4/23/2012 3:14 PM ET|
5 reasons for early retirement
Perhaps you're watching younger workers pass you by or you're simply burned out. Retiring today might make sense.
Let's say you have been working in your career for 20 or more years and are well compensated, but now you are having second thoughts about continuing down this path. Here are some signs that early retirement might be right for you:
1. People with less seniority have duties similar to yours. It's natural to take on more and more responsibilities as you gain seniority and get promoted. As you get paid more, your boss expects more productivity. If you take a look around your team meeting and see that you are the most senior member and getting paid the most, it might be time to either take on even more responsibilities or perhaps move on.
2. Each Monday it is getting more difficult to come to work. You don't enjoy your job anymore and don't really like your co-workers. You are stressed all the time, which is affecting your mental and physical health. If this describes your situation, it's time to search for an alternative.
3. You've hit a plateau. Your career has hit the proverbial brick wall. Perhaps the next promotion requires something that you don't have, such as an extreme time commitment or stellar leadership skills. In today's corporate environment, all employees must keep evolving and grow. If you've hit a plateau, other people will catch up and pass you by.
4. You want a career change. You are bored with your job and want to focus on other interests. We all know the grass is always greener on the other side, but sometimes we have to find out if that's true or not. If you have the knowledge, skills and abilities to start your own business or if you want to simply try out another career, it may be time to go it alone.
5. You have enough side income to cover your monthly expenses. If you can pay the bills without the salary from your full-time job, early retirement becomes a real possibility. Diligent investing in dividend stocks, rental real estate, bonds and other income-producing assets can give you this option. Even if your investment income does not fully cover the bills, you can freelance or work part time to make up the rest of it.
If you are miserable all the time at your job and feel as if you are unable to advance in your career or achieve a work-life balance, perhaps it is time for a change. If your job fails to excite you and you have a significant amount of savings and investments, you should start to think seriously about your exit strategy.
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I had originally planned to work until age 70. I had worked for the same company for 20.5 yrs. But then we got sold to another company. The new company ran a sweat shop and was letting people go right and left. The new company was an 'at will' company. The CEO repeated many times in her writing what 'at will' meant. You can leave any time you want to and they can let you go any time they want to. There is no expection or promise of continued employment. So I just did the best that I could and lasted 18 months before they let me go. But if you have an income then as the article implies you don't need a job. You just need enough. I bought a singlewide mobile home back in Aug 1991 and had it paid off in less than 2 years. I was let go in Oct 2008 and then moved the singlewide out of the mobile home park on June 20, 2009. I moved it to a quarter acre lot where I am now paying property taxes of $662/yr compared to the lot rent of $3,720/yr that I was paying to the mobile home park. I'll collect a small pension when I'm 65 from the good company where I worked for 20.5 yrs. I'll wait until I'm 70 before collecting social security.
If I had borrowed just $100K at 5% and paid it back over 30 yrs then I would've had to pay back $193K. My lifetime income was only $699K. So you can see how not getting sucked into a 30-yr mortgage saved my life. The fact that I could just move the singlewide was really sweet. Too bad I had to keep it in a mobile home park all those years. But Farmington Hills, MI (near Detroit) says your home has to be at least 24 ft wide and conform to existing housing. That's why I comment on articles like this every chance I get to encourage and raise awareness for an end to exclusionary zoning so you'll be free to place any home of your choice on any residential lot that you can afford to buy. I saved as much money as I could and ended up buying single premium immediate annuities every time I accumulated $65K. So I bought 2 like that and then a 3rd with my 401K money when I turned 59 and a half. I ended up putting in $186K total but am getting $1065/mo for life. As I said I'll get a little boost to that at 65 and then social security at 70. Just make sure you spend less than you have coming in. I couldn't be happier. My time in the military made me appreciate being a civilian and that last 18 months at the sweatshop made early retirement that much sweeter.
That is exactly what I was dealing with three years ago when I decided to retire. Good job, friendly and efficient co-workers with a very solid company. After some 40 plus years in the workforce the routine was the single factor I was most weary of. My wife retired a year earlier with an excellent annuity and I am drawing $2,200 SS with an annuity and three IRA's. We have a financially secure retirement, with no mortgage, limited bills and a gorgeous little one year old granddaughter who is at the center of our lives. Never have regretted retiring, although initially I missed the interaction with my fellow working bees.
Remember those AIG commercials that proudly brandished the slogan, It’s Your Money? I decided to retire after I came to realize that, in truth, my money was really their money, which they lost to Goldman Sachs, and the only thing that was really mine in our economy these days was the rest of my life. That’s Priceless. Let’s hope those idiots at Master Card aren’t wrong about that.
With millions of jobs and thousands of factories shipped overseas and more planned to go the idea of working at one firm for 20 or 30 years is preposterous. Even being employed for that long will one day be impossible unless your are lucky enough to be in the right field.
Unless we seen major reforms by Congress, the vast majority of Americans will never retire and the ones that are left go in their 50's will never be employable again so plan accordingly.
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New rules mean that longevity annuities -- insurance against outliving your money -- are more attractive for retirement savers.
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