Do You Want To Retire Early? Take These Steps

When you’re young, and perhaps just starting out with education and career goals, you may not think about retirement at all. It probably seems like a lifetime away, and something you don’t need to be concerned with. However, if you want to retire while you’re still young, planning well ahead is the way you can retire early.

If you’re already set in a solid career, the time to start saving and planning for retirement is now. As the saying goes, there’s no time like the present! The following steps can be used as a guide to help you plan an early retirement so you can enjoy life before your golden years and beyond.

The first step to take is to evaluate your current financial situation. Base your goals realistically on what you are currently earning and how much of those earnings can be set aside to save for retirement.

Create a monthly budget. If you don’t know how much you need for monthly bills and expenses, you won’t know how much you can set aside each month to save for retirement. Expenses that factor into your budget should include housing, such as your monthly rent or mortgage payment, insurance coverage for your home, car, and healthcare, utilities such as water, heating and electricity, and essentials such as food and household supplies.

Once you have determined your monthly cost of living add it up and deduct it from your monthly income. This will give you the amount of money you have left and from there you can determine an amount to put towards retirement savings. The earlier you start to set money aside, the more you will have saved by the time you are planning to retire.

While it’s tempting to spend that money on things like a new car, vacation or other extravagant purchases, if you are disciplined you can set realistic goals that help you determine at what age you can comfortably retire.

You may be familiar with the term, living below your means. That’s not to say you should deprive yourself of necessities, but it does mean you should be conservative with your spending so you can save money each month in your retirement fund in order to meet your goals.

When determining your spending money, there is one simple question to ask yourself, do you need it, or is it a desire driven purchase that, if you’re honest with yourself, you know you can live without. Every time you make this decision; it could mean the difference between setting money aside for retirement or wasting it on an unnecessary purchase.

If you work for a company that offers a 401(k) savings plan, inquire to see if they offer matching contributions. This is an effortless way to potentially double your retirement savings over time to reach or exceed your goals. IRA accounts are another way to take advantage of savings opportunities that earn interest over time.

If you are not making enough money currently to meet your retirement savings goals, you may want to consider a side hustle, meaning a project or part time job to earn extra income. This could be another way to contribute to your retirement savings by adding extra money to your account each month.

Another smart retirement savings tip is to reduce and eventually eliminate any debt you have, especially loans or credit cards charging high interest rates. If your goal is to be debt free, and work toward financial freedom, start paying extra on your credit cards or loans to pay them off, and avoid taking out new loans or credit cards that charge high interest rates. This will give you more disposable income to put towards your retirement savings.

By taking steps to plan for the future, you will be able to look forward to an early retirement you can fully enjoy at an earlier age than most retire and fill your days with enjoyable activities that make you happy!