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Retiring early -- possibility or pipe dream?

If you're among the millions of Americans who dream of leaving the work force ahead of schedule, the first question you might ask yourself is: "How much is enough?"

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The answer depends largely on the type of lifestyle you wish to lead.

"A lot of people believe they'll be spending less during retirement, but those first few years you're likely to spend more on traveling and eating out," says Steven Silbiger, author of "Retire Early? Make Smart Choices." He estimates that many people require 100 percent or more of their pre-retirement annual income.

As such, you need to determine in advance whether you plan to spend your time relaxing at home or gallivanting to foreign lands -- and feather your nest egg accordingly.

Before you leave the 9-to-5 grind, Silbiger suggests completing a detailed analysis of your projected living expenses, while reviewing your portfolio to determine how much money you can safely withdraw without draining your reserves.

"If there's a significant gap there, that tells you it's not the time to retire," he says.

Retiring early
Preparation is key for those who want to leave the work force at any age, but especially for early-bird retirees. Keep your eyes wide open.
Shoving the job for sweet freedom
1. Early retiree caught off-guard
2. Setbacks foil best-laid plans
3. Plan to live to 90
4. Getting by until you can collect Social Security
5. Look before you leap

Early retiree caught off-guard
At age 54, Steve Warner, an accountant in Pensacola, Fla., wasn't looking to call it quits. But the industrial chemical firm for which he had worked for 31 years was in the midst of a major restructuring. Furthermore, rumor had it the company was headed for bankruptcy.

"I saw an opportunity to go ahead and take the early retirement package they were offering," he says. "I had some idea at the time about how much money we would need to retire and we had that much set aside in our investment accounts and savings."

Warner didn't begin tapping his 401(k) right away, even though the rules would have permitted him to begin taking distributions after age 55 once he left his job. He thought he could get by on the 18 months of full pay he was offered by his company, plus proceeds from the stock options he cashed in and the money he collected from his pension, which he was allowed to withdraw as a lump sum.

But there were surprises along the way.

Next: "Setbacks foil best-laid plans"
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