The retirement age in the United States is 67 years old to receive your total retirement benefits. While many people have no issue or think they have no choice but to wait until this age to retire, early retirement has been an increasingly popular concept.
Retiring early has a lot of benefits, but it’s not for everyone. If you’ve been considering early retirement, here are the top ten things you can do when planning for early retirement.

1. Pay Off and Avoid Debt
The first thing you need to do to plan for early retirement is to pay off any debts you have and avoid taking on any more. While this might seem obvious, it’s essential to early retirement and needs to be mentioned.
Every long-term loan or debt can jeopardize the assets you can use in your retirement. Also, if you have debts you’re regularly paying off, that’s money you could be using as living expenses in retirement or for other things since you’re not earning your previous income.
Debt is an unnecessary and avoidable expense you don’t want when you retire. That’s why paying that off beforehand and avoiding it afterward is essential.
2. Figure Out How Much You’ll Spend in Retirement Annually
When you retire, you’re likely living off far less money than before. That means you need to be more aware of your spending and how much you’ll need when you retire to live comfortably and the lifestyle you want.
First, you’ll want to look at how much your bills will be in retirement. This includes any housing you are still paying for, utilities, groceries, and other things you will spend your money on throughout retirement. You’ll also want to consider how much spending money you’d like to have to enjoy retirement.
You can find your annual retirement spending by tallying up your monthly expenses and multiplying that by 12. It’s best to increase that final number by 10-20% to give you a buffer if you need or want to splurge.
3. Calculate How Much You’ll Need in Savings
After calculating your retirement spending, you should consider how much you’ll need to have in savings. A good rule of thumb is to have around 25 times your annual retirement spending.
For example, if your annual retirement spending is $45,000, you should have over $56,000 in savings per retirement year. You need to think about your retirement savings as your nest egg. Since you won’t be working or earning as much money, you need more for those “just in case” situations.
A great way to save for early retirement is to use an IRA account so you can’t easily withdraw from it and spend your retirement money too soon.
4. Adjust Your Current Budget
Once you have a better idea of how much you’ll need to have in savings and your annual retirement spending, you can adjust your current budget. You’ll want to adjust it so you can set the appropriate amount aside each month for your retirement without stretching yourself too thin.
Many people with a goal of early retirement live on only 50% of their income (sometimes less). You can figure out what works best for you, but you’ll want to adjust your budget so you’re living on far less than you have so that you can set that aside for early retirement.
5. Make Smart Investment Choices

After taking care of all your fixed expenses for your early retirement, you can consider using the extra income to make intelligent investment choices. This can be incredibly beneficial and help you bring in some income without doing anything other than investing.
While investing is always a risk, working with a financial advisor or someone who knows the markets can help you make wise investment choices. This way, you get the best returns and a balanced portfolio and generate long-term growth and wealth.
6. Consider Your Health Insurance Plan
Whether you’re retiring at 35 or 65, you must consider your health insurance plan. Since you won’t be getting health insurance through your employer any longer, this is a vital part of early retirement planning.
Healthcare costs are one of the biggest costs people face as they age. You’ll want to look into an HSA account so you can contribute to your health savings plan whenever you need it as you age and are in retirement.
You might prefer to get health insurance through the marketplace or another source, but an HSA is a great tool to consider. Either way, thinking about your health insurance plan is necessary.
7. Think About Retirement Income
Just because you retire doesn’t mean you can’t earn income. You can find a less stressful job that provides “play” money or other benefits you could use in retirement. Some people work part-time at retail stores for discounts, fun, and to get out of the house.
You can choose something you’ve always had a passion for that you never got to explore before. The options for retirement income are abundant, so thinking about what would work best for you is key.
How you’ll bring in retirement income can vary, but having options in case you need the money or want it is important.
8. Have a Strategy for Social Security
When you retire, you don’t immediately have to tap into your Social Security benefits. You can, but you don’t have to. Having a strategy for when you think it’s appropriate to do so is something to consider before you retire early.
If you tap into the benefits too early, you can diminish the amount you would receive by up to 30%, which can negatively affect you later.
9. Create a Financial Buffer
Whatever age you’re set to retire at, at least five years before that, you should plan to set aside the amount of money that you need to get through your first five years of retirement. Yes, you should already be putting money aside, but this hefty contribution will only benefit you and create a financial buffer.
It helps safeguard your money and ensure you can live comfortably without worry for at least those first five years.
10. Plan for Retirement Housing
Lastly, it would be best if you considered where you’d live in retirement. Are you going to stay in your home? Move to a new one? Or, maybe you want to move to a new city or country.
No matter what your retirement housing will look like, you need to plan for it. You should pay off your mortgage if you have one, downsize your home, make any costly significant repairs, and complete renovations you’ve wanted to do while you have extra income.
If you plan on moving out of the country, you’ll need to look into visas, safety, living costs, and more. The cost of living can vary significantly in other countries, and you must adjust your retirement budget accordingly. You don’t want to plan your annual spending for one location only to choose a different one that costs more and you don’t have enough.
Final Thoughts
Retiring early can be daunting, but it’s possible with proper planning and dedication. As long as you know your budget, plan accordingly, and stay focused on your goal, you can retire early from your career and live your life however you wish.