Can I Afford to Retire Early? What to Know Before You Leap

Jim Scanlon

Aug 01 2025 13:00

Understanding the Dream of Early Retirement

Retiring early is a dream for many, yet it is fraught with significant financial implications. At Scanlon Wealth Management, we offer guidance that eliminates the guesswork, ensuring your journey into early retirement is as secure and satisfying as it is rewarding. But before making this leap, there are essential aspects you must consider to determine whether early retirement is feasible for you.

What Does Early Retirement Entail?

Early retirement typically means leaving the workforce before the traditional retirement age, often defined as 65. To achieve this, one must have sufficient savings to cover living expenses for potentially decades without earned income. The success of early retirement greatly depends on meticulous planning and the application of a disciplined financial strategy.

The Significance of Planning for Early Retirement

The concept of early retirement can seem appealing, but it can have substantial financial, legal, and personal consequences. Failing to plan effectively might lead to inadequate income streams, forcing a return to work or significantly reducing your quality of life.

Essential Steps to Assessing Your Capability

• Calculate your retirement needs: Estimate your annual expenses and adjust them for inflation over the period you plan to be retired.
• Evaluate your current savings: Assess your accumulated assets, including retirement accounts, savings, and investments.
• Explore passive income streams: Consider investments that generate passive income, such as rental properties or dividend-yielding stocks.
• Health insurance considerations: Investigate health insurance options, as you might not yet be eligible for Medicare. This could become a significant expense.
• Test your plan: Consider a trial period living on your proposed retirement budget to uncover any shortfalls.

Real-Life Scenarios and Lessons

Take, for example, a scenario where a retiree underestimated healthcare costs, leading to unexpected debts. Or consider a retired couple who misjudged the impact of inflation on their expenses over 20 years. Such examples underscore the crucial importance of comprehensive planning and adaptability in your retirement strategy.

Common Pitfalls to Avoid

Clients often face challenges such as underestimating expenses, over-relying on social security, or failing to diversify their investments. These issues can quickly derail plans for early retirement if not addressed promptly.

How We Can Help You

At Scanlon Wealth Management, we provide tailored advice to help you navigate these complexities. As an independent fiduciary advisor, Jim Scanlon offers conflict-free guidance, emphasizing transparency and individualized solutions that align with your personal goals.

Ready to Plan Your Retirement?

If you're contemplating early retirement, don’t leave it to chance. Contact us today to schedule a no-obligation consultation at our office in Pittsburgh, PA. Whether you're based in Fox Chapel, Mt. Lebanon, or anywhere around Western Pennsylvania, we’re here to help you achieve your dream of a financially secure early retirement. Start your journey with Scanlon Wealth Management and step confidently into the next phase of your life.