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Want to retire early? Answer these questions first

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Usually when one of our 20- or 30-year-old listeners sends us a question for the show, they wonder if they can afford a home or what they should do to pay off their student loans. 

A guide to U.S. retirement accounts Learn more about what kind of plans are out there and which is best for you. Plus, browse our other resources to help you reach your retirement goals.

But not 30-year-old Amanda in Chicago. She has no debt, holds six-figures in retirement savings, an emergency fund of $35,000 and was recently let go from her company. And she’s wondering if she can skip the whole day-to-day job thing and get straight to retirement.

“I’m calling in today cause I’m hoping you’ll tell me I’m ready to buy a boat and sail off into the sunset,” says Amanda. “When is enough, enough? I was diligent and put away money well.”

Amanda actually has more savings than 75 percent of the country. But is it enough to retire?

Though some sites say that retirement lies in a magic number, like saving $1 million or 10 times your annual salary, it’s more important to figure out what you’re saving for, since every retirement situation looks different.

Questions to answer

  • Where will you live? Do you still owe money on your home or pay rent monthly? Would you be able to afford that even if your income stopped? 
  • Do you plan on still working? Even if you do leave the 9-to-5 behind, could you work a part-time schedule or find freelance work if necessary?
  • Will you have to take care of family? If your parents aren’t adequately prepared for retirement, will you have to support them?
  • Where will you live? Other cities, and countries, offer significantly lower costs-of-living. Would you be willing to leave?
  • How much debt do you have left? Will you be able to juggle payments even without income?
  • Wha will you do? Some people aren’t content with sitting at home. Will you travel or volunteer abroad? How much will that cost?

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