Top tips when preparing for a very early retirement

None of us knows how our professional life may be impacted by internal and external forces, so if you need to retire early, how should you strategise?

For the majority of us, when we think of retirement, it is a far off concept. Something that will occur in the very distant future and really only requires participation in a pension scheme. 

But life doesn’t always pan out like that and for whatever reason, whether it is familial obligation, a health issue or just a personal choice, you may find yourself retiring much sooner than you previously anticipated. 

If and when that happens, how might you best prepare?

Is it feasible?

One of the main reasons, if not the sole reason, that many people retire in their 60s and 70s, is to save enough money to support themselves without full-time employment. If you are in a situation where you are going to retire long before that, in your 40s or 50s, then you need to know that you are in a financially sound position.

First things first, speak with a financial advisor to ascertain what is financially possible for you. Because you are unlikely to have contributed enough to your pension, in order to achieve financial security early on, you may have to consider making alternative investments and looking into other streams of revenue. 

Make sure that you have a clear and accurate summation of your expenses and income, so you can strategise for the future and ensure that, when you retire early, you will have enough to live on. Additionally, don’t forget about any pay you may be owed, in terms of lieu hours, overtime, any bonus you were due or possible commission. 

No surprises

Don’t make the mistake of omitting previously covered benefits in your overall strategy. Many jobs come with additional perks that are part of the compensation for your role. For example a contributory pension scheme, gadgets such as phones, laptops and tablets, a company car and private healthcare. 

These will of course be discontinued once you leave the job, so, before you go, you need to come to a decision on what you will be holding on to at your own expense and what you are willing to let go of. 

You likely will want to hold on to your health insurance, so make sure that you get in touch with the provider, work out a new deal and sever all ties with the company, so you are the sole financier of the plan. Additionally, there may be an option to continue leasing or even buying the car from the provider, independent of the company. 

All of these costs should be factored into the plan before you go, as they can be quite hefty and if forgotten about could really throw off your strategy, potentially putting you in the red from the get-go. 

Sturdy infrastructure

It is a serious decision, deciding to take advantage of opportunities for early retirement and you are going to need to develop a strong network of support, from co-workers, friends and family. 

To leave on the right note, but also to access any support and advice that may be on offer, arrange for a private one-on-one with your manager and employer, to hash out a plan, but also to agree upon an acceptable leaving date. You may also be asked to write a formal letter to the employer or HR department. 

This is also an ideal chance to enquire about any early retirement schemes that you can take advantage of, as well as express to your employer and peers your appreciation and hopes for a continued relationship outside of the working environment, if desired.  

Are you all in?

Early retirement, as a means of freeing up your time for something else that has taken precedence makes sense, however, if you only require a little bit of extra time and are on the fence about jumping head first into full retirement, consider alternative options. 

For example, you may find that semi-employment via a part-time job would suit you more. So, why not ask your employer about reducing your hours? Or, if the job itself is part of the problem and you want a clean break, maybe leverage a few connections to get a part-time job elsewhere, or even move industry and career altogether. 

It doesn’t have to be all or nothing. In fact, it may suit you more to ease into your new lifestyle and change things around as you navigate your new path. What matters is that you are deliberate and confident in your choices, so you know every decision you make is with your own longevity in mind. 

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