The following is a guest post written by Corey at Passive Income to Retire, where he is sharing his progress toward early retirement.

How do you picture your retirement? Do you envision it sitting on a beach, with a fancy drink in hand with nothing to do? Or, do you imagine it living with your children to save money on housing and living off of social security? I’m sure no one plans for the latter, but the idea is that what you see yourself doing in retirement changes when you will be able to retire.

Typical Retirement Plan

When I grew up, I always thought of retirement as one thing. Essentially, it was working until you are forced to retire for bad health. In retirement, it meant sitting around the house, watching TV, and playing golf occasionally. I don’t know if it is just me, but this image no longer sounds appealing. I hate the idea of waiting to live my life.

My aunt and uncle changed my perception of retirement a few years back. They were smart with their money, both worked at jobs making decent salaries, and most importantly, lived a modest life. They inherited a house from my aunt’s parents and instead of selling it or getting the biggest house they could afford, they stuck with the modest 3 bedroom house that was built well before they were born. Their story isn’t anything radical, but they did decide to retire in their mid fifties. Prior to this, no one in my family had even thought about retirement until early 60′s. This got me thinking. If they can retire in their fifties, why can’t someone else retire much earlier?

A Shift in My Retirement Plan

Recently, I started thinking about how retirement doesn’t have to be the same for everyone. The possibilities are endless. That doesn’t mean that you can just choose what you want to do in retirement and not start working towards achieving that goal.

I used to think that I would like to work for most of my life, live frugally, and have enough money saved to not have to worry about money when I went to retire. That was until recently. I began to see retirement planning differently. Instead of trying to save up a lump sum from which I will live the forty years (if I live that long) in retirement, I began to see retirement as having a certain income. Once I transitioned to income each year, I began to wonder why I have to wait my whole life to do what I want.

Instead of waiting until my 60′s to retire, I plan to retire in the next two or three years. My alternate retirement plan involves having enough passive income to replace my day job by the day I turn 27. Most of this will come from online sources, but I plan to integrate real estate investments as well. I created a new website to help document my goal for early retirement. The other limit that I put on myself is to work less than I don’t work. In other words, only work 3 days a week. It is retirement, after all. Well, kind of – it depends on your definition of retirement.

Why I Can Achieve Retirement This Soon

There are several reasons why I think I can achieve this early retirement. Beyond being determined, I also know that my wife is on the path for a successful career. With her salary, it takes a lot of stress off of me. If we had to, we could survive on her income. This gives me a lot of possibilities. The number one reason why I think I can achieve this is that I plan to live modestly. Because I don’t plan on eating out or living in a big house, I can get by on a decent income. The simple fact is that by cutting down your overall expenses can make retirement come so much sooner.

When Do You Plan to Retire?

One of my goals this year is to become better prepared for retirement. I’m the first one to admit that I’m starting late. I have a small pension plan set up, but I don’t feel confident enough to completely rely upon it come 20-25 years from now. I’ve also had some close friends recently retire and realize that poor planning can cause undue anxiety and uncertainty; something I don’t want to worry about when I reach retirement age. For September, I marked down in my calendar to begin a 403 (b) to help support my piddly pension plan. Though I won’t be able to contribute to it as much as I’d like in the beginning, at least it’s a start!

Learning from others mistakes, here are my top ten signs you’re not (or I’m not) prepared for retirement:

10.) “Gone Fishin’” or camping is a slogan you wish to live during the retirement years. Reality check: Though camp site fees range from free to $20 a night, camping every night in a tent or camper is unrealistic. Most camp sites have a maximum-night stay and the large, comfy RV’s are expensive (about $275K for a base model!). I love camping, but when I’m 70 I may not want to be warming myself over a camp fire every night.

9.) You don’t plan to live long after retiring. Reality check: People are living much longer these days. Even if you retire at 65 or 70, you might have another 15-20 years of living to do. Trying to eek out an existence for an additional 10 years on an income you originally thought you’d need for only 5 years is tough.

8.) You plan to work until you drop dead. Reality check: People have many different definitions for retirement, such as working part-time. This is a great way to supplement a retirement fund, but deciding to NOT plan for retirement because you think you’ll just keep working isn’t a plan at all. Though people are living longer these days, illnesses and disabilities are a reality of growing older. (I just rode my bike a few miles the other day in 100+ degree heat and let me tell you: I’m too old for that crap!)

7.) You’re banking your nest egg on the sale of your home. Reality check: Prior to the real estate’s bubble rise and fall, most people didn’t consider their home or property their retirement fund. However, during those few years, people began thinking more about how the sale of their home could be their nest egg. Unless you purchased your home many, many years ago at a bargain-basement price, counting this as part of your retirement fund may not be such a good idea due to the volatility of the real estate market.

6.) The federally-funded nursing home is looking more appealing every day. Reality check: No one plans on ending up in a nursing home before the age of 65. However, poor planning combined with poor health equals limited options.

5.) You’ve lately found yourself eying your grand-kid’s bedroom counting down the days until they move out. Reality check: Depending on your family’s culture, moving in with immediate family may be a reasonable option. However, if it’s not considered the “norm” within your own family or culture, you might want to have a sit-down discussion with those you intend to intrude upon share space with and make sure everyone is in agreement.

4.) Commune-style living is something you’ve wondered about, and are now thinking you’d like to try. Reality check: I don’t know much about commune-style living. Those words alone conjure up images of hippies growing their own food. Who knows, maybe it’s a great option for retirement!

3.) You plan to stay young forever. Reality check: Unless the fountain of youth has been found, chances are we are all going to get old sooner or later. As the saying goes, “It’s better than the alternative!”

2.) You’re still waiting for your ship to come in. Reality check: The ship’s not coming!

1.) Too many of my top ten signs are eerily hitting the nail on the head! Reality check: Like me,  you’re running a bit behind. It doesn’t mean you can’t catch up or at least begin a solid plan towards your retirement. Start today or mark it down as a “to-do” on your calendar to start this year. The key to compound interest is TIME, something that begins to run sooner than you think!

Though many of my signs are very tongue-in-cheek, the bottom line is retirement planning needs to begin before retirement begins! I’ll be following up this post with  my detailed plan in the next couple of months (keeping me accountable for my goals!)

Do you have a handle on your retirement? What advice would you give someone starting late?