The average American retires at about age 63, according to data from the U.S. Census Bureau. But what if you don’t want to wait until 63 or so? Can you afford to retire early? Possibly – if you follow these suggestions:

• Research the costs involved. What will you do during your retirement years?

• Invest more – and invest for growth. If you’re determined to retire early, you will almost certainly need to accelerate your investment rate.

• Cut down your debt load. If you want to retire early, you may need to be even more diligent in controlling your debt load.

• Know the rules governing retirement plan withdrawals. If you want to begin taking distributions from your IRA or 401(k) plan, you will generally be subject to a 10 percent early distribution penalty, plus normal income taxes. (To withdraw from a Roth IRA tax and penalty free, you generally must have owned the account for at least five years and have reached age 59 / You can withdraw contributions at any time tax and penalty free.) However, you may be able to avoid the penalty if you take “substantially equal periodic payments,” which are calculated based upon your age and other factors. Other rules apply, so before taking any, you will want to consult with your tax and financial professionals. And keep in mind that if your withdrawal rate is too high, you risk seriously depleting your retirement accounts. Most importantly, do everything early: Plan early, invest early (and don’t stop), and lower your debt load early.

— This article was submitted by Matt Simmons, Edward Jones financial advisor in Biddeford.

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