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The Ultimate Early Retirement Checklist

The Ultimate Early Retirement Checklist

It’s been 7 years since I escaped from the rat race. I still can’t quite believe it sometimes. Sure, I worked hard and saved a large percentage of my income, but I was very lucky, too. Mrs. RB40 has been a great partner and she played a major role in enabling me to retire early. We live a modest lifestyle and work as a team to achieve our goals. Of course, we made some mistakes, but we overcame them by working together. I wouldn’t have been able to retire early if I didn’t have such a great partner with a similar mindset.

Now, Mrs. RB40 would like to slow down a bit as well. She plans to retire from her HR career by 2020. She likes working, but she’d like to have more time to do her own things. Ideally, she can transition to part-time and work less. It will be a big change for our household, but I’m pretty sure we’ll be able to handle it. I already paved the way to early retirement and we have a year to prepare.

Anyway, I thought I’d put together an Early Retirement Checklist so we can work through it together. Many of our readers aspire to retire early, so this list would be useful for them as well. You can click over to the Google spreadsheet (Ultimate Early Retirement checklist) and print one out for yourself or copy it to your spreadsheet. Lastly, I don’t think you need to hit every item on this checklist. If you get the majority of the list done, you will probably have a great early retirement.

*This post was originally published in 2015. I updated it with the latest info and reposting it. I’m taking this week off from blogging to paint our old condo. We’re putting it up for sale soon and it needs a fresh coat of paint. The cheapest quote I got was $1,800! That’s super expensive. I’ll just DIY and use that money to fix the balcony door at our rental. That door rotted out over the years. Oh, the joy of homeownership…

The Ultimate Early Retirement Checklist

Set a date – Setting a date is actually really important. It gives you a goal to shoot for and most of us work better with a deadline looming. We set Mrs. RB40’s goal to 2020 and this gives us a sense of urgency. It was 2015 when I first wrote this and we had 5 years to prepare. Now, it’s 2019 and we don’t have much time left. Time really flies so don’t let it pass you by.

At Work

  • Negotiate severance pay. If you plan to work a year or two longer, then it’s the perfect time to work on your benefits package. If you need help with this, see Financial Samurai’s book – How to Engineer Your Layoff. Here is my book review.
  • Remove personal data from work – Remove your personal contact data from work directories.
  • Update contact info – Check that your contact info is accurate on the retirement benefit webpage. This is pretty important. I have a small pension benefit and I’d like to collect it someday. Also, get your friends’ latest contact info. Once you’re out, it can be tough to get in touch if you don’t have their phone number and email address.
  • Use up accrued benefits – If you can’t convert vacation and sick days to pay, then use them up. If you have points and other rewards, then use those up too.
  • Work less – If it’s possible, go to part-time. Some employers offer a phased retirement program. Working less is a great way to prepare for early retirement.


Pay off debts – If you have any consumer debt, you need to pay those off before retirement. Luckily, we don’t have debt other than our mortgages. It’d be best to pay the mortgage off too, but we’re not quite ready to do that. For now, I’d rather keep that money invested.

Review your retirement budget – You need to see what your income and expense will look like after retirement. This is relatively easy for us because I’m tracking our monthly cash flow. I can remove Mrs. RB40’s salary and add a bigger health insurance budget. There will be other changes, but those 2 things will have the biggest impact to our cash flow. Over the last few years, I’ve been checking to see if our finance can handle Mrs. RB40’s retirement. It looks good so we’re ready for 2020.

Track your passive Income – Passive income is a great way to fund your retirement. Our passive income has diversified since 2015. Back then, it was mainly from our dividend portfolio. Now, we have real estate crowdfunding income and rental income as well. This part is looking good.

Make some side Income – This is part-time work. If your passive income isn’t quite enough to fund your early retirement, then you might need to work part-time or freelance. Early retirement is a great time to try working in another field. I have side income from blogging and it will help us put off withdrawal. A little active income goes a long way in early retirement.

Rental Income – Investing in rental properties is a great way to retire early. Our rental income isn’t 100% passive because I manage our rentals. Having a property manager is the way to go if you can make the numbers work.

