Tips to Help You Achieve Early Retirement
3. Determine your target for savings
This is an important step in which you calculate your “number” or savings target. For this, you need to take the income amount that will be produced from your savings over the years. Thereafter, you can consider the amount you want to safely take out from your retirement savings.
For this purpose, many people tend to use the 4% rule. According to this rule, retirees withdraw 4% from retirement savings each year (readjusting slightly every year to account for inflation). Many like this strategy because it provides a predictable, steady income.
4. Do an honest assessment of your current savings
An important step in planning an early retirement is performing an honest assessment of your current standing. You need to determine how feasible the idea of early retirement is for you.
If you are currently 40 years and you wish to retire in your mid to late 50s, having just $50,000 in your retirement savings will not suffice. $50,000 could grow to around $70,128 in 5 years, $98,358 in 10 years, and $137,952 in 15 years. Retirees are estimated to live 20 years more in retirement. $137,952 is not enough.
You need to take stock of how your current savings will grow in the coming years and when it would be sufficient enough to support your retirement.
5. Have a good savings and investment plan
It is very important to have a sound savings and investment strategy if you want to retire early. An expert financial advisor can help you make sure that you are in good financial shape to retire on time or even earlier.
6. Take healthcare and other concerns into account
When you are planning for early retirement, you need to take other concerns into account too. You need to plan your healthcare and other insurance policies so that you can live peacefully even after your retirement.
By not working, you won’t have access to inexpensive health insurance through an employer and you can’t apply for Medicare until age 65. Be sure to consider the costs of health insurance when you’re planning how much income you’ll need each month in retirement.
And what about life insurance? Does anyone rely on you? Is your spouse or partner also currently saving up to retire early? Without life insurance, your unexpected death would derail these goals.
When someone dies, surviving loved ones are in emotional pain. But will you also leave behind the burden of financial struggle? Life insurance can be an affordable financial tool to help protect your loved ones’ financial futures.
7. Stay on course
After you have developed strategies and planned everything for early retirement, it is important to stay on course. Your course of action for the next few years determines how well you stick to the plan.
Conclusion
Even though early retirement seems too ambitious at the start, with proper financial planning and investment, it is far easier to achieve. With the aforementioned tips, you will be able to set yourself on the right path to financial freedom.
However, life is full of uncertainties. This is where term life insurance comes in.
Buying a life insurance policy is a great way to eliminate certain challenges from your loved ones’ lives. It doesn’t cost a thing to get life insurance quotes through Quotacy. Not even your contact information. If you are not sure how much life insurance you need, you can check out our free life insurance needs calculator.
