President Barack Obama and baseball legend Derek Jeter have one enviable circumstance in common: They’re both able to retire early, while they’re young enough to enjoy a second act.
In Jeter’s case, that second act started with the launch of a website, The Players’ Tribune, which he founded as a forum for first-person stories by athletes. In a video that will be released on the site Wednesday, the famed Yankees shortstop sits down with the president to discuss early retirement. Jeter, who played his last out of baseball in 2014, hung up his cleats at the ripe old age of 40; the president will be just 55 when he leaves office at the beginning of 2017.
In a sneak preview of the video released Tuesday, the president ribs Jeter for staying on the job well past his prime. “For a baseball player, you were old, man,” Obama says. “I mean, let’s face it: We saw you trying to run around those bases.”
Unfortunately, most of us are not in the enviable position of the president and the captain, who can both afford to hit the golf course early. If you’re hoping to get that gold watch before you turn 65, here’s how to make it happen—and how to live comfortably once you do.
1. Make sure you’re saving more than the recommended 10%-15% of your earnings.
While high earnings and a frugal lifestyle are helpful pieces of the early retirement puzzle, it’s more important that you’re consistently saving your earnings at a high rate. MONEY contributor Darrow Kirkpatrick notes that saving one-third of his salary during his peak earning years allowed him to retire at the age of 50. Cutting costs to increase your savings is possible but requires some fiscal discipline. Take stock of your budget: Eliminate unnecessary expenses and learn how to enjoy your free time with low- or no-cost activities (For suggestions, check out MONEY’S list of the best free thing to do in all 50 states and the District of Columbia). At work, be sure to take advantage of company matches in your retirement savings program.
2. Leave as little as possible to chance.
For most people, early retirement requires a bit of a leap of faith. After all, unanticipated changes in the state of your health—and the health of the markets—could throw a wrench into your long-term plans. The key is to be as prepared as you possibly can before you bid farewell to a steady paycheck. Make sure you have a handle on your budget: your monthly fixed costs and other outlays, and your anticipated income in retirement. Keep close tabs on your spending. Plug your numbers into a retirement calculator to see whether your current rate of saving will get you to your goal. If you fall short, you may need to rethink your retirement timeline, overhaul your budget, or or scale back while still earning money with a part-time or temporary retirement gig (more on that below).
3. Exit the company on good terms.
Be sure you let your employer know about your intention to retire three to six months in advance. Help ease the transition by training your coworkers in the skills they’ll need once you leave. Help the company identify candidates for your replacement, and offer to train your successor—or at least write a memo explaining what he or she will need to know upon starting in the position. An added bonus to parting amicably: The extra goodwill might allow you to stay on at your company in some capacity if you so choose, whether it’s consulting or occasional project work. Your former employer can also help by providing a stellar reference for your next position, if you’re intending to work during retirement.
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4. If you choose to work in retirement, make sure you find the right job.
If you didn’t do so during your career, retirement might be the time to take your interests and passions into account and find a an occupation you really enjoy. Avid cyclists might consider a gig at the bike shop, or fishers at the local bait and tackle store. (Or, if you’re President Obama, as a basketball coach.) While your pay will likely take a cut, you’ll be able to set your own hours and enjoy a degree of flexibility you might not have been able to achieve in your primary career. From a financial perspective, make sure that you’ll be earning enough to maintain the standard of living you want. Consulting presents an attractive option for retirees: Pay typically is near the hourly rate of a staff member, minus the benefits. Check out companies like Patina Solutions, YourEncore, and RetiredBrains, which connect experienced professionals with temporary and part-time positions.