Early Retirement: Prepare for the Unexpected
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Permanent vacation--that's the goal
of many people who are considering early retirement. Time to
travel. Time to spend with family and friends. Time to follow
up on personal interests, whatever they may be. And plenty of
income with no money worries.
It is the "no money worries" part that
sometimes creates unpleasant surprises for early retirees.
(And by early retirees we mean people who retire in their
fifties.)
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Creeping (or galloping) inflation can
crimp your style
One issue to keep in mind if you are retiring
early is that in 15-18 years the cost of everything will double.
That has been the pattern for decades and is not likely to change
anytime soon. So what may seem to be ample funds for your
lifestyle at 55, may be far too little money at 65 or 70.
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Staggering health insurance
costs for early retirees
Be prepared to spend $500 to $1,000 a
month--or more--per person for health insurance if you can find
a company that will provide insurance to you at all--until you
are age 65 when you can sign up for
Medicare and
Medigap insurance.
Some early retirees have taken part time jobs just for the
health care benefits.
Too bored for words
After a couple of years of travel and
seemingly endless hours and days for personal interests, it is
not unusual for early retirees to find themselves missing the
challenges of the work world. They miss the workplace
camaraderie and social network--not to mention the respect an
early retiree commanded in his/her last job. One solution:
go back to work.
Or visit our
Retirement Fun
page for other ideas.
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A Real Life
Retirement:
A stock broker, Elaine,
retired in her mid-fifties and decided she wanted travel
to be her new Number One Priority. She contacted
several airlines and one of them hired her for their
security department as a wand lady--the person that uses
a detection wand on people going through airport
security. The pay was abysmal but the incredibly cheap
travel was fabulous!
In the training classes she
found out that she was only one among many retirees who
wanted a job with the airlines for the travel benefits.
Better yet, Elaine got
health insurance
benefits--a big issue with early retirees. Because
she was an empty nester, she was more than willing to
work the 5 p.m. to midnight shift. "Better than 20
years of getting up at 4 a.m. as a stockbroker," she
said. TSA now handles most of this security work, but
Elaine moved up to being a reservation agent--still
working the evening shift. Still flying all over the
planet. |
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NOTE: All names
on this site have been changed to protect individual privacy.
The stories are real, the names are not.
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25%
The percentage Social Security
currently reduces benefits for people who retire at 62 instead
of their full retirement age. |
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annuities
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