If a person decides to retire early, he will forego not only the hardships associated with working, but also the additional money he could have made his retirement more comfortable. The following questions will help you decide whether you can retire early or not.

Are you debt-free? If you have settled your mortgage, and you have no existing loans, credit card balances, or other types of debts, needless to say your savings and retirement income are safe. You have nothing to worry about making huge payments during retirement. You may use your retirement funds to enjoy life or for emergency purposes.

Is my retirement savings higher than my investments? If you have met your goal for retirement savings, and your investments meet or exceed the amount you are aiming to save, then it is a good sign to retire early. But make sure your retirement savings must be sufficient to cover your additional retirement years.

Can I live on my current retirement budget? Fixed-incomes such as pensions and/or retirement plan pays lower monthly incomes than when the retirees were working. If you can stick to your retirement budget for at least six months, then you are a step closer to early retirement. Try living on a limited or reduced retirement budget to get the immediate feel of living within the fixed income.

Do I have a concrete plan or project should I decide to retire early? you are going to do nothing when you retire early, this will lead to unhappy retirement years and increased spending. To kick off early retirement, you may plan your vacation, part-time job, or a hobby. Instead of attending sales meetings or just spending your time on nothing, you can go to a golf club with your friends, learn ballroom dancing, hit the gym, or do volunteer works. In essence, just plan your retirement wisely and do something worth your time. You can retire early if you can easily think of realistic, non-work related activities to enjoy early retirement.

Is my healthcare plan enough to cover me? Healthcare can be expensive, so early retirees should obtain a plan that can cover his health expenses during his golden years and before he can be qualified for a health plan at age 65. Early retirement is feasible if you can continue your coverage through your previous employer, or your spouse’s plan covers you. Another option is to purchase private health insurance.

If I retire early, can I withdraw from my retirement plans without incurring penalty? Of course, no one likes to pay unnecessary penalties. In the United States for instance, if your retirement savings has a 457 plan, it does not have an early withdrawal penalty but you will still pay taxes on your withdrawals. For early retirees with 401(k) plans, they can withdraw from their accounts without paying penalty if they continue to work for their employer until the age of 55, as long as they do not roll it into a IRA. Early retiree wannabes are also qualified for penalty-free withdrawals from their 401(k)s if their 59th birthday was at least six months ago. Setting up a series of substantially equal withdrawals over at least five years is another option for penalty-free retirement plan. But like a 457 plan, it also has taxes on the withdrawals. If you have of these options, then you can retire early.

If you have answered yes to all of the above-mentioned questions, definitely you can retire early and enjoy the reap of your working years without worrying too much.