If you’re considering retiring early, there are a few things you need to cross off your list before setting sail into your retirement years. For many people, one of the first things that comes to mind is money. While your financial situation will of course come into play in your decision to retire early, let’s first look at other key factors.

Benefits to an Early Retirement or Part-Time Work

Retiring early could mean you stop working altogether, or it could mean you decide to do part-time work, perhaps in a new area you’ve always wanted to try or where you feel your current skills would translate well. You first want to consider whether there are any benefits to an early retirement or part-time work at your current company. Your employer could offer a way for you to keep working at a reduced capacity.

You could also get a part-time job elsewhere that aligns well with your passions or is something completely new. For example, say you worked in engineering or construction for 30 years and now want to do part-time handy work at a home improvement store. That’s a clear extension of your skills and interests. Or if you’ve been at a desk job for most of your life, you may now want to find something that offers more opportunities for travel.

The extra income is certainly a plus, but this decision is ultimately about whether you want to keep working, even if you don’t have to. What do you want your retirement to look like? Maybe you don’t want to stay at the same job, seek fulfillment from part-time work, or wish to fully retire.

Here’s an exercise to help you get a clearer image of what you want: Take a blank piece of paper and write down what your dream retirement looks like. Don’t factor in money just yet; simply envision yourself in retirement living your ideal life. Consider where you want to live, how much and where you want to travel, who you want to spend time with, what organizations you want to be involved in or support, and so on. Everything that falls into this picture of your dream retirement is up for discussion.

Financial Considerations

Now that you have that vision in mind, it’s time to factor in financial considerations for yourself and your dependents. In terms of your own situation, you want to make sure you have a solid retirement income plan. This plan is built based on your need for income and accounts for potential health care costs, keeping up with inflation, tax implications, etc.

To create a robust plan, you may want to sit down with a financial advisor who can assess how much income you need, where it is going to come from, and in what order it should be taken out of your various accounts. All these financial considerations can help you determine whether an early retirement is in your future.

Another factor is your dependents. Who are the people in your life that depend on you or who you want to help? For instance, you may want to contribute to your kids, grandkids, or even your nieces and nephews’ education. Also consider paying off any debts so as not to leave them behind for your spouse or children.

Knowing if you can retire early can provide a lot of peace of mind, both in terms of your lifestyle and the financial future of yourself and your family. If you choose to seek professional guidance, whether you’re 5 or 10 years from retirement or already retired, we recommend working with a financial advisor that specializes in retirement. Planning for retirement is more than just accumulating savings, there is an emotional aspect that’s just as important. It’s beneficial to have an advisor who understands this and has worked with individuals and families like you and yours.

Staying Active and Engaged

Early retirement can leave you with a lot of free time – what you plan to do with it is up to you. Some retirees find that they become less active and engaged in retirement. If you’re no longer going to work and having daily interactions with your colleagues, it can be difficult to adjust socially and mentally, especially if that sense of connection is lost.

This can even play into your physical health. Sometimes, when people don’t stay active in their communities or in activities they care about, their health can take a turn. You want to make sure you have a plan for staying active. This could mean taking on new and exciting endeavors in your life or becoming more involved in areas you’ve already been a part of, like volunteering in your community or with your church.

Pursuing Passions and Hobbies

Do you have a hobby that you’ve always wanted to try or practice getting better at? Is there an organization that you want to be involved in or are already involved in but couldn’t make time for before? Retirement can be a perfect opportunity to pursue your passions and interests. Maybe you love to golf, express your creativity through art, or get together with friends to play a weekly game of pickleball. Whatever it is, hobbies are a great way to get your mind and body more active and engaged during your retirement years.

Importance of Social Connections

Social connections can be so consequential to the quality of your life in retirement. For instance, if you move out of a community that you’ve been in for a long time to a vastly different environment, you may end up wanting to move back to be closer to your family and friends. Without regular social interactions, you could also experience a health decline. There is a significant correlation between physical health and social connection. With that in mind, you want to have a plan, no matter where you reside, for maintaining strong social relationships within your community.

Health and Wellness Impacts

It’s a fact of life – you can’t slow down time. Everyone ages, and many people run into health issues that they have little to no control over. When you decide to retire, consider what the health and wellness impacts are going to be. For some retirees, they’re even more committed to fitness and a good nutrition regimen during this phase of their lives. With more time to focus on yourself and your wellness, you can choose to make healthier decisions in retirement. Being financially set is obviously important but extending the time you have left to enjoy doing what you love can be most fulfilling.

Personal Fulfillment and Leaving a Legacy

You may have more than what you need for retirement. If so, the next step is to think about your legacy, fulfillment, and purpose. What do you want to leave behind and how do you want to be remembered? This can include how you want to spend or give away your money. Perhaps you want to leave a large sum of money to your children, or just enough to enhance their lives while still teaching them the value of hard work.

If you have a charitable giving strategy, consider how you want to benefit organizations you care about. The mark you leave behind and what people are going to remember you for most becomes more of a focal point as you approach your 60s, 70s, and 80s. However, legacy planning can certainly take precedence if you’ve positioned yourself well for an early and successful retirement.

At Johnson Brunetti, we are here to help you in every phase of your retirement journey. If you’re considering retiring early, our advisors can help you navigate your decision and craft a sound retirement income plan. With a plan in place, you can get a realistic financial picture of where you stand and how you can get to where you want to be.