It’s every working staff’s dream: saying goodbye to the daily grind while you still have your own teeth. In our early retirement fantasies, we’re traveling the world, healthy and in the prime of our lives, visiting those hard-to-pronounce countries we’ve always talked about and sampling the finest local fare. Surveys show that more than half of workers between the ages of 30 and 50 plan to retire before they’re 60. But there’s only one problem with this wishful thinking: Retiring early is easy, but making your money last is hard. One problem with saving up for early retirement is that we tend not to think beyond those first few glorious years of good health and full checking accounts-we don’t do the long-term math. If the average male life expectancy is 75.2 and we retire at 55, then our savings, and stock market investments need to last for 20 years. And what if we live even longer than average And don’t forget that life can get tricky during those last five or ten years. Very few fortunate souls drift away in their sleep at age 88 without ever having major surgeries, hospitalizations or chronic (and expensive) conditions to manage-not to mention the ever-increasing costs of medical insurance and prescription drugs. While we tend to overestimate our health, we underestimate our post-retirement financial needs. A 2002 survey found that only 17 percent of workers thought they’d need 80 percent of their salary after retirement. Forty percent thought they’d be fine with 60 percent of current earnings. That might suffice for a few good years, but the longer you live, the less chance your money will last. Furthermore. isn’t it possible that traveling the world and living out of a suitcase could get pretty tedious Did you ever think that you might be bored without a day job Do you have enough hobbies and interests to sustain you for 20 to 30 years without business trips, deadlines and daily meetings But don’t get discouraged. If you’re serious about retiring early and dedicated to making it work, you can make it happen. All it takes is some serious financial planning, a strict budget and some good old-fashioned luck.So how do you start planning for an early retirement What are the most important calculations What are some common mistakes The first step when planning for an early retirement is to figure out exactly how much money you have right now. This is called your net worth. Net worth is calculated by adding up all of your assets (cash, stocks, retirement accounts and the value of your home) and subtracting all of your outstanding debt (mortgage, student loans and credit card debt). When you know how much you have, you need to figure out how much money you’ll need when you retire. This amount depends on several factors: what you want to do when you retire, how early you want to retire and what standard of living you want to enjoy when retired. If you want to keep up your current standard of living as a retiree, the rule of thumb is that you’ll be spending monthly at least 80 percent of what you’re spending now. That other 20 percent you won’t be spending accounts for work-related expenses: gas or public transportation fares for your commute, dry cleaning bills, lunches and the like. But if you plan to travel, play more golf or fix up a classic car as a retiree, you’ll quickly make up that 20 percent you thought you were saving by not working. Perhaps the most important factor when calculating how much you’ll need is how early you want to retire. There’s a big difference in planning for a 20-year retirement and a 40-year retirement. Plus, the earlier you retire, the longer you’ll have to wait to get Social Security benefits. This isn’t a problem for people who retire after the minimum age for collecting Social Security (currently 62). But if you retire too early, you might not have enough to get by on until Social Security kicks in. Another serious consideration when planning for an early retirement is health insurance. When you’re employed, you pay part of your monthly insurance premium and your employer pays the rest. When you retire, you’re guaranteed coverage under the same insurance policy for the next 18 to 36 months through the Consolidated Omnibus Budget Reconstruction Act, also known as COBRA. COBRA is meant as a temporary protection for employees who lose or change jobs. But even with COBRA, you’ll be paying the full premium, including what your boss used to pay. You’re not eligible for Medical benefits until you’re 65. So, until you reach that age, you’ll need a supplementary insurance policy. When you apply for a new policy after COBRA runs out, you might be surprised at how expensive it is to insure a 60-year-old with pre-existing medical conditions. The cheapest policy for a 62-year-old nonsmoker is 300 a month, and it increases if you smoke, have a history of heart problems, high blood pressure, diabetes and other conditions. One way to get started on your early retirement budget is to use one of the many free online retirement calculators to figure out how much you’ll need in net worth to retire at a certain age. But the only way to know if your planned retirement spending will work is to try a dry run. Try to live for three months on the projected monthly amount that you hope to live on when retired. If it’s not working now, it certainly