≡ Menu

The Ultimate Early Retirement Checklist


The Ultimate Early Retirement ChecklistIt’s been 3 years since I escaped from the rat race and 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 gear down a bit, too and she plans to retire from her HR career by 2020. She likes working, but the office politics are becoming a major PITA. She will probably work part time (like me), but it will still be big transition for our household. I’m pretty sure we will be able to handle it, though. I already paved the way to early retirement and we have 5 years 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 be okay.

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. 5 years really isn’t a long time and we need to give it our best push to reach this deadline.


  • Negotiate severance pay and early retirement package. If you plan to work a year or two longer, then it’s the perfect time to work on your benefit package. If you need help with this, buy 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. Also, check that your contact info is accurate on the retirement benefit webpage.
  • 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 start separating from work.


Pay off debts – Luckily, we don’t have debt other than our mortgages. Still, our monthly cost of living would be much more affordable if we paid off our mortgage. I know there are some benefits to having a mortgage, but I think we’d be in a better mental state with no debt at all.

Make a retirement budget – You need to see what your income and expense will look like after retirement. This will be pretty easy for us because I’m already tracking our monthly cash flow. I need to 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. Oh, we can also take RB40jr out of preschool to save some money.

Passive Income – Passive income is a great way to fund your retirement. Our passive income is mainly from our dividend portfolio. Hopefully, we can increase it a bit before Mrs. RB40 retires.

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.

Rental Income – Investing in rental properties is a great way to retire early. Our rental income isn’t quite 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 67, so I’m discounting 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 $200,000. Right now, we have about $45,000 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 14 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 can use it for unforeseen emergencies. My retirement went well and we found out we didn’t need that big of a cash saving. I invested some of that cash and we keep about $20,000 in cash at this time. Early retirees probably should have about 1 year of expense in cash before calling it quits. We’ll try to build up our cash position to $50,000 before Mrs. RB40 quits her job.

Check your Financial Independence – 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 4 years old and life would be a lot harder as a single parent. Some extra income would help with house keeping, baby sitting, and those kind of things.

*Okay, okay. Life insurance is optional. If your kids are out of the house, then life insurance isn’t really needed.

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 out the crashes. You probably don’t want to be 100% invested in stock because your portfolio can deplete pretty quickly in the bear years.

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. We will need to review our withdrawal strategy to account for Mrs. RB40’s retirement. When Mrs. RB40 retires we will have very little earned income and it will be a good time to build our Roth IRA ladder. Using rule 72(t) to draw down our retirement account would be a good option at some point too.

Figure out health insurance – We are all on Mrs. RB40’s health insurance right now and we need to figure out what to do when she retires. We’ll investigate Obamacare more and see how much we’d have to budget for health insurance.

Run your number through some retirement calculators – I like Personal Capital’s Retirement Planner and FireCalc. They won’t be 100% accurate, but you should get an idea of where you’re standing.

Take a test drive – We saved all of my paychecks for a year before I quit my job. We should 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 with the post retirement budget.

Non Finance

Complete health checkup – Go have a total health checkup before you lose your coverage. My dentist was keeping an eye on 2 caps and I told him to get them done ASAP. 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. Of course, most of the higher cost of living comes from housing. If we paid off our mortgage by 2020, then Portland might be affordable after all.

Build a social life outside of work – One of the things retiree miss most about work is the social interaction. Most of your friends will be busy working and they won’t have much time for you. Both of us are introverts, so this one is especially difficult for us. Mrs. RB40 is involved in a local Toastmasters club, so that will help. We also meet new friends through our kid. There are all kinds of hobby groups and that’s one good way to meet new people. Portland has board game clubs, ukulele players, and all sort of interesting groups. Check on the internet.

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. She still likes working, but she wants to work a bit less. 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 an around the world trip, but I’d probably wait until RB40jr is at least 10 years old. I also want to take a few years to explore SE Asia and South America each. Mrs. RB40 wants to travel, too, but not as extensively. She likes having a home base to come back to. We need to work out something here, since she doesn’t want to pull up roots completely. Also, you should also read up on travel hacking if you don’t know much about it.

