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Society’s standard on retirement is at the age of 65 when you can start Medicare. There are many in the media and entertainment industry that will tell that you need to have a minimum of $1 million dollars saved.

Those two thoughts would work for almost anyone of course, 65 and $1 million dollars. But I’m in my early 50’s so I would be looking at 10-15 more years of working behind a desk.

That works for some, but it didn’t for me.

When you are planning for your retirement it needs to be specific to you. Your wants and your situation. Your retirement shouldn’t be based on what society expects, somebody else’s number or some arbitrary age in the future. Your retirement should be based on terms specific to you.

Retirement is one of the biggest financial decisions you’ll make in your life. It takes planning and knowing your numbers to be able to pull off a successful retirement and it shouldn’t be left to a “hope and a prayer.” Proper retirement planning can lead to you retiring sooner, provide you confidence that you can pull it off, and lessen the money worry when you decide to pull the plug on your career or “main gig”.

How do you really know when you can retire?

I’ve devised an easy to understand way to determine when you can retire. It’s not based on any specific age so if you hit your numbers at 48, 55 or 60, you can retire. It works for any age.

I call it DIAL into RetirementDIAL is an acronym for Debt, Income, Assets and Lifestyle. Get these four items in order and you can retire at any age.

Here’s a high-level look at how it works:

Debt:  Ideally, you want to be debt-free when you retire. A small amount of debt isn’t tragic if you have the income to cover it. It’s best heading into retirement with no debt.

Income:  You’ll want multiple streams of income. Social Security and a possible pension will give you a guaranteed lifetime income stream.  Rental Income, owner-financing your business, income from your brokerage and retirement accounts, a part-time job, etc.  Relying on just one income stream is a bit risky but when you have multiple streams coming in, you’ll be protected if one disappears down the line.

Assets:  Your assets will do three things for you. 1) Give you a way to generate more income.  2) Give you an emergency fund for those unexpected bills like a hot water heater that just died. 3) Give you money for future expenses like replacing a car.

Lifesyle:  How much are you spending on a monthly basis? Ideally, your lifestyle is based on frugality because if you retire at age 60, then you’re asking your money to last for possibly another 30+ years. If your lifestyle is more extravagant, then you’ll need extravagant income and assets so your money will last.

“I’m just going to work until I’m 65 and hope I have enough” is the method so many people use. This is dangerous. Why chance it? Seek out some financial help so you can be confident in your decision. “Hope” is not the answer and will leave you worrying whether or not if you have enough money which doesn’t seem like an enjoyable retirement at all.

When you get these 4 areas in sync then you’ll have the confidence to pull off a successful retirement at any age. Don’t just hit the default button and do “what everybody else is doing”. Spend some time getting to know your numbers. Hire a financial advisor to give you confidence that you’re making the right decision. Lastly, do it on your terms, when you’re ready.

Live free my friends,
Eric Gaddy

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Investment Advisory Services offered through Shankland Financial Advisors, LLC, Registered Investment Advisor