Retiring early can be extremely challenging, but not impossible. You may be able to achieve your goal of an early retirement if you follow certain steps to help get you on the right path. However, it will require you to cut down on your expenses, increase your retirement savings, or find a combination of the two.
First, try taking a step back and look over your current lifestyle. Once you review everything you spend, you can then try making a cost-benefit analysis to determine if the amount of money you are spending on something is justified by what you get out of it. Consider your weekly alcoholic beverage purchases and if you really need that $100 bottle of wine for dinner. Would you rather drink good, quality wine all the time, or retire early? Depending on your personal situation, you may not be able to do both.
Next, it is important that you have a clear understanding of your needs, and how much money you actually will need in retirement. Make certain that you consider any and all expenses you currently have, as well as ones you will potentially incur in the future. As you age, health care-related costs tend to increase, so make sure you have enough saved to cover out-of-pocket expenses.
Then you will want to consider all potential sources of income and compare what you will need against your retirement income sources to determine any potential shortfalls you may have. If an employer pension, personal savings, and Social Security payments are not enough, you may decide to work part-time in retirement in order to cover additional expenses and to generate additional income.
Finally, if you work with a trusted financial professional to create a plan, then stick to it. Inflation will rise as will the cost of living, so make sure you have prepared accordingly. CLICK HERE to request a complimentary financial review where we’ll sit down, go over your personal goals for retirement, and help create a strategy to achieve and live out the retirement life you desire.