Pension, annuity, social security benefit, and other steady income – You can put all this in the equation if you have any. I won’t be able to access my tiny pension and social security benefit until I’m 62, so I’m not counting them for now.

Budget for big lumpy expenses – Some lump sum expenses don’t show up on your monthly cash flow. If you have a car, then you will need to replace it at some point. Here are some of the items that we need to budget for – vehicles, home repair, and international travel.

Kids – We plan to help out with college as much as we can. The total cost for a 4-year degree will be around $210,000. Right now, we have about $70,000 in RB40jr’s 529, so we have a nice start. If we continue to contribute $400/month to his 529 plan, we should get pretty close to $200,000 in 10 years. We’ll see how it goes.

Build a good size cash cushion – We built a $50,000 cash cushion before I quit my job in 2012. The cash cushion gave us peace of mind and we could use it for unforeseen emergencies. My retirement went well and we found out we didn’t need that big pile of cash savings. I invested some of that cash and we keep about $15,000 in cash at this time. Early retirees should have about 1 year of expense in cash before calling it quits. We’ll build up our cash position to $50,000 before Mrs. RB40 retires from her job.

Are you financially independent? – Have you reached financial independence? Your net worth should be at least 25x your annual expense to consider early retirement. If your post-retirement income covers your expense, then that will work, too.

Life insurance – If you have dependents, then you should get life insurance and add the cost to your budget. I have side income and rental income. Those income streams would disappear when I’m gone. Our kid is 8 years old and life would be a lot more difficult for Mrs. RB40 as a single parent. Some extra income would help with housekeeping, school trips, sports, and other kid activities.

Review your risk tolerance and asset allocation – If you are going to draw down your retirement portfolio, then you will need to review your risk tolerance and asset allocation. The stock market volatility can be harder to swallow if you don’t have the income to smooth things out. You probably don’t want to be 100% invested in stock because you will be forced to sell when the price is down. I’ve become more conservative over the last few years. Now, our target asset allocation is 60/40 (equity/bond.) I can’t stomach 100% stocks anymore.

Figure out your withdrawal strategy – My original withdrawal strategy is to only use the income from our dividend portfolio. I wanted to leave my retirement accounts alone so they could grow. When I retired in 2012, we assumed that Mrs. RB40 will continue to work until 2030 or so. Now that her timeline has changed, we need to adjust our withdrawal strategy. My blog income will be helpful and we shouldn’t have to draw down heavily. We’ll also build our Roth IRA ladder after Mrs. RB40 retires. This will give us a way to access our traditional IRA without having to pay the 10% early withdrawal penalty.

Healthcare – We are all on Mrs. RB40’s health insurance right now and we need to figure out what to do after she retires. This one is tricky. I plan to go with HealthCare.gov. I’ll need to investigate more when the time comes.

Run your number through some retirement calculators – I like Personal Capital’s Retirement Planner and FireCalc. They won’t be 100% accurate, but they’ll give you an idea how you’re doing.

*Sign up for a free account at Personal Capital to help manage your net worth and investment accounts. The Retirement Planner is really good. You can set a retirement date and spending goal, then it’ll crunch the numbers for you. It’s one of the better retirement calculator on the internet.

Take a test drive – We saved all of my paychecks for a year before I quit my job. We will do the same for Mrs. RB40. It will show us that we can function without her salary. This will give us a chance to practice living within our new retirement budget.


Get a complete health checkup – Go have a total health checkup before you lose your coverage. Recently, we went to our dentist and fixed all the cavities. I told him to fix everything on the watch list this year. Next year, our dental insurance probably won’t be as good. If you have been putting off the colonoscopy, now is the time to do it…

Relocate – Should we relocate? Portland is an expensive city and we could live much cheaper elsewhere. Even moving 15 miles south would be a lot more affordable. For now, we decided we’ll stay in town so our kid can stay in the same school. We just moved into our duplex. We live in one unit and rent the other unit to a stable tenant. This should reduce our housing cost quite a bit. We love our old condo, but the property tax and HOA kept rising. It was time for a change.

