When we’re young, we used to say that it’s too early to think about retirement. We thought we still got plenty of time for that.
We loved and enjoyed our jobs. We felt satisfied at the peak of our career. We forgot that we are getting old and we need to prepare ourselves for the future. Before we know it, we’re getting old and then most probably, we have to stay working until at the age of 65 to sustain our daily lives.
But who doesn’t want to retire early?
Who doesn’t want to travel the world while you are still fit and healthy?
Who doesn’t want to live life to the fullest?
Retiring early is not impossible with hard work, persistence, and discipline.
It can be achieved. Below are tips on how to retire young.
The earlier you start planning for retirement, the better. Be specific on what age you want to stop working and make this your life goal. Consider if reasonable and attainable by reviewing your financial standing. Evaluate your income and expenses and think of ways to make the most out of it. Plan your strategies and do it faithfully. Financial planning is a lifelong process but you are most likely to succeed if you will start working on it now.
Live on Less
By living less, you get to cut your expenses and maximize your income. Being frugal does not mean that you have to deprive yourself, but this is about smart money management. Be wise on spending. Know what you can and cannot afford. If you are doing groceries, catch the best deals. Take advantage of sales, discounts, rebates, freebies, and coupons. Challenge yourself not to bring your credit card every day to avoid splurging on non-essential items. Live simple.
Start your Retirement Account Today
Aside from the 401(K) Plan sponsored by your employer, it is best that you contribute also a portion of your paycheck to take advantage of your company’s matching benefits. Matching contributions from companies usually have vesting schedule or designated period of time over which the fund will be all yours.
You can also avail of the traditional IRA. This allows you to have a complete control of your retirement investments.
Establish A Business
Entrepreneurship allows you to achieve financial independence. Never settle on being an employee. Use the experience, skills, and knowledge that you learned from employment to start one. Start by knowing what you love to do and make a profit out of it. Every successful business started small. Challenges may come along the way but determination and proper decision making will do the trick.
Have A Multiple Stream of Income
Look around for money generating opportunities. You can be a freelancer. Take advantage of offering your skills especially if it is a technical one. You can apply as a part-timer around your neighborhood during weekends or after shifts or you can do buying and selling which is, in fact, an incredible profit potential.
Stock Market, Bonds, and Mutual Funds are long-term investments and are perfect for your retirement plans. Always set a portion of your income on these financial instruments to maximize your money. You don’t have to monitor your investment portfolio as often as possible. Free yourself from worries and let time and money work for you. Of course, there are risks so don’t forget to have constant communication with your financial advisors.
Pay Your Debts
Having a large number of debts hampers you to retire early. Settle your credit card loan to get rid of accumulating interest. Pay on due dates to avoid penalties and other charges. Prioritize which of your debts will you pay off first and if possible, request for a rate reduction. When you are out of debt, you can now focus on your retirement fund.
Purchase A Health Insurance
We get old and will surely not be in a pink of health. A sudden onset of a serious illness may leave us with overwhelming medical bills. The last thing we want is to file for a business bankruptcy or exhaust all our investments just because we got sick. When planning to retire, make sure that you have something to take care of your medical and hospitalization needs when they arise.
Preparing for retirement is very hard to do especially that you cannot feel its immediate rewards and benefits. Live life with a long-term mindset. Retiring as early as 40 is achievable if we alter our attitudes and work for it diligently.