won’t work when you factor in increased healthcare and insurance costs.How can you start saving for an early retirement now What are the best long-term investments for building up a retirement nest egg Compound interest is a beautiful thing. The best thing you can do right now to ensure an early retirement is to invest as much of your earnings as possible in safe, long-term investments and tax-deferrable retirement savings accounts. A good place to start is with a tight budget. As we learned in How to Make a Million Dollars, one of the quickest ways to become rich is to live a frugal lifestyle. Instead of living beyond your means-buying things on credit that you can’t immediately pay back live below your means. Buy a used car instead of a new one (or better yet, take the bus). Choose the two-bedroom house instead of the five-bedroom one. So, how much money should we be saving from each paycheck MSN Money describes a 20/20/20 system. Starting at age 20, if you invest 20 percent of each paycheck, you could retire in 20 years and live on the interest from your investments. As we’ve already asked, can you live right now on 80 percent of your income, like you’ll be living on in retirement Try setting up an automatic withdrawal (取款) from your checking account. Whenever a paycheck is deposited at the bank, 20 percent will automatically be deducted before you even have a chance to see it, let alone spend it. Now you need to take that money and invest it in something with guaranteed long-term growth. MSN Money recommends a stock market index fund that tracks SP 500 companies. So as long as the stock market goes up over the next 20 years--which it historically has, at a rate of 12 percent annually-your money will grow. Also, if you can increase your earnings slightly every year through pay raises and promotions, you’ll see even more growth. Stock investments are smart if you plan on retiring before you’re in your 60s. When you start cashing in stocks at age 40, you’ll have to pay only long-term capital gains taxes, which are currently at 15 percent. But other common retirement investments have stiff penalties for withdrawing money early. The minimum age to start withdrawing is 59.5. And remember, don’t touch the interest on your stock investments. For the magic of compound interest to work, you need to reinvest every penny of interest.What will happen to a person’s health insurance after an early retirement A．He will lose all the protection against medical problem.B．He will be covered by the same policy for a certain time.C．He doesn’t have to pay for the health insurance any longer.D．He only has to pay part of his monthly insurance premium.

It’s every working staff’s dream: saying goodbye to the daily grind while you still have your own teeth. In our early retirement fantasies, we’re traveling the world, healthy and in the prime of our lives, visiting those hard-to-pronounce countries we’ve always talked about and sampling the finest local fare. Surveys show that more than half of workers between the ages of 30 and 50 plan to retire before they’re 60. But there’s only one problem with this wishful thinking: Retiring early is easy, but making your money last is hard. One problem with saving up for early retirement is that we tend not to think beyond those first few glorious years of good health and full checking accounts-we don’t do the long-term math. If the average male life expectancy is 75.2 and we retire at 55, then our savings, and stock market investments need to last for 20 years. And what if we live even longer than average And don’t forget that life can get tricky during those last five or ten years. Very few fortunate souls drift away in their sleep at age 88 without ever having major surgeries, hospitalizations or chronic (and expensive) conditions to manage-not to mention the ever-increasing costs of medical insurance and prescription drugs. While we tend to overestimate our health, we underestimate our post-retirement financial needs. A 2002 survey found that only 17 percent of workers thought they’d need 80 percent of their salary after retirement. Forty percent thought they’d be fine with 60 percent of current earnings. That might suffice for a few good years, but the longer you live, the less chance your money will last. Furthermore. isn’t it possible that traveling the world and living out of a suitcase could get pretty tedious Did you ever think that you might be bored without a day job Do you have enough hobbies and interests to sustain you for 20 to 30 years without business trips, deadlines and daily meetings But don’t get discouraged. If you’re serious about retiring early and dedicated to making it work, you can make it happen. All it takes is some serious financial planning, a strict budget and some good old-fashioned luck.So how do you start planning for an early retirement What are the most important calculations What are some common mistakes The first step when planning for an early retirement is to figure out exactly how much money you have right now. This is called your net worth. Net worth is calculated by adding up all of your assets (cash, stocks, retirement accounts and the value of your home) and subtracting all of your outstanding debt (mortgage, student loans and credit card debt). When you know how much you have, you need to figure