The present situation is unclear. The Government is telling us that we will not be able to retire until the age of 66, This being adjusted upwards at a later date. In the next breath they are saying that those past 50 who become unemployed, will in most cases never be able to get employment again. What ever is the case, If you are approaching 50 then perhaps you should start making preparation.
Early retirement is an ideal for a number of persons, notwithstanding the fact that financial independence should coincide with it. The decision to retire early is a critical one; a decision that you should only take after carefully weighing the pros and cons. In addition, your final decision should reflect the bearing of the pros and cons on your unique circumstances.
Pros of retiring early
i) Live longer
ii) Health and vibrance
iii) Access incentive plans/ special inducements
iv) Longer period with lower medical risks
v) Full benefits in certain occupations
Cons of retiring early
i) Higher risk of outliving your retirement savings
ii) A higher retirement savings shortfall
iii) Lower benefits from defined contribution plans that mature earlier
iv) Extra burden to plan non-financial aspects of early retirement
You are likelier to live longer if you retire earlier. This is because life expectancy averages are on the rise and early retirees tend to have less job-related stress than those who prolong work. This advantage can become a disadvantage if you do not have the means (or the luck) to sustain a longer life. A person who retires at 50 can easily live for 30 or more years. Surviving this period puts earlier retirees at risk of outliving their accumulated savings - especially with increased medical expenses and the rising cost of living.
Early retirement affords retirees the opportunity to enjoy their golden years while they are vibrant and fitter. This also suggests that the early retirees might actually spend a longer period of retirement without worrying too much about medical bills or poor health. On the other hand, underprepared early retirees may suffer a harsh reality check. The burden of a fulfilling retirement- in both financial and non-financial terms - is heavier for the early retiree.
Early retirement can be advantageous when you undertake planning for it and your employer supports it with an incentive plan. Although retirement plans understandably offer far less than you would get if you worked until the mandatory age, the opportunity is there for the early retiree to pursue other income opportunities. The downfall with this is that the early retiree may need to find alternative income options, since there is usually a higher shortfall for early retirees. This shortfall is also created by the inaccessibility of full benefits from the employer and/or the state.
Certain jobs offer full benefits to employees once they complete a specified service period. This means that some persons can retire earlier (at 50 or 55) and still receive full benefits. For employees in this position, early retirement can be advantageous. Still, this does not negate the burden of planning properly for a potentially longer retirement period and the higher risks of an earlier retirement.
Early retirement is risky business when you fail to prepare adequately for it. The happiest early retirees are those who plan for it and do not accept an earlier retirement than they know they can manage psychologically, socially and financially.
Early retirement is an ideal for a number of persons, notwithstanding the fact that financial independence should coincide with it. The decision to retire early is a critical one; a decision that you should only take after carefully weighing the pros and cons. In addition, your final decision should reflect the bearing of the pros and cons on your unique circumstances.
Pros of retiring early
i) Live longer
ii) Health and vibrance
iii) Access incentive plans/ special inducements
iv) Longer period with lower medical risks
v) Full benefits in certain occupations
Cons of retiring early
i) Higher risk of outliving your retirement savings
ii) A higher retirement savings shortfall
iii) Lower benefits from defined contribution plans that mature earlier
iv) Extra burden to plan non-financial aspects of early retirement
You are likelier to live longer if you retire earlier. This is because life expectancy averages are on the rise and early retirees tend to have less job-related stress than those who prolong work. This advantage can become a disadvantage if you do not have the means (or the luck) to sustain a longer life. A person who retires at 50 can easily live for 30 or more years. Surviving this period puts earlier retirees at risk of outliving their accumulated savings - especially with increased medical expenses and the rising cost of living.
Early retirement affords retirees the opportunity to enjoy their golden years while they are vibrant and fitter. This also suggests that the early retirees might actually spend a longer period of retirement without worrying too much about medical bills or poor health. On the other hand, underprepared early retirees may suffer a harsh reality check. The burden of a fulfilling retirement- in both financial and non-financial terms - is heavier for the early retiree.
Early retirement can be advantageous when you undertake planning for it and your employer supports it with an incentive plan. Although retirement plans understandably offer far less than you would get if you worked until the mandatory age, the opportunity is there for the early retiree to pursue other income opportunities. The downfall with this is that the early retiree may need to find alternative income options, since there is usually a higher shortfall for early retirees. This shortfall is also created by the inaccessibility of full benefits from the employer and/or the state.
Certain jobs offer full benefits to employees once they complete a specified service period. This means that some persons can retire earlier (at 50 or 55) and still receive full benefits. For employees in this position, early retirement can be advantageous. Still, this does not negate the burden of planning properly for a potentially longer retirement period and the higher risks of an earlier retirement.
Early retirement is risky business when you fail to prepare adequately for it. The happiest early retirees are those who plan for it and do not accept an earlier retirement than they know they can manage psychologically, socially and financially.
A major aspect of retirement planning is determining your
income needs. Now, you can read a clear instructional guide on how to
calculate your retirement needs: http://retirement.helium.com/how-to/9181-how-to-calculate-your-retirement-income-needs
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