Five Steps to an Early Retirement

Early retirement may not be the easiest goal to achieve, but it is possible. These steps can help lead you in the right direction.

Step 1: Schedule a financial check-up.

Find a financial adviser you're comfortable working with (ask friends for referrals or contact your credit union) and set up an appointment. Gather your paperwork, including account statements, tax returns, and a list of retirement goals.

Step 2: Make your dollars work harder.

Make a list of your assets--everything from savings bonds to your 401(k) plan--and calculate how much of your total portfolio is invested in cash, stocks, and bonds. Adjust your allocation to maintain the right proportion of each for your age, risk tolerance, and goals. A financial professional can advise you on the most tax-efficient way to reallocate.

Step 3: Make the most of your employee benefits.

Find out exactly what retirement benefits your employer offers and figure out where they fit into your early retirement plan. If the company offers a tax-deferred savings plan, sign up. Contribute at least enough to get the maximum matching dollars.

Step 4: Own your home.

If you haven't bought a home yet, start saving up for the down payment and contact the credit union or the HUD Housing Counseling Clearinghouse 800-569-4287 to learn how to make homeownership a reality. If you do own a home, be careful about tapping into the equity before retirement.

Step 5: Plan for semiretirement.

Start preparing for a retirement ìcareer.î It can be an extension of what you've done during your working life, like substitute teaching or consulting, or it can be something entirely different. Find out what will be required for your new vocation and start developing your skills.

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