Early retirement may sound like a big dream, but it is achievable if you’re willing to do some planning and stick to your strategy.
Here are four steps you can take to put yourself in a position to retire early.
1. Figure out how much money you’ll need after you retire
This involves figuring out what age you want to retire at–if you want to retire at 55 you’ll need to save more money than if you retire at 60–the lifestyle you’ll want to lead, and how much money you’ll have access to through government and private pensions.
Ask yourself questions such as:
- Where do I want to live?
- Can I move into a smaller home?
- Do I want to live in a different location?
- Will I want to travel?
- Will I be eligible for a government pension?
2. Determine where you currently stand
The amount of money you’ve already set aside factors into how much you’ll need to save for your retirement. If you already have solid savings and investments set aside, you may be able to retire earlier or put aside less each month to help you attain your goals. If you don’t, you may have to put off retirement by a few years or you’ll have to put aside a lot more money each month.
Do you currently have an income that enables you to put money away for retirement? Does your job have a benefits plan that includes a pension?
3. Make a plan
The best way to ensure you reach your goals is to have a plan. A financial advisor can help you determine how much you need to save, whether your investment strategy is working for you, and what other steps you can take to make your money work the hardest for you.
They can also help you develop a plan that’s realistic and reasonable given your current situation and your goals. Finally, they can keep you accountable for meeting your milestones and working towards your objectives.
4. Stick to your plan
After you develop your plan, you have to stick to it, and implement strategies that make it easier for you to do so. You might want to consider making your savings and investment plan automatic, so that money is automatically deposited into your savings or investment accounts every month. If you set a budget for spending, keep within that budget.
Make sure you have an emergency fund so that if an urgent financial situation arises, you aren’t drawing from your retirement fund to cover your expenses. If you need to set aside a lot of money for your retirement, consider taking on a side hustle or looking for ways to earn some extra money that you can tuck away.
If you’re looking for ways to save more money for your retirement, there are some steps you can take. For example, you could:
- Move to a less expensive area
- Downsize to a smaller property
- Rent out extra rooms in your home (make sure you follow local laws on renting)
- Purchase used cars with cash
- Find ways to cut back on expenses that aren’t necessities
- Pay down your debt
Early retirement is achievable if you’re willing to plan for it, set aside money and be strategic. A financial advisor can help you determine what you’ll need to retire comfortably and how long it will take you to get that money set aside.
If you’re looking for financial guidance, we’re here to help you. Contact us today to discuss how we can work together to help you achieve your financial goals.