Early Retirement Readiness Checklist

Six Signs That You Are Ready to Retire Early had a list to evaluate whether one should consider early retirement.  I did the evaluation based on my situation in 2007, when I took early retirement.

You are emotionally ready to quit working. Yes, I was ready to stop working at my job.  However, I did test several jobs while I retired to determine if starting a second career would be of interest.  After five years of testing, the answered turned out to be "no."

You followed a retirement budget for 6 months. Yes, we lived below our means while working.  So our expense after retiring were the same as the expenses before retiring.

You have reliable health insurance coverage.  Yes, my company provided me the same insurance coverage, although at a higher price.  

Your children are financially independent.  No, our three year old hadn't quite achieved financial independence.

Your debts are paid off or nearly paid off.  Yes, our only debt was our home mortgage.  My spouse was right that we should have sold our stock investments and paid off the mortgage in 2008.  However, I was greedy and stayed invested until after the market crashed.   We did sell our stocks to pay off the mortgage in May 2009.

Your portfolio is big enough to withstand losses.  Yes, in hindsight.  Our portfolio declined over 40% from October 2007 to March 2009.   There were times I thought our early retirement might fail.  I even took on some part time jobs to reduce our withdrawal rate.   However, thanks to the Fed QE programs, our portfolio has recovered, at least for now.

Five out of six is pretty good.  I guess we should have started having our daughter work when she was two, in order to get six out of six :-)

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This is not financial or retirement advice. Please consult a professional advisor.

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