Retiring early gives you more time to enjoy life while you’re younger and healthier, but it also has some complications: You’ll pay a penalty if you withdraw money from most retirement savings plans before age 59-½. You’ll need to find health insurance to cover you until you’re eligible for Medicare at 65. Your retirement savings may need to last through a period almost as long as your working years, and figuring out whether you have enough can be difficult.
“The key is proper planning,” says Jaime Eckels, partner with Plante Moran Financial Advisors in Auburn Hills, Mich. “Sometimes that means sacrificing — saving more than you normally would and spending less.” But it can also mean that following some conventional strategies for saving for retirement, such as stashing away the maximum in a 401(k), may not be in your best interest. Instead, it may be helpful to direct some money toward a taxable account that’s accessible without penalty at any age, even if it doesn’t have the benefit of tax deferral.
