
Social Security
When it comes to early retirement planning, social security is a thorn in many people’s side because it’s based on an average of your best-earning 35 years of work.
It’s adjusted for inflation, so if you retire too soon, some of those 35 years could be computed as zeros.
Let’s say you start earning at the age of 22. Thirty-five years will take you to 57, so if you don’t fill them, they’ll be included as $0’s.
For example, if you wanted to retire at age 55, the government would take the average of your 33 years of work plus two years of zero income.
That said, you can start collecting Social Security at age 62. However, you’ll be docked 5/9ths of a percent for every month you start collecting before the age of 65.
Real Estate for Early Retirement
If you can plan ahead, invest in property now while interest rates are cheap. Yes, housing properties are down.
Yes, credit is tight. However, interest rates are at an all-time low and the housing market is in a slump. There’s potential there for bargains and a chance to pick up investment properties that could carry you to an early retirement.
Real estate is key for early retirement planning and can help you turn that dream into a reality.
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SeniorRetireTips.com :: Early Retirement Planning