Early retirement is sometimes thought by some people because they think that they have worked for decades so they feel that it is time to enjoy old age. Although it feels good, you should not be hasty in deciding to retire early.
Why is that? The reason is, early retirement makes you not as productive as you are now so that the provisions you have must be really sufficient. If you are careless in deciding to retire early, you could have financial problems in your old age even though at that time you can no longer be productive. This is of course a big risk of making the family miserable in old age.
Therefore, there are several things that must be considered before deciding to retire early. The goal is to live comfortably without any problems in the future. Curious what things need attention? The following include:
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Determine the Target of the Pension Fund
The first thing that needs to be done if you intend to retire early is to determine the target. For example, at the age of 45 years you wish to not work anymore. The goal is to be able to estimate how much money you need to save each month so that early retirement ends happily.
For example, you are currently 20 years old and want to retire at 45 years old. So in the 25 years before retirement, you should save as much as possible every month with a certain amount of money, for example $2 million per month.
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Prepare Funds for Children
One of the most important things that need to be prepared carefully before deciding to retire early is funds for children, especially the cost of education. One way to prepare funds for children is to buy education insurance up to college.
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Calculate Debt
Debt is a natural thing owned by everyone. In fact, most people must have installments or debts. Calculate how much debt you have, including the monthly installments that must be paid. By calculating debt, it will be easier to determine how much money you have to save each month from your monthly income.
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Calculate the Cost of Living
Apart from calculating debt, it is also necessary to calculate the living costs incurred so far, for example, such as the cost of clothing, meals, transportation, installments, recreation, and so on. From the cost of living, you can see how much money is needed for 1 month when you retire. So you can estimate the money that will be saved each month.
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