Build a social life outside of work – One of the things retirees miss most about work is social interaction. Most of your friends will be busy working and they won’t have much time for you. Mrs. RB40 and I are introverts, so this one is especially difficult for us. I’ve made some friends through our son’s school. Maybe Mrs. RB40 can do the same. Otherwise, she’ll have to join some kind of hobby groups. Portland has board game clubs, ukulele players, hiking, and all sort of interesting groups.

Spouse’s retirement – If you are retiring, but your spouse isn’t, then you need to talk about it. I thought Mrs. RB40 likes working so we didn’t talk about it enough when I retired. In 2012, she still planned to work at least 10 more years, but it didn’t turn out like she planned. (Wow, 10 years is closing in very quickly!) She still likes working, but she wants more time to herself too. She is interested in having Portland as her ‘home base’ but having the opportunity to fill short-term needs elsewhere, or to do more temporary HR work for a variety of companies instead of just staying at one place permanently.  While she is an expert in her sub-field, she is starting to feel stagnant and a little pigeon-holed.

Travel – Do you plan to travel after retirement? I want to take a year off to travel around the world, but we’ll wait until RB40Jr. is at least 10 years old. I also want to take a few years to explore SE Asia. Mrs. RB40 wants to travel, too, but not as extensively. She likes having a home base to come back to. Once our son is off to college, we’ll probably travel for 6 months and then come back to the US for 6 months. That will give us a chance to slow down, travel hack, and reduce our expense.

Make a bucket list – Here is a fun activity while you’re still stuck in a cubicle. Make a bucket list and put all the things you want to do on it. This list will give you something to look forward to and it will keep you occupied for many years to come.

Have a backup plan – Work on your plan B and plan C. If your finance heads downhill, what would you do? You can go back to work, cut your expenses, relocate to a cheaper town, or get a roommate. There are a lot of options, but you need to work it out with your partner. For us, plan B would be Mrs. RB40 going back to work part-time. If that doesn’t work, then we’ll probably move back to her hometown. She has more support there and it’s an inexpensive part of Southern California.

Discuss the plan with your partner – Don’t spring early retirement on your spouse. You need to approach the subject slowly and present him/her with this checklist. If you put in some preparation, your partner might be more receptive to the idea. Of course, every family is different, so you may have to spend more time to convince your partner.

What to do after retirement? – This is probably the biggest problem for early retirees. I had an easy transition from working to retirement because I was busy with my son and this blog. Apparently, lots of people have a tough time because they didn’t have a plan for after retirement. It’ll be great to relax all day for a while, but then it will get boring. You need to figure out what to do with all the time you used to spend at work. Successful retirees usually find themselves busier than ever. Some relaxing time is good, but being bored all day is not. Mrs. RB40 will have to figure this one out.

*Starting a blog is a great way to save money on your therapy bill, build your brand, and generate some extra income. Check out my tutorial if you want to share – How to Start A Blog and Why You Should 

Exercise – You have to keep healthy so you can enjoy 30+ years of retirement. Wealth doesn’t mean much if you’re not healthy enough to enjoy it. That’s why I exercise regularly. What works best for most people is to find a physical activity that they enjoy. Playing basketball, hiking, gardening, and walking the dog are just a few things that can help you become more active.

Make a will/estate plan – Okay, some readers pointed out that you might not need life insurance. You definitely need a will, though. If you have a child, you need to appoint a legal guardian you can trust. My brother will be our kid’s legal guardian if something happens to us. I trust him to administer our estate and be a good parent to RB40jr.

Plan for early retirement

Anyone can walk into their boss’s office and quit today. However, if you’re not prepared, you might have to go back to work in a few years. (That’s my worst nightmare…) It’s not all about finance either. Many people feel lost after retiring. You need to have a plan to smooth out the transition. I think staying busy is a great way to avoid the retirement malaise. Life is better when you’re being active.

Okay, you don’t have to check off every line item on this list, but I recommend getting most of them done. This will give you a great shot at retiring early and staying retired.

Did I miss anything? What do you think I should add to this checklist? Help me make this the ultimate early retirement checklist. 

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