When a person is working and they are trying to figure out how much money is necessary for retirement, they need to determine how much money they are looking to have when they retire. This takes a lot of calculation and planning, and if done properly, the senior can retire comfortably at an earlier age than required, and still enjoy themselves. There are a few ways to determine how much saved money is needed for an early retirement.
1. A person that is planning on taking early retirement should have enough money for their bills, and a little extra spending money. Everybody has different goals, but the bare minimum should be that they can pay their current bills and if they want to do something extra, they have some money to be able to afford it. When someone is retired, they have a lot more time on their hands, and there are going to be desires to do those things. That is why it is important to have a little extra cash on hand in case the urge comes. This would be easy to figure out how much is needed as a person would only need to make sure they have enough saved to last them to social security begins. They would have to figure out all their bills and then add ten percent for extra money, and this equation would suffice the situation for most people.
2. Early retirement should be based on the other person in the household. For example, if the husband wants to retire early, and the wife is going to continue working, and he is going to live off her income, this is obviously not right. If the husband is going to try to retire early off of his own savings, he needs to make sure that he is not using the money that she is working for. He needs to make sure that he has enough savings stored up so that he never has to borrow from her. Furthermore, he should be able to meet her needs during this time of retirement. Many people get the idea that they are the only one affected by their decision. However, the other person is just as much affected, especially if they are having to work to support their spouse who retired early. There always needs to be ethics involved in every decision, especially if someone else is involved.
Saving enough for early retirement should be calculated in such a way that all the bills can be paid, plus a little extra, and nobody else should be working to support the person that is retiring early.