How to Plan for an Early Retirement

Hint: It’s a little different than the usual retirement planning. When you want to retire early, there are a few extra considerations you need to think through.

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(Image credit: Getty Images)

Dreaming of an early retirement? You’re not alone. In the midst of the pandemic, the number of retirees 55 and older grew by 3.5 million according to the Pew Research Center. But it’s not just those over 50 looking to retire, according to a recent study by Northwestern, millennials are twice as likely to be thinking about early retirement as Gen Zers and three times as likely as Gen Xers.

An early retirement sounds nice, though there are challenges. Consider you may be forgoing additional savings, your Social Security benefits may be impacted if you stop contributing, and with life expectancy increasing over the years, you may have to rely on your savings for longer than if you waited. But if you really want to get serious about early retirement, then I suggest taking a careful, thoughtful approach. After all, you only want to retire once – you will want to get it right the first time.

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Disclaimer

Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Michael Aloi, CFP®
CFP®, Summit Financial, LLC

Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC.  With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.