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.

Discuss the plan with your partner – Don’t spring early retirement on your husband. You need to approach the subject slowly and present him 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’m pretty busy with my kid and this blog. I’m sure Mrs. RB40 will be pretty busy, too. She can join the RB40 team full time and work more here. There are a bunch of projects she’s put off as well and I know that she would like to tackle them. Set a few big goals like writing a book, start a blog, rehab a house, or travel around the world.

Make an exercise program – You have to keep healthy so you can enjoy early retirement. One of the best things you can do is to exercise regularly. Take up some physical activities that you enjoy.

Make a will/real 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 call it quits today, but if you’re not prepared, you might have to go back to work in a few years. (That’s my worst nightmare…) 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.

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

The following two tabs change content below.
Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he couldn't stomach the corporate BS.

Joe left his engineering career behind to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle. See how he generates Passive Income here.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.

Latest posts by retirebyforty (see all)

{ 48 comments… add one }
  • Financial Samurai July 27, 2015, 12:21 am

    You forgot a key item: Negotiate a severance instead of quit!

    Quitting is leaving potentially tons of money on the table. You also become ineligible for the 52+ weeks of unemployment as well.

    Getting a severance helps provide a much smoother transition into early retirement or doing something else.


    • Big Cajun Man July 27, 2015, 4:06 am

      I like that one a lot. Many folks don’t realize that if you are close enough to retirement, you can get paid to GO AWAY! You can either get an enhanced retirement package or an actual severance package (to tied you over until you can retire). Don’t leave money on the table.

      • Sam July 27, 2015, 7:21 pm

        Bingo! Letting people go is excruciatingly difficult from a business perspective, and from a personal perspective. You can help a manager make easier choices. And, if you really are close to retirement, then engineering your layoff is that much easier.

        If I didn’t negotiate a severance, I probably would be much more stressed after leaving in 2012 to do my own thing. My passive income at the time was around $78,000, and it is expensive living in SF!

        • retire40 July 30, 2015, 5:20 pm

          Wow, you are lucky to have so high passive income to retire to. When I retired 2 years ago, mine was only around $60k, but I’ve been renting out everything I can to get this much. Now I’m transiting to index funds investing and has a more relaxed life.

    • retirebyforty July 27, 2015, 9:51 am

      Oops, I forgot a whole category – wrapping up at work. I’ll add them now. Thanks for the reminder.

  • Ernie Zelinski July 27, 2015, 12:59 am

    “Okay, did I miss anything?”

    How about planning to have a daily intensive exercise program like I do to stay in great physical shape?

    As the old saying goes, “If you don’t take care of your body, where do you intend to live?”

    And as Charles Caleb Cotton pointed out, “The poorest man would not part with health for money, but the richest would gladly part with all their money for health.”

    • retirebyforty July 27, 2015, 9:51 am

      That’s a great addition. You need to be healthy to enjoy your early retirement.

    • David @ VapeHabitat September 7, 2018, 12:35 am

      “How about planning to have a daily intensive exercise program like I do to stay in great physical shape?”
      The answer is – the strength of will!

  • Mike July 27, 2015, 4:51 am

    I think the biggest thing is to start figuring out a direction and then start eliminating anything/everything that does not relate to that goal.

  • Dave in Sunny FL July 27, 2015, 4:56 am

    I think you need to adjust your view on life insurance. It’s not for “dependents,” but for when someone else depends on the income or labor that a person generates. So, a child movie star whose parents work as the child’s manager would likely want life insurance on the child, even though the child is (strictly speaking) a dependent. If your household budget anticipates relying on Mrs. RB40’s side income, or her labor (like your plan to take RB40 Jr. out of preschool), she needs coverage.

    • retirebyforty July 27, 2015, 9:59 am

      You’re right. I need to elaborate a little more. I have some side income so that’s why I have a little life insurance. We’ll see how it goes with Mrs. RB40. She has life insurance through work now, but she’ll need to get some private life insurance. I’m pretty sure she will have some income. We’ll see.

