If retirement is for doing the things you want to do, why do most of us wait so long to retire? By the time we’re 65 years old, we may not have the health or stamina to do the activities we planned to do. Why not get started on the fun sooner?

You can—and if you do, you won’t be the only one who gets a head start on the retirement adventure. Lots of people set a goal to retire early so they have more time and energy to enjoy this stage of life. It takes some forethought, saving and sacrifice, as well as some creativity, but early retirement is achievable.

If planning for a normal retirement age like 65 requires long-term thinking, then early retirement takes long-term planning to another level. The more time you have to cover all your bases, the better your odds of achieving your goal. After all, with fewer years to save for your retirement, the more money you’ll need to put away each year. But the financial part of the plan is not the only consideration.

Here are a few key things you can do now to set yourself up for an early retirement:

1. Look at your career plan, and take the long view. No matter if you’re at the beginning, middle or end of your career, it’s worth an honest assessment. Ask yourself what you want to do in 5, 10 or 25 years. What skills do you have, or need, to make your next move? Career planning is much deeper than simply maximizing your earning capacity. It involves acknowledging your strengths, building key skill sets, knowing what you like to do and proactively targeting jobs, industries or companies in which you see yourself being fulfilled. As Marsha Sinetar’s book title succinctly explains, Do What You Love, The Money Will Follow.
2. Take a focused look at your finances. First, as part of the career plan (above), find out what level of income your chosen career is likely to provide. Use that estimate to plan your income—both current and future. Consider how long you plan to work, what you want your retirement to look like, your tolerance for risk and your ability to save. Get familiar with all of your possible retirement income sources like IRAs,
   401(k)s, stocks, bonds, pensions, Social Security and personal savings. But don’t forget other possible sources: rent from owned properties, inheritances and estates.
   

   On the expense side, look ahead to your cost of living in retirement. Will you have a mortgage? What about the cost of health care? Many people neglect to plan for health care out-of-pocket costs of premiums and expenses, which according to the Employee Benefit Research Institute can range from $295,000 to $550,000 depending on life expectancy.

   Also, consider the possibility of part-time work in your retirement. Many retired people work a few hours a week to stay active, keep skills sharp and provide supplemental income.

3. Save, and sacrifice. Retirement requires savings. Early retirement requires even more savings. After all, early retirees have fewer years in which to work and fund the nest egg. Take advantage of your employer’s 401(k) plan, or set up an Individual Retirement Account (IRA)—both of which make saving for retirement easy and provide tax benefits. Also, look at your current lifestyle, and you may be surprised at how small sacrifices can reduce your spending—and make saving easier. Bring a lunch to work every day and save $1,000 a year or more. Cut out the fancy coffee drinks and save hundreds. Identify a few small sacrifices in your budget and apply those savings to long-term retirement savings. Every little bit helps, and your compounding interest or growth over time will surprise you.
4. Think outside the box. Your retirement can be anything you want it to be, if you get creative, carve out a plan and stick to it. Do you want to live in one place or will you spend winters in the sun? What will you do for fun? Do you want to fully retire or scale back to a part-time schedule? Many people work during their retirement, but at a pace of their choosing. Does your line of work allow you to do one project at a time? Is telecommuting an option, allowing you to put in some hours from a location convenient for you? Do you have a hobby that you can turn into an income source? Find out what others have done and learn from their experience.

Resources:

• American Association of Retired Persons (www.AARP.org)
• Invent Your Retirement: Resources for the Good Life by Art Koff, copyright 2006. Published by Oakhill Press, Winchester, VA.
• U.S. Government. The government website features resources on retirement including term definitions, calculators and links to related government agencies.
  (http://www.usa.gov/Topics/Seniors/Retirement.shtml)
• Do What You Love, The Money Will Follow by Marsha Sinetar, copyright 1987. Published by Dell Publishing, a division of Random House, Inc., New York, NY.
• Employee Benefit Research Institute. EBRI is a non-profit organization that conducts research and education to encourage the development of sound employee benefit programs. (www.ebri.org)