The average retirement age is around 63 years and when you consider the fact that the average lifespan of a person is around 77 years of age that gives only about 14 years to enjoy retirement and for some of us that simply isn’t enough. We go to school for up to 20 years, and work the rest of the time, so why do we only get about 14 years to actually enjoy our lives? There is also the matter of disease and deterioration that many people experience in their old age, meaning that 14 years could easily become much less than that. This is just one of the reasons that many people choose to retire by the time they reach 50 years of age.
But what about the economy? Yes, the economy is in bad shape right now, however with a series of smart financial decisions, lifestyle changes, and of course hard work, early retirement is something that can happen.
Make Your Goal Clear
Simply stating that you want to retire early isn’t good enough for it to actually happen. After all, anybody can say that they want to do something big, but without a clear plan to make it happen, it ends up just sitting at the back of your mind and never really comes to fruition. A good plan could be something along the lines of to retire by the age of 50 you need 500 grand. To get 500 grand you will save at least 20% of all of your paychecks, put half of the savings in a generic savings account and the other half into an investment account. By making the goal clear even if it takes a lot of work it becomes that much easier to complete that task.
Remember The Why
You’ve set clear goals for your retirement. Now you have to stay motivated and on track. To do this, always remember why you are pursuing a big goal like this. For example, do you see yourself retiring to a nice house by the ocean? Maybe you are a bachelor who wants to enjoy his retirement with mature women dating and a vibrant social life.
Take on a Second Part Time Job
If you want to retire early you must have plenty of money flowing in. This means that you may be required to take on more work for a while. Some people are taking on a second job part-time and allowing all of their earnings from that job to be placed into their retirement accounts. Although it may not seem worthwhile at first as you will be working for seemingly no pay you will find in the future that this decision was incredibly worthwhile as your retirement account will grow much faster and you will still have your regular job to live off of.
Focus on Paying off Your Debts
The one thing that prevents many people from being able to retire is the amount of money that goes into paying off debts with interest. Mortgage, car loans, credit cards, and so much more, there are so many ways a person can find themselves paying off debt for years at a time. When your hard-earned money is going towards that debt, it’s not going where it truly belongs. But how can you pay off your debts quickly?
Consolidation loans
If you find yourself with a lot of credit card debt you can look into a consolidation loan. This loan essentially takes all of your debt on record and puts it into one account. The bank that gives you this loan will then give you an amount of money that is equal to the amount of debt you are paying off which you will then use to pay off all of those cards, therefore transferring that debt into a consolidated account which will have a much lower interest rate, but also a much lower payment rate per month. In fact, many people find themselves paying almost half of what they were originally paying when they consolidate their debt.
Pay on the Principal
When paying off a debt with interest when paying on the debt itself you are essentially paying only partially on the interest and partially on the principal. This minimum payment is set up to keep you paying for as long as possible which means that the company you have the loan with will be getting more and more as time goes by. The best way to get out of that debt quickly is to ensure that you pay on the principal as well as the debt. Pay what you owe on a monthly basis, but try and budget out an extra hundred or two to pay on the principal. If you have $1000 in debt and have to pay 10% interest monthly then the company may only set your minimum payment of about 120$. Which would take care of your interest but only about 20$ of the amount that you owe. However, if you were to pay 220$ you would pay 120$ of what you owe, the interest, and your interest for the next month would drop from 100$ to 88$ and the cycle would continue like that.
Take Care of Your Health
A regular visit to the doctor isn’t going to do much for your debt, however not visiting the doctor when you should, ignoring signs of serious health conditions, and of course, not taking proper care of yourself can all be ways that can seriously add to your debts and potential for debts. So spend a little extra on the medicine you know works for you. Brush your teeth and ensure that you are able to eat properly. The difference between very little debt and a whole lot of debt is often just a few dollars.
Cut Out Any Unnecessary Spending
Budget, budget, budget, one of the best ways to ensure that you are able to retire comfortably by the time you are 50 years old is to make sure that you live within your means. This means making sure that you budget your money to the best of your ability and ensure that you are capable of saving as much as you possibly can. When people choose to cut out unnecessary spending they find themselves feeling less stress and are able to live much more comfortably when it is time to retire, but what qualifies as unnecessary spending? That depends on the person, after all, what is a frivolous thing for one person may be a complete necessity for the other. However, there is a way to find out if what you are getting is necessary or not.
Next time you are about to buy something imagine holding that item in one hand, and the cash that the item is worth in the other and decide which one you would rather take at that moment. If you are about to subscribe for another online streaming service take a moment to see if you cannot get the same programming for free through other channels. These are only a couple of ways you can cut out any unnecessary spending but they are incredibly effective.
Get in Touch With a Financial Professional
There are many different kinds of accounts that you can use in order to help reach your goal of early retirement. Roth, IRAs, 401K, Pensions, Social Security, and so much more. There are also your own investments, and savings in your account, as well as how the market fluctuates and can leave you standing on top of the world as well as laying in the bottom of the ravine on the same day. In fact, there’s so much that goes into ensuring that you have saved enough money for your retirement that it can be hard to keep track. This is where speaking with a financial professional will come in handy. It is a bit of an investment to hire someone to consult with about these kinds of things, however, a good financial professional is what makes the difference between a comfortable early retirement and a later one.
A good financial professional will be knowledgeable about the current market and will be able to tell you which investments will be good to look into. They will also be able to help you keep track of exactly what accounts you have and where your money is going.