  • Steve Miller July 27, 2015, 5:50 am

    Hey Joe and Mrs. RB40,

    I retired 3 years ago at 50 yrs old and love it. I have a couple of comments on your blog that may help.

    We have 2 kids and we saved $120k each for college. We told them if they spent less, they could keep the windfall, if they spend more, they must ante up the additional with a loan. One of our boys is graduating next Spring and will have about $18k left over (nice start to a career). Our other son changed his major about 3 times, dropped classes and is now going to take 5 years to complete his degree and will probably end up with a student loan of about $30k.

    If we had it to do over again, here is how I would have handled it:
    1. First 2 years, live at home, go to a community college
    2. Second 2 years, go to an in-state college, live on campus

    Based on that, I think you could easily budget $60k – 80k in today’s dollars for all 4 years.

    Obamacare works really well for early retirees because you will be living off your dividends and capital gains. You may take out $100k per year to live on, but your taxable income will probably be about $60k and you will pay very little or no taxes. Obamacare will cost you less than $200 per month for a family of 4. We have friends that retired early (have no kids) and they take out $40k per year to live on and their taxable income is like $25k. They only pay $30 per month for health insurance (bronze plans).

    Life Insurance
    We always had life insurance until we retired. Once we retired, we dropped it because our net worth was high enough that if one of us kicked the bucket early, the other would have plenty to live on.

    I recently wrote a blog about lessons I learned since I retired, you can see it here:

    All the best,

    • retirebyforty July 27, 2015, 10:06 am

      Steve, thank you for your input. Your college plan is good. We have a local university here so that’s a great option. The cost of living is a huge chunk of total price. I think Obamacare will work well for us too. We’ll see how it changes over the next 5 years. I tried to leave a comment at your site, but couldn’t…

  • Jon July 27, 2015, 5:57 am

    I love the idea of taking a test drive first. When my wife and I plan to retire early we are going to do just that. We will live 100% off of one of our incomes to see what it is really like to live as though we had much less coming in each month.

    I also agree with having a social network. When I started working from home, I loved it. But being by myself 100% of time does wear on you after a while and this is coming from an introvert who loves to be alone! I’ve overcome it by going to the gym during the day or working at a Panera Bread for a few hours every now and then.

    • retirebyforty July 27, 2015, 10:07 am

      A test drive is extremely helpful. It will give you a chance to see if your plan will work or not.
      Wow, going to work part time at Panera Bread? That’s something I haven’t thought of. Are there any blogger network in your area?

      • Pam July 28, 2015, 7:25 am

        I interpreted “working at Panera bread” to mean doing his work at Panera Bread instead of at home (he mentioned he works from home). Kind of like taking your laptop to Starbucks for a few hours and working from there, instead of at home.

        • retirebyforty July 28, 2015, 10:12 am

          Ahh… Got it. 🙂

  • Adam and Jane July 27, 2015, 6:20 am


    Nice list! I like to add the following.

    – Remove your cell, home phone numbers and picture from company’s directory page.
    – Cash out any Thanks To You points that you may have received at work or any anniversary gift.
    – On your benefit site, change your contact info to your personal email and phone number. Make sure that you have an ID and PW you can use to access your benefit site outside of work so that you can for example check on your 401K and pension when you retire.
    – Stop any pretax deductions to “Wageworks” which is used for mass transit and parking. You have 90 days to use any remaining balance after separation from the company.
    – Cancel/Stop autopayment to Mass transit one month prior to retirement day.
    – Remove your name from all company contact list.

    – Perform all necessary dental work and medical examinations before resigning.
    – Research healhcare, and then get medical and dental healthcare insurance.

    – Stop or reduce mail by signing up for paperless so that you can travel. You don’t want your brokerage, bank, credit card statements sitting in your mailbox or at your neighbor’s place.

    Online bill payments and accounts
    – Setup online bill payment so that you can pay all of your bills (if possible) while you are traveling.
    – Setup online access to all of your brokerage, banks, credit cards, etc for total acess while you are away from home.

