Friday, December 26, 2001

Give yourself an early retirement

At this time of year, you and your family may be reaping the benefits of giving and receiving holiday gifts for family members and friends.

But have you thought about giving yourself what some consider the best gift of all the gift of early retirement? According to the Georgia Society of CPAs, retiring early takes meticulous planning and more than a tidy sum of money, but for the truly committed, early retirement is possible. Here is what you need to do if you desire an early escape from the work world.

One of the biggest challenges retirees face is determining how much they need to save by the time they hope to retire. The further away you are from retirement, the more difficult the task. CPAs and other experts say you need somewhere between 70 percent and 80 percent of your pre-retirement income to maintain your standard of living.

Perhaps the best way to prepare for an early retirement is by taking full advantage of 401(k) plans or other employer-sponsored, tax-deferred retirement plans. These plans make it possible for you to invest pre-tax money for retirement directly from your paycheck and, as an added bonus, many companies will match part, or even all, of your contributions.

If you're self-employed, you can create your own retirement plan by opening a Keogh account.

Retiring early is an aggressive act that requires not only intense saving, but a serious willingness to live below your means during the wealth accumulation phase of your life.

The GSCPA is the premier professional organization for CPAs in the state of Georgia. For information, visit www.gscpa.org.

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