Rohan is a young energetic 28 year-old man, he is working hard today so that he can have peaceful and rocking golden years ahead. Are you also dreaming of making an early exit from the everyday labour? But the way of transforming this dream into reality is not simple. If you wish to retire at 55 instead of, say, 65, you not only have 10 fewer years of saving and investing to build a nest egg, that nest egg also has to hold you through an extra 10 years of retirement. Early retirement only requires three things: earning, saving, and investing. The key to reaching your early retirement goal is making these three things a priority.
Many people assume their expenses will drop once they retire, but that’s not necessarily true. Indeed, a study says that nearly half of retirees actually spent more after leaving their jobs, at least in the initial years after retiring. So if want to accurately judge whether you’ll have a sufficient amount of income to cover your retirement living costs, you need to have a realistic estimate on what you’re actually likely to spend.
Next thing which you have to think about is your lifestyle after retirement. Lifestyle planning can also help with the financial side of preparing for your early retirement, as the way you live in retirement can directly affect how much you’ll spend and thus how large a nest egg you’ll require. How much you need to save depends entirely on how much you spend.
During your earning years, make sure your investment decisions are well thought of. Remember, every penny saved is a penny earned. You should consider investing in long term instruments.
It is never a good idea to pick a loan tab closer to your retirement age. In fact, ensure that all your instalments on already continuing loans also get paid much before your retirement. The golden rule to follow is to never get retired indebted.
The earlier you craft a plan and put it into action, the better the chance your early retirement dream will become a reality. Even if your earnings are average with a modest career, you can retire well in advance of schedule and take pleasure in the perks that come with it. You just need to make smart choices to get there.