    Social Security
    – Setup an ID and PW so that you can review and access your Social Security benefits information.

    • retirebyforty July 27, 2015, 10:10 am

      Thanks for the additions! I forgot the whole category of separating from work.
      Having a total health checkup is essential too. I had the total work done before I lost my coverage.
      Social security is good too. Although most early retirees won’t be able to access the benefit until much later.

  • freebird July 27, 2015, 7:45 am

    That’s a really thorough list, when my time came I did only two of these, FI check and cash cushion check. The rest of the pieces I planned to figure out when I have all day to think about them.

    It turned out what failed for me was the non-finance pieces, mainly not having a plan for the time. I didn’t realize turning back the clock to my youth when any free time was bliss wouldn’t pan out. If you always have great 1-2 week vacations, don’t assume that replaying these without bouncing back into work gives the same buzz. So under “what to do after retirement” I’d suggest making detailed time usage budgets– one for day to day scheduled activities and another for long term objectives (aka bucket list) with specific target dates. I think the money part and the time part both need to be carefully planned.

    • retirebyforty July 27, 2015, 10:15 am

      You’re right. A two weeks vacation is totally different from retirement. You have to plan how to spend your time for the long term. It’s good that you found out about the time aspect early. The next time you retire, you will be much better prepared. Good luck next time! 🙂

  • Tawcan July 27, 2015, 8:10 am

    That’s a very thorough list, will need to run through these later. What about having a will? I guess it’s not really part of early retirement but you might want to make sure you have everything covered just in case.

    • retirebyforty July 27, 2015, 10:15 am

      Ok, I will add estate planning. That’s essential for anyone who has kids.

  • Justin @ Root of Good July 27, 2015, 9:15 am

    Looks pretty comprehensive to me! I don’t think I had every single detail nailed down but I had a very good idea of what we would spend and how we would access our money in taxable and retirement accounts.

    • retirebyforty July 27, 2015, 10:16 am

      I don’t think Mrs. RB40 will have every item nailed down either. I don’t think you need to. If you get most of these, you should be ready to go. Are you back home now?

  • Amber Tree July 27, 2015, 10:13 am

    Great list. I will add it to my FIRE resources to read when I ma about to FIRE.

    It is an eye opener that planning the non financial items is actually even more important than the finance items.

  • [email protected] One More Year July 27, 2015, 10:35 am

    Very nice and comprehensive list. I look forward to seeing this after your reading audience has added their input.

    Something we are planning for – a repair and replacement contingency. How many cars will you need to buy, kitchens to remodel, houses to paint, water heaters to replace, AC units, etc. that will need to be repaired, replaced, or updated in a 30 to 50 year retirement?

    When we started looking at those costs, we knew that it was necessary to determine what would need to be saved/expensed annually to be safe. We built that into determining our retirement number.

  • Alex July 27, 2015, 12:27 pm

    I was all with you up until life insurance. And right after you’ve saved up 25x your annual spending? What do you need all that life insurance money for? Maybe having some life insurance is an ok idea before you reach true FI. Although at some point along the way you probably have enough saved up to support your dependents until they have time to adjust – get children through college, find a job, or whatever. Insurance should be to cover you for things you couldn’t otherwise afford like a huge hospital bill, liability claim, or your house burning down. Buying insurance to cover something you can afford is just gambling that something is more likely to happen to you than a massive insurance company with professional actuaries thinks it is. And just because you have an income doesn’t mean you need to insure it…

    • retirebyforty July 27, 2015, 4:30 pm

      Okay, okay. Life insurance is optional. I will update the article. I have side income and rental income so I thought life insurance would be prudent. Mrs. RB40 wouldn’t want to be a landlord so she’d probably sell the rentals. Income streams will stop when I die.
      Even if I don’t have any income, I think life insurance is still a good idea. Life would be harder as a single parent and a little extra income wouldn’t hurt. Extra money can help with house keeping, baby sitting, etc…

  • Chris Muller July 27, 2015, 5:05 pm

    I’ll agree with everyone and say this list is insanely comprehensive, and quite frankly I am struggling to add to it!

