Whether by choice or by chance, here's how you can prepare for an early retirement.

How can I retire early?

There's no minimum age when you must retire in Australia. However, according to the Australian Bureau of Statistics (ABS), most Aussies are planning to retire between their 65th and 66th birthdays. So if you're looking to retire earlier than that, you may need to do a bit more planning.

Here are some tips to help you prepare for an early retirement:

• Reduce debt

  A good place to start is paying off credit cards, personal loans, and if possible, your mortgage. The less you owe, the further your retirement savings will stretch.

• Consider downsizing your home

  Your family home might be full of memories, but it could also be your ticket to early retirement. You could free up a chunk of cash to boost your retirement savings by selling your home and moving to a smaller place.

  Note: If you're 55 or over, you might be able to add up to $300,000 to your super tax-free when selling a property you've lived in. If your spouse is also 55 or older, you can add up to $600,000 in total between the two of you under the same downsizer contribution rules.

• Reduce expenses

  Consider reviewing your current expenses to find areas where you can cut costs. Small savings can add up to big bucks over time.

• Check your insurance

  One reason people retire early is because of health concerns. So, it might be a good idea to check in on the insurance offered within your super fund and make any changes if you need to.

• Supercharge your super

  Your super is likely to be one of your biggest assets in retirement, so make it work hard for you. You could do that by making extra contributions to your super to make the most of compounding earnings.

  Another good idea is reviewing your super investments and making changes if necessary.

  Note: At Australian Retirement Trust (ART), we offer a range of investment options to suit different risk appetites, goals, and retirement timelines.

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What if early retirement comes sooner than planned?

Sometimes, life has other plans. You might face an unexpected job loss or health issues that force you to retire earlier than you'd hoped. While it might not be ideal, there are options available if you find yourself in this situation:

Early access to super

If you need to retire unexpectedly, you might meet the rules to get early access to your super. Examples include:

• Severe financial hardship
• Medical conditions that prevent you from ever working again
• Needing to pay for palliative care or funeral expenses for a dependent

Work, but different

If early retirement catches you off guard, you might need to adjust your expectations around work. You could consider casual, part-time, or consulting work to ease the transition into retirement and supplement your income in the meantime. Or you might even find this the perfect time to start a side hustle.

Early retirement schemes

Some employers offer a tax-free (up to a limit) payment to encourage employees to retire early or resign. The Commissioner of Taxation must approve this type of scheme before the employee receives any payments.

The Australian Taxation Office (ATO) has more info about approved early retirement schemes on the ATO website.