Some Things To Consider If You Are Thinking About Taking Early Retirement

Some people have no choice in their retirement plans. Even a lifelong career can come tumbling down around you as it did in my case.

I chose Medical Technology as my profession. No one in my family was ever in the medical profession, but I had a friend who was influential in my decision. I've never regretted that decision.

After getting a degree, I worked for 30 years in this profession. I worked the last 18 years in our local hospital, and I was a loyal and hardworking employee. The hospital was facing budget cutbacks, and I was one of the employees who was asked to leave full time employment. I was devastated!

I had not planned to retire from work at the age of 55! I thought I would have at least another 15 years of working full time.

I have a daughter who entered the work world after getting her barber's license at the age of 18. She has been working full time and now, at the age of 50 she finds she wants to quit work. After years of working on her feet all day, she is emotionally tired, and also is having neck and back problems. She asked me for advice on what I think she needs to do.

She is single, has one grown child, a house that is mortgage free, and has no car payment.

She no longer enjoys cutting hair all day. It has become a job that she dreads. Most of her clients are older retired men and they love to share their ailments. She is weary of hearing them. Her clients love to talk politics, and they try to involve her. She tries very hard to avoid these conversations.

I WILL TRY TO GIVE MY DAUGHTER SOME GOOD ADVICE

1. Make a post-retirement budget. Figure what your cash flow will be like when you are no longer producing income. I know from my own experience your expenses may drop a little in retirement, but you will see they don't drop as much as you think they will. Determine how much money you will need each month to live comfortably.

2. Early retirement will prevent you from collecting social security benefits. This will start at age 62 or 65 whichever one you choose.

3. Medicare does not start until age 65. You must have good health insurance. Since you were self employed, you do not have employee health coverage. Health insurance costs are rising faster than inflation. Try to find coverage for dental and vision care.

4. You should have insurance to cover long term care. I failed miserably by not taking care of those plans, and now I am too old to afford the high premium.

5. Don't forget about inflation! I would figure at least a rise of five percent a year.

6. Pay off credit cards and any other debt you have. My daughter is lucky not to have any student loans, a car loan or a mortgage on her house.

7. Stop making any unnecessary purchases.

8. Stop buying lunches out; take your lunch to work.

9. Learn to live frugally.

How can she produce income after she retires at age 50? There will be a big gap between now and age 62 when Social Security starts.

1. She could: Sell her barber shop.

2. Sell her mortgage free home, get a reverse mortgage, or move into a small apartment and rent out her house.

   She could consider renting out a couple of rooms in her house.

3. She could pull out the equity in her house, but then she would have another debt!

4. Move in with her daughter. She would say this is NOT an option!

5. Work part time in another barber shop to produce some income.

6. Look into other professions that don't require standing on her feet all day. She would have to study for another profession.

   This would require time and money to learn.

7. She could hire more barbers and keep the shop. She would still have the stress of ownership, and unless she finds a good manager, she would still have to oversee the day to day business.

If she finds she could live within this six month trial budget, I think she can now consider quitting work.

I WILL REMIND HER OF THE FOLLOWING DISADVANTAGES OF QUITTING WORK NOW:

She will miss the day to day contact with clients. She doesn't think she will, but I know how much I have missed my friends from work. I know how soon those friends forgot all about me. She will be separated from co-workers that have been a big part of her life. She may find herself very lonesome.

She should look for new hobbies to keep herself busy.

1. She will need to make new friends. This will be challenging for her, but also rewarding. She will have a chance to meet like-minded people she would enjoy talking to. She can look into volunteer work available in her area.

   She just may find herself discussing what truly interests and excites her (instead of the usual politics).

2. She may find the life she wanted is actually a boring life.

3. I do think since we people are sociable animals, having a job is a good thing for us, mentally and physically.

4. She will probably miss those lunches out, and being able to buy clothes whenever she likes.

5. She will miss the occasional movie she can now afford, but will not be able to afford if she quits work now.

   She may have to be content staying at home and watching movies on Netflix.

There are many pros and cons about early retirement. My daughter will just have to weigh her options carefully.

I hope I have given my daughter some good advice on taking early retirement. I do not want her to make some of the mistakes I have made.

If I had my life to live over, I would have planned better for retirement.

There are many free programs to be found on the internet to calculate you own ability to enjoy an early retirement.

This is not a decision to take lightly. If she decides later on she made a bad decision, she may have to go back to work!

I always say: Nothing ventured; nothing gained.