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Which Early Retirement Age Is Right for You?

Dan Caplinger
December 11, 2012

Unless you've never had a bad day at work in your life, you've probably at some point dreamed about what it would be like to retire early. But if you intend to turn that dream into a reality, you have to pick an early retirement age that will work for your specific financial situation, both in the immediate future as well as potentially for decades down the road.

To choose the right early retirement age, there are a number of factors you need to consider. They include the following:

1. Have you saved enough money to last a lifetime?
In one sense, all of your retirement planning boils down to this one simple question. If you have enough money to take care of every possible contingency, then there's no reason to wait to retire unless you like what you do or you have other reasons to accumulate more wealth than you personally need.

Bear in mind, though, that the earlier you retire, the longer you'll have to fend for yourself financially without a paycheck to support you. Conversely, every year you wait actually benefits you in two ways: It lets you save more, and it shortens the period of time you'll need to draw from your life savings.

2. Do you have the midlife gap covered?
This question follows from the first, but it highlights a particular problem that early retirees face: bridging the gap between when you call it quits and when programs like Social Security and Medicare become available to you. For instance, if you quit at age 55, then