The idea of retiring early is a dream many people hold. While you might love your job, you also want to see the world and spend quality time with your family while you still feel good and vital. You can retire early and how early, depends on how well you plan. Early retirement planning for retirement that starts before your reach 62, when you can start a lower Social Security payment, requires even more planning and more money.

Decide first how you want to live in retirement. Early retirement planning is different for each person. If you simply want the pleasures of home and time to garden or just relax, you won’t need as much as if you want to travel the world and spend time in luxury accommodations. Remember, retirement is often more expensive than living as you are today because of ever increasing prices and taxes. If you have health insurance through an employer, you’ll also have to purchase your own and by retirement age it’s very salty. Calculate the amount in today’s dollars. Since the average inflation rate is three percent, use the rule of 72 to find how inflation affects your living standards. Divide three into 72 and the answer is 24. That’s the number of years it takes for prices to double. Divide 24 into the number of years until retirement and multiply that times the amount you need each year.

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