A recent article by Investopedia explained several topics that those looking to retire during 2011 should be aware of.
Inflation, tax liabilities, uninsured medical expenses, home repairs and other various factors are things many people overlook when thinking about the finances necessary to retire. Paying close attention to these areas is key, according to the source, when estimating how much savings is needed to retire.
Prospective retirees need to determine whether they are eligible for Social Security first. A recent WalletPop article stated that those receiving Social Security payments before their eligible age can lose up to 75 percent of their benefits.
Next, retirees should be aware that at age 70.5, they need to begin withdrawing money from their IRA or 401(K) programs. Since these withdrawings are taxable, potential retirees need to adjust their budgets accordingly, the article explains.
Establishing a monthly expense plan and sticking to it is also essential in order to make savings last. Investopedia also recommends buying as much long-term care insurance as possible in order to cover future, unexpected expenses.
Updating a will, protecting investments, refinancing mortgages and having fall-back employment options are also highly recommended in order to retire early.