Is early retirement a possibility?

Hey there, time traveller!
This article was published 27/12/2023 (709 days ago), so information in it may no longer be current.

Dear Money Lady readers,

I wanted to do something a little different as we all wrap up the end of the year.

I always get questions from people who want to retire earlier than the benchmark of 65, which honestly surprises me with so many “laptop class” employees now working from home. But the allure of leaving their careers and finally being free can’t come fast enough for some. With that in mind, here are the questions you must ask yourself to be able to break free in 2024 and finally do that hard stop to working.

Be truthful with your answers; if nothing else, this will be a good exercise to help you understand what you need to work toward to retire earlier if you can. Good luck! Who knows? 2024 could be your year to break free!

• Is all your debt paid off? All debt means, credit cards, lines of credit, mortgages, and car loans.

• Are you really ready to give up working, or are you just tired of your current position and in need of a change?

• Will you need to support anyone other than yourself? If so, for how long, and how much will that cost annually?

• Can you downsize your residence or move to a less-expensive area to lower your monthly expenses?

• Will you have a consistent monthly revenue stream that is long-lasting and able to sustain you during times of uncertainty? Preferably in addition to CPP and OAS government benefits.

• Do you have any large future expenditures you have not already saved for? Can they be cancelled?

• If necessary, could you make sacrifices to live a more minimalist lifestyle?

• Have you made a financial budget for the future and can you write out exactly how you can, to the best of your knowledge, envision your retirement? How much do you anticipate this will cost in today’s dollars? What about inflation and taxation? What are your plans for assisted living should you need care as you age?

• How will you socialize in retirement and how much will this cost? Do you plan to continue club memberships or join new ones, and how much will this cost?

• Have you thought of ways to fill your time in retirement? Does your retirement partner want the same things as you and are they willing to make the same sacrifices to retire early?

So, how did you do? Do you have a budget or are you now going to begin to make one?

Short of knowing when you will die, there is no real way to know whether you can really retire early. But, one thing is certain, you must make sure you have a plan for the future and a strategy to stay in retirement; because once you give up working for good, very few will want to go back to it.