Sunday, May 5, 2013

4 Barriers to Early Retirement and fix

Many of us dream of leaving the work area while in the 40's or 50's but remained until the age of 65. In fact, in 2011 Retirement Confidence Employee Benefit Research Institute survey found that 16 percent of retirees left the workforce before age 55, and 15 percent do so before 60. Early retirement is a goal persuasive, but it will be difficult to achieve.

"Retirement is ultimately a mathematical equation involving current income, current cost, the savings rate and the cost of the future," said Robert Brokamp, ​​a certified financial planner and senior adviser to The Rule Mop Mix-mix things Retirement newsletter You. "The more that you can do now, and the more money you save, the sooner you can retire."

There are four major obstacles to early retirement:

You have less time to earn money. If you start working at age 20 and retire at 65, you have 45 years to generate income. If you retire at 45 instead, you only have 25 years to achieve the same result.

Those investments have less time to compound. Until early retirement to give you a bit of time to get the money, it also gives money in less time to grow. That means a smaller nest egg when you call stop.

You can view the images on your savings. The average American lives to be about 80. If you retire at 65, your savings should take 10 to 20 years, if you retire at 45, they need to take more than two times longer.

To pass some features of traditional pensions. If you retire at 45, will this year before you have access to Medicare or Social Security. You will also face stiff penalties if you tap your retirement accounts early.

This is not to say you should not plan to retire early. This is a laudable goal, and that I set for myself. But if you're serious about early retirement, you need to be smart with money given tomorrow, today.

Brokamp suggests that for many people, semi-retired, who continues to work part time or period, is a good compromise. "Semi-retirement is less strain on your retirement portfolio and can give you access to other benefits, such as health insurance," he POINTS.

Even semi-retirement may be more realistic than early retirement, is still not for the faint of heart. You have to work hard to make it happen. You will need to:

Considerable savings. Semi-retired plan far in advance, building a huge nest egg before they move.

Simple lifestyle. "The less you can live in the moment, before you can retire," said Brokamp. "I often say that living below your means such as saving for retirement twice."

Continuing work. Although semi-retired are not full-time jobs, they still work for a variety of reasons. This extra income means that they do not use their savings as easy (or deep), and work to give them the opportunity to spend time with others while doing something useful. According to the Retirement Confidence Survey, 23 percent of retirees have worked for pay in 2011.

Purpose. Most importantly, a semi-retired tend to pursue the project and passion to align their core values, which makes an additional year is much more meaningful work.

Bottom line: Every time you decide to do this, the pension can be whatever you want. You can go back to school, traveling the world, working part-time on a pet project or writing the great American novel. But to pay for these things,, the time to start planning now.

To learn more about semi-retirement, pick up a copy of the work book ends-Packaged Bob Clyatt the Less, Live More. Filled with case studies and practical advice. Better yet, check it out from the library, and bank books for the price of your retirement savings.