How to plan your early retirement
As you work towards your retirement, the dream of taking it early seems like just that – a dream. But if you have a few years yet before retirement and have previously planned and saved properly you can consider taking early retirement.
Here are our top 6 tips for implementing an early retirement strategy:
Save, save and then add some more to your savings:
If you have been saving money for years or since starting out your career well done, if not you can still work on your budget and set targets for saving. If you need to boost your savings to reach that early retirement goal, consider cutting back now on certain things (probably going to be lifestyle changes like eating out or other necessaries). Savings obviously work better over numerous years with correct investments and interest. So, if you win some extra cash at Australian betting sites, save all your winnings from those sites.
Avoid lifestyle creep age
It is very easy to earn more and therefore spend more. The old adage of never spend more than you earn is not really applicable you should be saving a fare deal of you salary towards retirement, especially is you started saving later in life. Yes you should still enjoy life now, but focus on your goals and budget wisely.
Check for the best deals on your car, the budget friendly flights for your holiday and keep your early retirement goals in mind. Also consider downsizing, if your kids have gone do you need a large empty house, could you not sell that and purchase a smaller home and invest the remaining money more wisely.
Retirement lifestyle and expenses planning
Instead of planning a random retirement dream in five years, spend time planning out what exactly will be needed once you retire. Calculate the actual costs involved; include your housing, food, vehicles, home and car maintenance, travelling abroad expenses.
Do not forget to factor in inflation as you grow older, and the fact that if you retire younger you will need to stretch your retirement budget out longer.
Ensuring continued health over is vital when retiring early, as this can be more expensive if not taken through a company. Perhaps your spouse is still working and can cover you, or perhaps you can work a deal with your prior company for continued cover. Purchasing individual insurance can add a large cost to your retirement expenses, so plan for this well in advance.
Consider after retirement jobs
Yes this seems to contradict the entire point of an early retirement but using your skills in a part time job or for volunteering can not only assist in earning a bit of extra money but also keep you mentally agile in your old age. Also consider other passive incomes like renting out a room in your house (if you did not sell the big family home) or purchasing a small property or two to rent as further income.