Does the idea of early retirement sound appealing? It’s a lifelong dream for millions of Americans, but it could also become a reality when you make smart money moves at the right times. Achieving early retirement often requires sacrifices throughout your life. In your working years, you’ll need to avoid the temptation of keeping up with the Joneses to ensure more of your money is saved for retirement than squandered on shopping sprees.
Retirement is such a loaded term. It means different things to different people. If you’re interested in retiring early, good for you. But you’ve got some work to do. First, you need to define what “early” is for you. Is it age 55 or 65? Then you need to consider what retirement will cost for you. Will you have income from Social Security or a pension?
Traditionally retirement has been defined as retiring from a regular job, to do something else. A lot of people retire from a job because they don’t like it. Redefine your idea of retirement, and get clear on what you are retiring to, not what you are retiring from. Be as specific as possible, for example, “I want to travel to XYZ country to do…” View website article for more details.
If you have your eye on retiring early in your 40s or 50s, your preparation will need to adapt to a financial reality that differs from traditional retirement. Retiring early from conventional work hours doesn’t necessarily mean that you will stop working altogether, but you may limit your hours to live more freely. View website article for more details.
If you want to retire early or retire at all, the best tip I can give is to make sure you’re investing your money. Many people think investing is for rich people making a lot of money. But really, investing is for everyone, no matter how much you earn. Investing most of your money in low-cost investments such as index funds is the best way to make sure you’ll grow your money over the long term.
If you want to retire early, it’s a good idea to get clear on what your baseline cost of living is or will be. This is the amount of money you’ll need to cover your essential living expenses from housing, utilities, medical coverage, household expenses, and meals. Don’t forget to factor in inflation. View website article for more tips and advice on how to retire early.