Information In Regards To Early Retirement Questions And Its Potential Problems

Choosing to retire ten, twenty or even thirty years ahead of the normal time might

come down to an array of different reasons, some more justified than others. Simply wishing to stop because you're tired of work might result in it being a bad idea, whereas those with medical issues might have to stop and be forced into retirement. Whatever your reasons, it's important to think through the exact consequences of early retirement and how much you will actually need to keep living the lifestyle you have. For some, it'll be less, others, it will be exceedingly more. Here's some information in regards to these early retirement questions.

What Consequences Are There Of Early Retirement?

An unexpected result of early retirement can be the loss of focus on one's life. A job gives someone something to work around, a focus on which they can try to improve upon or at least fill their time. When that's gone, it means they have to fill a big portion of their time with activities. The issue is that many people don't consider what they will do with their time and simply leave it until they have finished work. Then when they have nothing to do, they feel this loss of focus and purpose.

The main issue with early retirement is that while normally you'd have longer to save money and less time to spend it in, the reverse is true for early retirement. You'll have less time to save and more time to spend it, meaning you'd have to have an exceptionally increased income over the average person. Hoping that your money will last you until Social Security happens might not work for some, as it comes at a reduced rate and might not be able to sustain your lifestyle. This is excluding any emergencies that might arise and require you to dip into your savings to fix.

Early Retirement Necessities?

First, we'll assume that you're retiring at forty. With an average lifespan of around eighty in some first-world countries such as the US and UK, that extends your retirement period to around forty years, instead of twenty. If you work from between 16-18, this leaves you with just over twenty years to gather enough to cover your lifestyle for that retirement period. If your living costs are around $40,000, then this could be, including inflation, up to $1,000,000 required for maintaining your lifestyle for the next forty years.

Figuring out the costs of the entire retirement plus inflation is a complicated task, but following rule of thumb, you can multiply that figure by 25 to come up with a decent result, if you exclude Social Security money you would apply for. This would mean you'd have to have $1,000,000 in retirement funds for between thirty and forty years. An exceptional amount for the average person and this might be below the costs you had figured out for yourself.

by: Brittany Beal

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