Planning early retirement? Here’s what to consider

Early retirement is a dream for many, especially those in high-pressure jobs. But deciding when to stop working isn’t just a financial question—it’s a lifestyle one too.

A friend recently shared that he wanted to retire at 60. He had invested well and built a solid portfolio, but as we talked, it became clear that his decision wasn’t only about numbers. There were bigger questions: Will he continue working in some capacity? Where will he live? How flexible can he be with spending?

Will you continue to work?

Working longer wasn’t his first choice, but part-time work can make early retirement easier. Even if the pay is lower, earning something delays dipping into your investments. This means your portfolio lasts longer, and you can spend without fear of running out of money later.

Why your retirement plan needs more than just numbers

For salaried professionals, another factor is healthcare. Many people underestimate medical costs after retirement, especially before insurance coverage kicks in. While India doesn’t have Social Security like the US, continuing to work—even in a consultancy or advisory role—can help cover expenses and maintain employer-sponsored health benefits.

This decision also ties into identity. Many professionals find their work is closely linked to their sense of purpose. For some, reducing hours rather than quitting completely can provide the right balance.

Where will you live?

Your choice of location significantly impacts your retirement costs. For example, retiring in a metro like Mumbai or Bengaluru means higher living expenses compared to Tier 2 or Tier 3 cities. Some retirees consider moving to smaller towns or back to their hometowns to stretch their savings.

However, location changes also affect social connections and access to quality healthcare. If your industry ties and friendships are in the city, staying put—even in a smaller home—might be worth it.

Can you be flexible with spending?

One of the most overlooked aspects of retirement planning is how adaptable you are with expenses. If you can cut back during market downturns or emergencies, your savings will last longer.

In our research, retirees who adopt flexible spending strategies—spending more when markets are good and scaling back when they’re not—end up enjoying higher lifetime spending than those sticking to rigid withdrawal rules.

In India, this flexibility can also mean adjusting discretionary expenses such as vacations, dining out or large purchases. For many, international holidays or luxury spends can be traded for simpler options, especially in the first few years of retirement.

What about leaving a legacy?

Do you want to maximise your lifetime spending or leave money for your family? This can influence your financial strategy. Some retirees focus on generating enough income for themselves, while others plan to leave property or investments as inheritance.

If you don’t have dependents, you may prioritise using your wealth during your lifetime—on experiences, hobbies or philanthropy. This could mean choosing spending strategies that allow you to front-load your expenses while maintaining security for later years.

The bottom line

Retirement planning in India isn’t just about building a corpus. It’s about asking tough questions: How much will you work? Where will you live? How will you handle rising healthcare costs? And how much flexibility do you have with spending?

The earlier you start answering these questions, the better prepared you’ll be—not just financially, but for the lifestyle you want in your later years.

For more updates, join/follow our WhatsApp, Telegram and YouTube channels.