Here are eight rules you should consider if you're thinking about taking an early retirement:

A house once filled with the constant clamoring sounds of a growing family has grown silent. Family visits have become few and far between. The silence seems deafening. If these thoughts seem familiar, maybe you and your spouse have outgrown a home that you once considered to be too small.

With many other soon-to-be seniors finding themselves in similar situations, retirement communities, also known as 55+ communities, have become a possible alternative for people looking to downsize their homes. These neighborhoods, or complexes, which vary from condominium-style settings to single family homes, usually require that at least one member of the household be age 55 or over.

Retirement communities typically offer an active and independent lifestyle to those who do not require assisted living facilities (ALFs). The Housing for Older Persons Act of 1995 eliminated the requirement that these communities have “significant facilities and services designed to meet the physical and social needs of older persons.” This legislation has increased the popularity of such communities as an alternative for people age 55 and over, who do not require assistive care. 

Considerations
Relocation, of any kind, requires a careful examination of the possible pros and cons. Before selling your home to move to the newest 55+ community, consider the following:

Security. Retirement communities may offer security that a typical neighborhood would not. Generally, they have security guards at the entrance of the neighborhood or building. Knowing that this added protection exists, you may sleep more soundly at night.

Recreation. With people living longer than ever before, gone are the days when retirement brings to mind an idle existence. These days, retirement can be as active and as fun as you make it. Typically, retirement communities offer a recreation center that manages group activities, which may be as vigorous as sporting events, or as passive as card games. 

Medical Facilities. Many retirement communities have medical facilities located within the property limits, although not all do. You, or your spouse, may not require constant care; however, it can be comforting to know that qualified medical professionals are accessible at any time.

Maintenance. Although you might have once considered shoveling snow, mowing the lawn, and picking weeds, pleasurable pastimes, they may now be tiresome tasks. Oftentimes, these self-contained neighborhoods handle exterior maintenance—including lawn care and snow removal. A retirement community enables you to enjoy a yard, without having to maintain it.

Costs. The services retirement communities provide come at costs that must be considered in addition to typical homeowners’ expenses. Usually, there are entrance fees, as well as monthly maintenance costs (similar to condo fees). These additional fees may increase your purchase price by thousands of dollars.

Limited Socialization. While many people consider a retirement community’s socially- oriented lifestyle an advantage, some consider it a disadvantage. If transportation is not readily available, the prospect of frequently being surrounded by the same group of people could seem confining.

Determining where you want to spend your “golden years” is a decision that requires serious consideration. However, whether you choose to stay in your current situation, decide to call a retirement community home, or opt to explore other living arrangements, it is important that you are comfortable with your choice.

Retirement should be a time to relax, free from financial worry. Many people dream of retirement as a time to travel, or a time to pursue hobbies or special interests, a break from a 40- hour workweek. But without careful retirement planning, you may actually face the prospect of working harder and longer during your so-called retirement years than you ever imagined. With this in mind, it may be safe to say that the best-laid plans begin well before the age of 65

Know Your Resources

How many times have you said “I’ll do that when I retire,” expecting to have more time to pursue other interests when you no longer have to report to the office everyday. But have you considered what the costs of these interests may be? A general rule of thumb is that you will need 60% - 80% of your pre-retirement income to maintain your lifestyle during retirement. Careful planning can help offer security and comfort in retirement, along with the resources to pursue these new interests.

For many, Social Security, employer-sponsored retirement plans, and personal savings are the primary sources of retirement income. Although Social Security may contribute a certain percentage, the Social Security Administration estimates (SSA, 2005) that for the average worker, benefits replace only 40% of pre-retirement income. However, for many, an employer-sponsored retirement plan can also contribute substantially. But both of these sources may need to be supplemented with personal savings to help provide enough income to maintain the lifestyle to which you may have become accustomed, and/or even provide the extras you look forward to in your retirement years.

Put Time on Your Side

Early retirement planning, puts time on your side. It is never too early to begin saving and never too late to start. In fact, an advantage to early retirement planning is that the longer you have before retirement, the greater your opportunity to increase your savings through potential growth.  

An equally important consideration for retirement planning is the ever-present reality of inflation, which can quickly shrink even a substantial savings total. For example, a modest 4% inflation rate, maintained over 15 years will reduce the purchasing power of $250,000 to $138,816. Starting early may help your savings outpace inflation.

Although it can be difficult to imagine a time when you will not have to be at the office, or site, in the morning, the day will be upon you sooner than you think. With this in mind, planning for retirement now, even if it seems premature,  may help ensure a secure financial future for you and yourfamily.