When is the best time to retire? The answer can be difficult, but if you carefully assess your current situation and find that it ticks most of the boxes, it may be the right time to retire early. Most of us would like to retire early, it gives us the freedom to travel on a whim or pursue a lifelong dream that we never had the time for during our working years. Look out for these signs you are ready for early retirement.
You’ve Cleared All Your Debts
One of the main reasons why so many people can’t retire early is because they are drowning in debt. Mortgages, car loans, student loans etc., they all have a massive impact on our ability to retire, we simply have to keep working to pay off our debts, until this is done, we can’t face the possibility of early retirement.
If you retire in debt, it can have a negative impact on your savings, it will eat away at your funds, making it difficult to live the life you always wanted during retirement.
If you’ve cleared all your debts, all your money goes towards you and the betterment of your life. When all debts have been wiped clean, you have a lot more flexibility when it comes to spending your money.
You’ve Carefully Planned Your Retirement & Established Your Needs
Another sign you are ready for early retirement is when you’ve worked out your budget and you’ve reached your goals. If you’ve worked closely with a professional and done some retirement planning in Melbourne with a reputable company, early retirement may be a viable option. If you know exactly how much you need to thrive and live the lifestyle you’ve always wanted, and you’ve reached those objectives, it may be time to break free from the shackles of work.
Establishing your needs should include essential expenses such as:
- Housing Costs
- Transportation Needs
- Health Care
If you’ve calculated correctly and you’ve noticed that you are beginning to reach several of your goals, you can pinpoint exactly when to retire. If you are sure you’ve done your homework, you can set a date and look forward to spending many years in retirement.
You’ve Zero Financial Responsibilities
A lot of people simply can’t retire early because they still have to support their children. If your kids don’t rely on you financially, early retirement could be a genuine possibility.
Children don’t just need support during their adolescent years and throughout college, they sometimes need money during their 20’s and 30’s. If your kids are settled and don’t require financial help, you should consider your current situation with regards to early retirement.
If you’ve assessed your situation and find that most of the signs point towards early retirement, you should discuss your thoughts with your financial planner. If you make the decision to retire early, you can start thinking about how you’ll spend your time in retirement. Will you run a small business, or would you prefer to travel the world? The choice is up to you.