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Naturally, everyone has a different number in mind when it comes to what theyll need to retire early.
Reaching this goal requires more than guesswork.
Know Your Magic Number
You cant save to meet your magic number if you dont know what it is.
So, how do you apply the 4% rule?
You calculate your annual expenses and multiply that number by 25.
Thats your target thats the amount you better have saved, DeLeo says.
The 4% rule is a widely accepted method of calculating your magic number for retirement.
This assessment will give you a ballpark of what you should plan on setting aside for healthcare.
DeLeo also wants you to assess your other financial obligations.
Will your mortgage be paid off by the time you plan to retire?
Do you have any lingering student loans or upcoming college tuition for your kids?
Combing through these costs now will help you plan for a smoother transition into early retirement.
Consult a Tax Professional
Unfortunately, taxes dont disappear when you retire.
DeLeo recommends consulting with a tax professional who specializes in retirement planning.
She noted that there are professionals who will offer a one-time assessment of your portfolio to help you plan.
If youre serious about living that retired life early, expert guidance can make all the difference.
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