Retiring early isn’t all it’s cracked up to be. Sure, you get to spend your days doing more of what you enjoy rather than watching the clock at your 9-to-5 job. But you’re also exposing yourself to a lot more financial risk because your savings will have to last you even longer. That’s not to say retiring early isn’t doable, but there are special challenges you’ll face if you decide to do so. Here’s a look at a few of them and how you can prepare yourself.
Even if you excel at saving and are ready to retire before your 60s, you might find accessing your nest egg difficult at first. That’s because the federal government imposes a 10% early withdrawal penalty on most retirement account withdrawals you make before 59 1/2. You probably don’t want to give away thousands of dollars unnecessarily, so you need a plan to get around this.