    The one thing that came to mind, though, is discounted purchases. I know this won’t apply to everyone, but many larger companies offer discounts on things like cell phone plans, gym memberships, and even discounted prices on larger items like windows, computers, and cars. If you are getting a discount on a recurring fee that you plan on keeping, be sure to include the adjusted price in your budget, and if you are planning on making a major purchase that your company gives you a discount on, do it before you quit.

    One example I can think of is when I worked for Bank of America, they offered a significant discount on buying a new hybrid vehicle. Again – this one’s probably a stretch, but could be worth considering.

    • retirebyforty July 28, 2015, 10:42 pm

      A significant discount on a new hybrid would be nice. 🙂 We got a few discounts from local businesses, but nothing huge so it wasn’t a big loss for me. Thanks for your input.

  • Jon July 27, 2015, 6:20 pm

    Adam & Jane brought up an idea that I have been toying with. My wife is so worried about our mail and they mentioned “paperless”. My concern is finding a good service that not only will convert my snail mail to email, but one that hopefully will still be in business several years from now. Does anyone have any experience with these types of companies? I am hoping to live in several places around the world for a few moths at a time, but the mail thing hangs like a dark cloud over my plans. Thanks for any help….

    • retirebyforty July 28, 2015, 10:41 pm

      Yes, there are services like that. I considered them when I was looking for a PO box, but I need to deposit the physical checks. Just Google virtual PO box.

  • Reelika @Financially Wise On Heels July 27, 2015, 10:17 pm

    So many awesome ideas to think about. The systems are fairly different here in Europe, however, that was a wonderful insight, thanks 🙂

  • beth July 28, 2015, 5:43 am

    Picking the right quit date is important. I will be quitting right after the anniversary date of my employment. Sick days and vacation days renew on the anniversary date and we get paid out if we don’t use them or retire after that date. An extra 4 or 5 weeks of pay when I retire will be a nice chunk to add to the retirement pot.

    • retirebyforty July 28, 2015, 10:43 pm

      Good luck! I quit on my anniversary date too. It wasn’t by design, it just happened that way.

  • Chef @ Fry The Financial Fish July 28, 2015, 9:19 am

    Great post Joe! This is probably the most comprehensive checklist I have seen on implementing your retirement goals. I think implementing the withdrawal strategy as well as managing side income is key to moving from partial to full fledged retirement. Most of my planning checklist overlaps with what what you have listed. However I would have multiple items related to travel and exercise on the non financial list.

    Within the 1st 5 years of retirement my travel goals are as follows:
    1-3 month visits to Europe /Asia/Australia-
    Summer camping trip across US to visit major national parks.
    Live abroad 1 year


  • laurie July 29, 2015, 5:43 am

    I read your blog a lot, and I greatly enjoy it. But I have to object to your suggestion about investigating unemployment if you are voluntarily leaving your work for early retirement. This is wrong behavior – it’s cheating the system in a way that ruins it for people who actually need the help. Unemployment is intended for people who lose their jobs and are unable to find another right away. It’s for people who want to work and are actively looking for work. An early retiree did not lose their job; they left their job. An early retiree is not actively looking for employment; they don’t want to work. Trying to get unemployment in this scenario is unethical, and I don’t think you should be recommending it as a course of action.

    • retirebyforty July 29, 2015, 9:42 am

      Yes, you’re right. I’ll remove it. I didn’t take unemployment and I don’t think early retirees should. Thanks for looking out for us. Unethical behavior is a slippery slope.

  • Thias @It Pays Dividends July 30, 2015, 3:42 am

    I love the idea about “test-driving” early retirement to make sure your finances are prepared for the loss in W2 income. This might be one of the most important things on the list as it really does help you make sure you are prepared to handle life without the extra money. This list is great and should be very helpful as we go through our journey!

  • Kurt July 30, 2015, 9:07 am

    My wife is thinking along the same lines as Ms. RB40; I’ll pass along this helpful list to her, as I know she / we’re struggling with a number of them. In particular, she’s unsure how to replace the positive feedback and ‘feeling smart’ sense she gets from her career. Any advice?

