7 Tips to Help You Achieve Early Retirement
This article was contributed to Leisure Freak by freelance writer Tracie Johnson. is it still possible in today’s world to achieve early retirement? Knowledge and planning are key. These tips can get the ball rolling.
Planning for retirement is tricky, especially when you want to stop working years before you need to. But with a little bit of strategy and discipline, it is possible to retire years before your expected retirement age. Check below some guidelines to successfully retire early.
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1. Pick a Retirement Plan
The first step to planning for early retirement is to decide what you want in your life. It may be hard to make decisions when all your resources are concentrated on paying off debts and building up savings.
To hop into retirement early, pick out a suitable retirement plan. This plan will depend on your situation, and it will help you start growing your savings as soon as possible to facilitate an early exit.
2. Automate Your Savings
Automating your savings can help you achieve early retirement goals faster. If you can have automatic monthly transfers to your savings, it will become like another bill you pay without thinking. Additionally, as you prepare for early retirement, you can sell some of the assets you do not need anymore or will not use after retirement.
You can check the value of these assets to see how much they can add to your savings so that you can retire soon. For instance, if you have a car and a truck, you may only need the truck after you have retired from your projects in the countryside. Hence you can use an automotive valuation tool to find out the worth of your car to sell it immediately after retirement.
3. Hire a Financial Advisor
Early retirement means less saving time but more spending time in retirement. Therefore, you need to hire a financial advisor who will help you devise the best plan to save and invest your money. An established financial advisor enables you to develop an effective investment strategy to aid you in achieving your retirement goals and manage your income and investment once you retire.
Create numerous passive income streams. The financial advisor should be someone you are comfortable with since it will be a decades contract. An advisor must know where the money you sweated for is coming from and going.
4. Create Multiple Passive income Streams
The retirement period is the perfect time to pursue your passion, especially when you retire early. Working on a passion is flexible since you can work on it while on vacation, at night, or in your spare time. Create numerous passive income streams.
You can invest in dividends, the stock exchange market, and real estate that will turn into liquid assets after some period. Such passive income sources will cover your monthly burn and grow your net worth. This will ensure you attain an early retirement.
5. Crunch the Current Budget
When you start planning for early retirement, spend more time researching investment strategies than planning your actual budget. Apply a minimalistic approach by focusing on what you value and need and cease consuming and maintaining stuff you do not utilize or need.
Create a sound budget to understand where your money is spent and which expenses you can cut back. The more you spend impulsively, the more you save, and it determines how soon you can quit your job.
6. Have a Reliable Back-up Plan
It is essential to have a reliable backup plan since any plan is good until a crisis arrives. Consider a possibility of a problem, for example, a natural calamity or an economy tank. Run through potential worst-case scenarios and include a plan B. You can develop a backup plan with the help of your financial advisor since they understand the world of finance and the economy best.
7. Pay Off and Avoid Debts
If you have debts, a mortgage, or anything else, you need to pay these off before retiring. It is terrible to be an early retiree with debt because it will take much of your time and energy to clear the debt and pay off your creditors.
The long-term loan you take can jeopardize assets you could utilize for retirement devotions. Moreover, you may use a more significant part of your savings to pay debts hindering your planned investments.
Early retirement is all about planning and being disciplined. You can achieve your early retirement as long as you carefully plan and think ahead of the game. Integrate these tips into your plan to realize your dreams of exiting early.
Thank you Tracie Johnson for sharing these tips to achieve early retirement in a time when many people are exploring ways of taking a different path in life.
Tracie Johnson is a New Jersey native and an alum of Penn State University. Tracie is passionate about writing, reading, and living a healthy lifestyle. She feels happiest when around a campfire surrounded by friends, family, and her Dachshund named Rufus.
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