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mallei's avatar

There's a good chance that my workplace may offer "early outs" to employees within five years of retirement. Anyone have advice about retiring at 55?

Asked by mallei (282points) April 28th, 2012

My major expenses will be health insurance plus real estate insurance and taxes. Money will have to be tightly budgeted, but having time while still young has great appeal, too.
Would early retirement be more of an opportunity or a limitation?

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12 Answers

lillycoyote's avatar

I think this is a question you can only answer for yourself, upon consulting with a professional financial adviser. I really think that is what you should do. It depends on what the “buyout” is that your company is offering and what your current financial situation is and what your future financial situation might be. I wouldn’t ask here about something like this. You need to consult with a professional financial adviser. That’s what I think, at least.

rooeytoo's avatar

You didn’t mention what your occupation is. Unless you have substantial savings there is always the worry that you will outlive your money. I am 67, my husband is 72, we both still work. Traveling is expensive and for us gets boring after a while. If you stay at home there are only so many DIY projects to do. I love to read but I don’t like it 24 hours a day. Without a job I am bored and restless. Retiring at 55 just sounds terrible to me. But many people think it sounds like heaven.

At 55 you are reaching the age where no one wants to hire you. So you may have trouble finding another job if that is a part of your game plan. That is not true of trades people so much because you can always be self employed.

I don’t enjoy tight budgeting so it wouldn’t suit me. But to each their own! How do you see yourself spending your days?

Bellatrix's avatar

What sort of advice are you looking for? It seems to me you know you need to get some financial advice. Are you looking for advice about how to manage the transition to retirement at such an early age? Or do you want advice about finances?

JLeslie's avatar

I assume you are single?

If you can do it financially, I say go for it. But, that is me talking about what I would do, it doesn’t mean it would suit you. Only you can really decide if you will be happy and financially secure. For me to do it I would need to know that I have enough money to live monthly without going into my savings. If it looked to be money would be very tight, I would worry with any inflation I would be in trouble. If I felt very confident a part time job would solve the problem that might be a good option, assuming it won’t be too hard at 55 to get one. I think that depends a lot on where you live. Using savings for infrequent, unexpected or extravagant, expenses would be ok. If you can work another year or two and then take an early out, and save like crazy so you have a better cushion, instead of needing to work part time I might go that route, rather than worrying about needing a part time job.

Mentally and emotionally just think about if you already have activities that would fill your day? Could be exercise and a hobby you like. Travel now and then. If you have grandkids visiting with them. Friends who are also retired. You could move to an active adult community and enjoy the lifestyle. That of course depends where you live, some 55+ communities are awesome, and some don’t have much to offer..

flutherother's avatar

I retired early and was able to get another job so it worked out very well for me. I don’t feel ready to retire though I could manage financially. I would start looking for other jobs based on the skills and attributes you have.

jca's avatar

Will the company offer you healthcare or some kind of discount for healthcare if you continue with their plan?

marinelife's avatar

Just make sure you have enough money. You could leave your job with the early package, and then work somewhere else.

bewailknot's avatar

My parents both retired in their mid-50s. They wanted to travel and they did – very frugally. They seemed to make friends everywhere they went.

filmfann's avatar

Go to a financial analyst. If you touch the buyout money in any way, you will be taxed on it. If they get it, they immediately move it so that you don’t get taxed. You could lose half of your nest egg by carelessness here.

john65pennington's avatar

I made the right choice. I waited until I was 65, as planned, before retiring. I planned ahead so that everything would be paid for, except insurance, utilities and food. Everything has worked according to my plans. I was a very young 65, when I retired. I am glad I waited, since Social Security was much more at that age.

Every person’s retirement is different. What was right for me, may not be correct for you.

I will say this, the first two years, I did everything I wanted to do with my free time. I am now fairly bored, so I have taken up the hobby of playing bingo. I have made many friends at this hobby and I actually see some of the people I have arrested in the past. Your situation may vary greatly, so plan ahead….....WAY AHEAD.

beachbum76's avatar

I agree with @filmfann. There are a lot of variables that a financial adviser can think of that you may not have. This is too important a decision to make on your own without knowing all the if, ands or buts.

mallei's avatar

I just want to thank everyone who responded. Your feedback encourages more “real world” contemplation of early retirement and what comes next.
Wouldn’t it be great if folks nearing retirement age could transition into a part-time position at their work?

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