If you want to retire at 55, there are things you will need to consider that someone who retires at sixty-five will not have to think about. Below I have outlined three major things to consider before you retire at 55.
Longevity – A Factor To Consider If You Want To Retire At 55
If you retire at 55, assuming you will have an average life expectancy, you will need your assets to produce income for a longer period of time. This means you need to have an accurate idea of what you spend each year, and a steady source of retirement income that is sufficient to meet your expenses.
Social security won’t start until age sixty-two, at the earliest, and there are penalties and restrictions on accessing retirement account money prior to age fifty-nine and a half. This means if you retire at 55, you will need to have other sources of income, at least for a few years.
Here are a few resources that will help you figure out how much money you will need to retire at 55:
- 5 Things You Must Do 5 Years Before Retirement
- 5 Planning Decisions Affected By Life Expectancy
- 4 Steps To Determine How Much Money You Need To Retire
- 5 Key Things To Know About Social Security Retirement Benefits
Consider Health Insurance Benefits Before You Retire At 55
Keep in mind, Medicare coverage won’t start until age sixty-five. If you are planning to retire at 55, make sure you will have a secure source of health insurance coverage that will provide for you until you become eligible for Medicare. This should become easier starting January 1, 2014 when provisions of the Affordable Care Act kick in.
Here are a few resources you may want to use to learn more about health insurance before you retire at 55:
- 5 Things You Must Know About the Health Exchanges That Start January 1, 2014
- My Health Insurance Is Through My Employer. What Do I Do When I Retire?
- I cannot get health insurance through my job. What are my options for coverage?
- Pre-Existing Conditions And Health Insurance
If You Retire At 55, What You Will Do With Your Time?
An extended vacation sounds nice, but some find the experience is not as fulfilling as they thought it would be. When thinking about early retirement, give careful thought as to what you want to do with your time, and your money.
For example, if you have expensive hobbies, you will want to consider that extra cost when you determine how much money you will need to retire at 55.
If you’re not the leisurely sort, and you do decide to retire at 55, you might consider starting a small business, a consulting business, or finding some alternative way to earn extra money.
Here are a few ideas to help you find other sources of income if you retire at 55:
- Earning Extra Money Can Be Easier Than You Might Think
- 6 Steps To Take Before You Start A Consulting Business
- Second Career Ideas
- I’m Thinking About Starting A Business. Where Do I Start?
Dana Anspach, CFP®, is one of only a handful of people to hold the Retirement Management Analyst designation. She has been About.com's MoneyOver55 Expert since 2008 and is the founder of Sensible Money, LLC. You can learn more about Dana's work in her bio.