In this day and age, the nuances of retirement are altering. Most people now view retirement as a phase of life where they are due to arrive after years of hard work. It is where they expect to experience leisure and to enjoy the fruits of their labour. Thus, it is no wonder that the idea of retiring early appeals to many and is gaining popularity.
Early retirement refers to the choice made by a working person to hang up their metaphorical boots earlier than conventionally expected. Retiring in your late 50s or early 60s has been the norm for a while. Instead, choosing early retirement means that you are expecting to retire in your 40s or early 50s. Some even choose to do it earlier, i.e., before they approach their 40s.
Choosing to retire sooner than usual may have its pros and cons. If the pros outweigh the cons, and early retirement seems like the direction you want to take, know that planning is imperative. Having a proper retirement plan in place is as crucial for early retirement as for a conventional one, if not more.
One has to consider the additional years they would spend as a pensioner and choose suitable pension plans to ensure financial security. Besides the right retirement policy, there are several steps that may help you prepare for early retirement. Let’s look at some tips you may use if you want to retire sooner.
- Start early
If you want to start the pensioner’s life early, it is essential you start your retirement plan early as well. This may start with knowing where to put your money to use in the later phase of life, figuring out which plans would be better for you, and starting to save. You may use a retirement planning calculator to see how much money you would need to live the comfortable pensioner life of your dreams.
- Get insurance
Having insurance means being safe from unforeseen expenses that may otherwise leave a dent in your finances, and thus, offset your retirement plan. Besides life insurance to secure your family, also consider health insurance so you may be prepared to face medical emergencies.
- Stay consistent
Once you have decided to retire early and set a plan into motion for the same, don’t let impulses or temporary inconveniences sway you off the path. Stay on track with your plan and avoid dipping into the pension fund. It is better to have a pension plan that may help you stay consistent and disciplined with your saving goals.
- Pay off debt
It is advisable to not carry any sort of debt into the phase of life where you may not have an active, reliable stream of income. Retirees usually live on their savings, pension, or both. Having debts to pay off can overburden these resources. Instead, pay off all your debt before you retire.
- Stick to a budget
Remember that the pensioner’s life is bound to look much different from the working life you once knew. Your resources will be limited unless you have secondary sources of income for life. In such cases, it is essential to maintain a budget for your routine expenses and stick to it. A pension plan calculator may help you understand how much you will need to spend your retirement years comfortably.
Besides these simple tips, remember that early retirement should be a decision that is right for you. Assess what you want before you commit to such a decision. You may even choose to experiment with a career break, or change your area of work, to gauge if your decision is spurred by burnout or a feeling of stagnancy.
Once you are sure that you want to retire early, know that the path may be full of surprises. Face these with a positive attitude, and it may lead you to live the retiree life of your dreams.