So, when we say ‘early retirement’ when exactly do we mean?
 
A few years ago, it would have probably been defined as retiring before the state retirement age – which for a lot of us, is around age 67 and upwards now.
 
For most people (footballers and athletes aside) retiring either at or before age 60 would be considered very early. Theoretically in the Isle of Man, we can access pension benefits from age 50 (55 in the UK), but how realistic is being able to do this for most of us?
 
A recent poll for ‘Which’ shed a little light on this.
 

The main measures enabling people to retire early or think about it	Percentage of people
Having a defined benefit pension	32%
Paying off mortgage	30%
Saving little and often	29%
Saving extra with a pay rise or bonus	19%
Receiving a redundancy pay-out	16%
Receiving an inheritance	14%

                                                                                    (Source: Which? The UK)
 
In our buzz poll, 40% of respondents stated that they wanted to retire between 55 and 65 years of age (which you may expect) but probably most concerning, 12% responded that they may never have enough money to fund retirement.
 
So, clearing debts, maximising savings, and securing income streams seems like the most obvious solution here – but how do we do it and how much do we need to retire early?
 
Well, you could do it yourself on a very large spreadsheet – but would you know where to start?
 
Professional Planners
 
Most professional retirement planners will use software programs that detail and map out your entire life in a matrix up to and including mortality. Shortfalls in your planning are identified as are the amounts needed to eradicate them.
 
The lifetime matrix will also include provisions for things that you may have not considered, like funding long term care, stock market losses on your investments and even early mortality of an income earner. These factors will be ‘stress tested’ to ensure that your plan is flexible – something that just isn’t possible at home on a spreadsheet.
 
A professional planner will be able to tell you whether early retirement is possible (and how to get there), but will also tell you whether you’re being unrealistic in your plans. This gives you the opportunity to amend your plan to achieve your retirement goal.
 
 
Conclusion
 
The word that you see time and again here is ‘plan’ – because that is really what is needed, not just for early retirement but for retirement planning in general. Without identifying now what your expected expenses and life objectives are going to be in the future, how can you plan for the right level of income?
Our advice would be to speak to a professional retirement planner and take advantage of what is a powerful tool in the retirement box.