The average retirement age in the US is 65 years. And, in other countries, it’s similar. But, many people have a key life goal of retiring early. The idea of more time to pursue other interests and financial freedom are big drivers in this.
Even if this goal seems out of reach, with careful, thorough planning and self-discipline, it can be a reality. Here are some steps you can take if you’re aiming for early retirement:
1. Have a strategy
First of all, if you’re planning to retire early, you need to create a realistic plan of action, starting with working out how much you need to live comfortably during retirement.
After doing this, you will need to work out how much money you need to save, taking into account any changes that might occur, like changes to the economy of personal circumstances.
2. Work hard consistently
Once you have specific financial objectives in mind, you need to work hard consistently and be self-disciplined in order to achieve them.
There are many ways to make money, such as having a high-paying job, a successful business, or having other investments. It’s important to boost your income as much as possible.
3. Start investing money
Investing money in income-producing assets is a great way to boost your capital and retire early. It could be in property, stocks and shares, or a high-interest savings program.
Although it can be tempting to wait until later in life to do this, this can mean not having enough time to reach your goals. Ideally, start investing and saving as early as possible to build compound interest.
4. Cut your living costs
Making extra money is one thing. But, if it all gets spent, it’s not going to help you achieve your long-term goals. If you want to retire early, make sure you are keeping your costs to a minimum.
Some areas to think about cutting back on include housing, vacations, and cars. Additionally, avoid getting into debt by spending on unnecessary items.
5. Set up automatic savings
Last but not least, if you want to make sure you stick to your savings plans, set up automatic savings, rather than just leaving your money in a current account.
Pay a percentage of your income into savings each month. This way, you can ensure the money actually goes into savings, rather than being spent on everyday expenses.