Have you already started planning for retirement? Are you wanting to retire early?
Here are a few tips for help you prepare for early retirement.
How to Retire Early:
Make a Plan to Prepare for Retirement
Make a retirement plan.
Ask yourself these few questions: What do you want from your retirement? Where do you want to live? Do you want to travel? Any hobbies you want to start?
Decide what your ideal retirement looks like. Having this goal can keep you on track as you prepare for retirement.
Once you have an idea of what your plan if for retirement, look into how much that’s all going to cost.
How much will you need in basic living expenses? How much will you need for your hobbies and fun?
Then start saving now! Take advantage of 401ks and IRAs. You can also invest in various money market accounts. Talk to a financial adviser, and decide what your best option is.
To save up for your dream retirement, you’ll need to spend less than you make so you can put a good chunk of money away.
You’ll also want to pay off as much debt as possible (ideally all of it). Having no debt will allow you to fully live your retirement with no stress and no extra burdens.
Health Insurance & Taxes
Because you won’t be working any longer, you’ll have to find a health insurance plan.
Get an idea of what these look like, so you can plan accordingly.
You’ll obviously want to include this cost in your monthly budget once you retire.
Taxes are another thing you may forget about. You’ll still have to pay taxes once you retire. Depending on where your money is coming from (brokerage account, IRAs, 401ks, etc) you’ll have varying taxes to pay.
Where Will your Kids be?
Do you have kids? Will they be living on their own by the time you retire? Will they be relying on you financially for any reason?
If so, you’ll also want to add these costs to your budget.
Are there grandkids that you’ll want to visit throughout the year? Plan these travel expenses as well.
As you prepare for retirement, thinking of your family situation is very important!
Expect the Unexpected
You never know what’s going to happen in the future. Maybe one of your children will all of a sudden need some help financially. Maybe you won’t be able to sell your home for as much as you planned on.
Whatever the case may be, expect some things not going according to plan. Better to be prepared!
As you consider all these things, be consistent as you work toward your plan. Follow a strict budget now, so you can put more money away for retirement.
Time is the key with these kinds of things. Be patient, be consistent and be disciplined. Don’t forget your goal!
If you put your mind to it, you can do anything – even retire early!
Market Watch: “How to Retire Early: A 5-Step Plan”
The Motley Fool: “Here’s How to Retire Early”
Can I Retire Yet?: “How I Retired Early”