Early retirement may sound like an unreachable dream, but believe it or not, it is achievable if you’re willing to do some planning and stick to your strategies.
Here are four steps you can take to put yourself in a good position to consider retiring early.
Figure out how much money you’ll need after you retire
Firstly you’ll need to figure out what age you want to retire at; if you want to retire at 54, you’ll need to save more money than if you were to retire at 60. The age you retire will determine how much money you’ll have access to through the government and private pensions.
Ask yourself questions such as:
- Where do I want to live?
- Do I want to live in a different location?
- Can I move into a smaller home?
- Will I be eligible for a government pension?
- Will I want to travel?
Determine where you currently stand
The amount of money you’ve already saved determines how much more you’ll need to set aside for retirement. If you have investments and substantial savings already set aside, you may be able to retire earlier or put less money aside each month to help you achieve your goals. By not doing so, you may have to put off retirement by a few years, or you’ll have to save a lot more money each month.
Does your income enable you to save money for retirement? Does your job have a benefits plan that includes a pension?
Make a plan
Having a plan is the best way to ensure you reach your goals. A Financial Advisor can help you determine how much money you need to save, whether you have a working investment strategy, and what other actions you can take to make your money work the hardest.
Financial Advisors can also help you develop a plan that’s reasonable and realistic given your current situation and your goals. Lastly, they can keep you accountable for working towards your objectives and meeting your milestones.
Stick to your plan
After you develop your plan, you need to stick to it and implement strategies that will help make it easier for you. You may want to consider setting your savings and investment accounts to automatic so that money is automatically deposited monthly. If you set a budget for spending, ensure you stay within the budget.
Make sure you have an emergency fund so your retirement fund won’t be affected when covering expenses if an urgent financial situation arises. If you’re going to need a lot of money for your retirement, consider looking for ways on how to earn some extra money.
Here are some steps you can take to save more money for your retirement. For example, you could:
- Downsize to a smaller property
- Rent out extra rooms in your home
- Move to a less expensive area
- Pay down your debt
- Find ways to cut back on unnecessary expenses
- Purchase used cars with cash
Final thoughts on retiring early
Retiring early is possible if you’re willing to plan for it, be strategic and set aside money. A Financial Advisor can help you determine what you’ll need to do to retire comfortably and how long it will take to get that money set aside.
If you have any questions, feel free to Join the conversation…