6 signs that you are ready to retire early

Retirement » 6 Signs That You Are Ready To Retire Early

No. 1: You are emotionally ready to quit working
No. 1: You are emotionally ready to quit working © EpicStockMedia/

Both the big picture and the fine details of your financial and emotional states are important to consider when assessing your readiness for early retirement. If you're not emotionally ready to quit working, you may not be ready to retire.

"What are you planning on doing that will continue to allow you to enjoy your life, allow you to stay active mentally, emotionally and spiritually?" asks Richard Reyes, a CFP professional and coach with The Financial Quarterback in Maitland, Fla. "In retirement, every day is Saturday."

Being ready financially is a no-brainer. Jeff Currie, an adviser with Icon Financial Services in Boise, Idaho, offers this quick assessment of financial readiness: "no debt, a good pension that includes health insurance benefits, good savings and low expenses. All of these factors can lead to a person retiring early. In most cases, the early 50s is about the most realistic and early I have seen. It usually involves an inheritance to boost a person's normal assets."

While some tend to associate retirement with a specific age, "It's really about getting your budget and liabilities under control, then having a clear understanding of the resources available to create the desired and consistent retirement income you need," says Sean Lee, a financial adviser with SPL Financial in Salt Lake City.

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Fed up with the workplace and ready to retire early?

Every day's a Saturday when you're retired. So if you're younger than 65 but ready to leave the workforce, consider if you can retire early. First, follow a retirement budget for at least six months. Expenses may drop somewhat, but not as much as you might think. Also, since Medicare doesn't kick in until age 65, you need to have adequate health coverage.

Next, are your debts paid off, or nearly paid off? Ideally, you no longer have a mortgage on your home. And if you have children who are still financially dependent on you, you may need to either cut the cord or continue working.

Last but not least, you need a portfolio that's large enough to withstand market losses. One financial firm estimates that you need to have saved eight times your pre-retirement income by age 67 to ensure a secure retirement. If you want to retire earlier than that, you probably should shoot for a higher multiple.



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