Many professionals want to know the answer to the same question: How to retire early?
While an early retirement is an attainable goal for some people…
People are living longer these days.
And a longer life means you’ll need to save more money for retirement.
But don’t worry.
YOU can still retire early!
We’ve came up with some great ways for you to start saving for an early retirement.
So keep scrolling down to find out how to retire early.
The Risks of Early Retirement
More and more people plan to retire early. Getting out of employment before the age of 65 has its risks though. Medicare hasn’t taken effect. There’s a likelihood that Social Security hasn’t either.
Retiring at 55 could mean that your 401(k) hasn’t reached full maturity.
A point where you could reach the millions necessary for a comfortable retirement.
None of these factors alone will dictate the quality of your retirement. They don’t even predict your possibilities. The more you have for retiring, the better. We don’t discourage early retirement if you’re passionate enough.
We only suggest that you think it through.
Make A Wise Decision
First, consider if this option is right for you. Retiring early is not just about leaving a job you’re unhappy with. You can always find another job in that case. Looking for an early option to leave the work life behind is about something more. It’s not the money. This is why you must decide.
Consider the personal reasons for early retirement making sense to you. Doing it before the age of 65 is like someone leaving school to become an artist. They’re doing it for the passion. They take into account a potential decrease in their quality of life.
Some have struck it rich and have secured the millions needed to live comfortable on roughly $40,000 yearly. This is a decision made based on the resources you do or don’t have.
Overview Your Investments
Early retirement may just be a future plan for you. Great. Start doing what’s necessary to prepare today. This begins with a savings coupled with strategic investments. Others are looking at the option within a couple of years, months or weeks. You can still benefit with jumpstarting the right decisions.
The important thing is using your investments to help you gauge your options. Retirees need enough to live on 4 percent of their net worth. That requires one million plus dollars in the bank.
Yet a diversified investment strategy can achieve this.
Say that you’ve done more than a 401(k) or Social Security. If you didn’t make withdrawals from those accounts, could you live off the dividends of stocks? Could you live by renting out properties in your name?
In the end, money has the final say. Passion won’t be enough when the funds run out.
But is There Greener Grass on The Other Side?
The option of early retirement is often an emotional decision. This is not just about doing what’s right. The workforce consists of unhappy workers. You may be one of them. But this unhappiness or lack of passion isn’t why you up and leave. You should abandon your career with a substitute in mind.
Yes, we’re suggesting that substitutes for your work environment do exist. Throwing in the towel now may be premature. It may be a “grass is greener on the other side” mentality. The fact is, it would make no sense to invest your energy, passion and money into an option that backfires.
This is why early retirement is best when prepared at earlier stages in employment. But if you find yourself pursuing this path out of an emotional imbalance in life, then start your solution by first finding peace of mind. Doing so could change your perspective on early retirement.
Changing Your Lifestyle Now and Not Later
Taking the right steps toward early retirement requires responsibility. It requires you to start preparing now. No delays. No excuses. Start immediately, and don’t look back. Since leaving work early is a huge feat, your commitment will have to be just as big.
Consider cutting back in more ways than you would for a normal savings. Did you know that you need 10 to 15 percent of your yearly income for savings? Early retirement will need you to put twice, triple and even four times as much away. What kind of life would you live if you did? Are you OK with it?
If so, then you still have areas to improve. Reduce your debt to zero by starting now. If you don’t have debt, avoid it. …apart from real estate that gives you equity.
Your 401(k) and Potential Fees
Your 401(k) must match when the option exists.
The fees you receive from making withdrawals could exceed money you have after 30 years. Which means you must avoid fees. Buying the smallest house you can find is wise, so more money can go into investment diversity. Cutting back on eating out for roughly 20 years might be necessary for your income level.
But don’t let any of these things discourage you. Early retirement is a choice that comes through passion or possibility. Those who choose it from utter passion will find the-price-to-pay worth it. Others have obtained enough success. The decision becomes theirs for the taking.
Now is when you decide.
Have you retired early?
Or do you know someone who retired early?
Well spread some of that retirement knowledge that you have!
Tell us about it in the comment section below!