  • GeePea July 30, 2015, 11:53 am

    When considering life insurance for dependents, don’t forget about Social Security Survivor Benefits when working out how much you need. As long as you have enough credits (40 credits gets you the max, 6 credits is the minimum to get something).

    The information about the amount of benefit you can get will be in your annual SS summary.

  • Dividend Diplomats August 2, 2015, 5:17 pm

    Great checklist here. The aspect I like the best is how it forces you to think about your plans during financial independence. It is one thing to negotiate severance or quit, but if you don’t have a plan of what you want to do (whether it is travel, visit family, relocate), then what is the point? Plus, developing that goal helps you drive that much harder towards reaching financial freedom, which is just another positive.

    Thanks for taking the time to put this together for us. I am sure 2020 cannot come fast enough for the both of you!

    Bert, One of the Dividend Diplomats

  • mary w August 3, 2015, 1:33 pm

    Just before you leave work print out a copy of your office phone/email list. Also ensure that you have personal phone numbers and addresses for people you want to keep in touch with.
    When you get down to deciding on exact date ensure that you consider how everything works, e.g., how to max out 401k for last time, when are bonuses paid, how/when are company 401k contributions credited, should you retire at the end of a pay period or month for some reason, etc.

  • Sylvia @ Miss PF August 18, 2015, 10:26 am

    I just posted my bucket list! Love it!

  • Dave November 1, 2015, 8:59 pm

    I inadvertently semi-retired when I was laid off in June 2013. At the time, I had two months official notice and 6 months of a “feeling” it was coming. While my colleagues were in shock or focused on finding another job, I already knew that I would not be working for the rest of 2013 and maybe longer.

    The strategic planner in me (that was my profession) made a pre layoff checklist which shares many commanilities with RB40’s retirement checklist. Here is a sample of action items that your readers should also consider doing well BEFORE your last day.

    1. Refinance your house and/or open a HELOC. Once the bank finds out you are unemployed it’s going to be a lot tougher. (I actually was in escrow for a second home and applied for a HELOC on my primary residence at the time I received my layoff notice). Remember you don’t need to tap into the HELOC but it’s there if you need it.
    2. Adjust your tax withholding to suit your new tax situation since your tax liability may be lower that year. It might may also be higher if you have a big lump sum severance. Maybe read Financial Samurai’s book and negotiate a multi year severance package.
    3. Adjust your 401k contribution since this might be your last year of contribution. Adjust up to maximize your contribution and enjoy the tax deduction, or adjust down to maximize your cash flow.
    4. Call your car insurance and lower your mileage and therefore premiums because no more commute, right?
    5. Adjust and/or use up flexible spending accounts. Coordinate with spouse if applicable.
    6. Copy data from work laptop (don’t break any laws) in case you need it in the future. This includes contact and email information since you may need to reach a colleague, vendor, customer, etc., down the road
    7. Send a nice (positive) farewell email letting colleagues, contacts, etc. know how to reach you in the future.
    8. Update linkedin and resume even if you don’t plan to work right away or ever. You never know what opportunity will find you when people know your situation has changed.

    Finally I don’t agree with many people’s strategy to pay down their primary mortgage although it does depend upon your personal situation. Assuming you have a fixed rate mortgage under 4% that is tax deductible, I hope you have a strategy to invest free cash in something that will return more than 4% over the long term. If you don’t, then you may have a long and difficult road ahead as an early retiree.

  • barbara December 10, 2015, 7:02 pm

    I haven’t read your entire website, and, perhaps I missed something, but, I wouldn’t say one is retired at 40 if it’s due to the income of their spouse/lover/partner. That’s not retired; that’s being “taken care of”. Did I miss something?

    • retirebyforty December 11, 2015, 9:54 am

      Mrs. RB40 can quit her job anytime she wants to. We just need to move to a lower cost of living area. Our asset should allow us to retire in comfort at 4% withdrawal.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.