out how much money you’ll need when you retire. This amount depends on several factors: what you want to do when you retire, how early you want to retire and what standard of living you want to enjoy when retired. If you want to keep up your current standard of living as a retiree, the rule of thumb is that you’ll be spending monthly at least 80 percent of what you’re spending now. That other 20 percent you won’t be spending accounts for work-related expenses: gas or public transportation fares for your commute, dry cleaning bills, lunches and the like. But if you plan to travel, play more golf or fix up a classic car as a retiree, you’ll quickly make up that 20 percent you thought you were saving by not working. Perhaps the most important factor when calculating how much you’ll need is how early you want to retire. There’s a big difference in planning for a 20-year retirement and a 40-year retirement. Plus, the earlier you retire, the longer you’ll have to wait to get Social Security benefits. This isn’t a problem for people who retire after the minimum age for collecting Social Security (currently 62). But if you retire too early, you might not have enough to get by on until Social Security kicks in. Another serious consideration when planning for an early retirement is health insurance. When you’re employed, you pay part of your monthly insurance premium and your employer pays the rest. When you retire, you’re guaranteed coverage under the same insurance policy for the next 18 to 36 months through the Consolidated Omnibus Budget Reconstruction Act, also known as COBRA. COBRA is meant as a temporary protection for employees who lose or change jobs. But even with COBRA, you’ll be paying the full premium, including what your boss used to pay. You’re not eligible for Medical benefits until you’re 65. So, until you reach that age, you’ll need a supplementary insurance policy. When you apply for a new policy after COBRA runs out, you might be surprised at how expensive it is to insure a 60-year-old with pre-existing medical conditions. The cheapest policy for a 62-year-old nonsmoker is $ 300 a month, and it increases if you smoke, have a history of heart problems, high blood pressure, diabetes and other conditions. One way to get started on your early retirement budget is to use one of the many free online retirement calculators to figure out how much you’ll need in net worth to retire at a certain age. But the only way to know if your planned retirement spending will work is to try a dry run. Try to live for three months on the projected monthly amount that you hope to live on when retired. If it’s not working now, it certainly won’t work when you factor in increased healthcare and insurance costs.How can you start saving for an early retirement now What are the best long-term investments for building up a retirement nest egg Compound interest is a beautiful thing. The best thing you can do right now to ensure an early retirement is to invest as much of your earnings as possible in safe, long-term investments and tax-deferrable retirement savings accounts. A good place to start is with a tight budget. As we learned in How to Make a Million Dollars, one of the quickest ways to become rich is to live a frugal lifestyle. Instead of living beyond your means-buying things on credit that you can’t immediately pay back live below your means. Buy a used car instead of a new one (or better yet, take the bus). Choose the two-bedroom house instead of the five-bedroom one. So, how much money should we be saving from each paycheck MSN Money describes a 20/20/20 system. Starting at age 20, if you invest 20 percent of each paycheck, you could retire in 20 years and live on the interest from your investments. As we’ve already asked, can you live right now on 80 percent of your income, like you’ll be living on in retirement Try setting up an automatic withdrawal (取款) from your checking account. Whenever a paycheck is deposited at the bank, 20 percent will automatically be deducted before you even have a chance to see it, let alone spend it. Now you need to take that money and invest it in something with guaranteed long-term growth. MSN Money recommends a stock market index fund that tracks SP 500 companies. So as long as the stock market goes up over the next 20 years--which it historically has, at a rate of 12 percent annually-your money will grow. Also, if you can increase your earnings slightly every year through pay raises and promotions, you’ll see even more growth. Stock investments are smart if you plan on retiring before you’re in your 60s. When you start cashing in stocks at age 40, you’ll have to pay only long-term capital gains taxes, which are currently at 15 percent. But other common retirement investments have stiff penalties for withdrawing money early. The minimum age to start withdrawing is 59.5. And remember, don’t touch the interest on your stock investments. For the magic of compound interest to work, you need to reinvest every penny of interest.What will happen to a person’s health insurance after an early retirement A．He will lose all the protection against medical problem.B．He will be covered by the same policy for a certain time.C．He doesn’t have to pay for the health insurance any longer.D．He only has to pay part of his monthly insurance premium.