Sorry, But These Reasons Mean You Won’t Retire Early!

Avid readers know this site is about one thing: getting people to early retirement. Once the shackles of working are undone, we can all enjoy our golden years in peace. However you like to do it is up to you, but there’s no way to relieve the stress until the workplace no longer dictates your life. Online posts tend to focus on what you can do to make it happen sooner rather than later. Truth be told, aside from the actions you should be taking to reach early retirement, there are things that can harm your chances too. Stamp them out and your future will look a lot rosier. If not, it may mean you won’t retire early. Here are four examples and the solutions.

Sorry, But These Reasons Mean You Won’t Retire Early!

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You’re Bad At Saving

Without a considerable nest egg, there is no way you’ll reach early retirement at a young age in the right financial shape. Rest assured it’s difficult for most people to hit the target in their 60s, so doing it in your 50s or earlier is even harder. To start with, it’s essential to get into a savings routine and to maintain it throughout the majority of your working life. For example, saving 10% of your salary is better than accumulating nothing whatsoever. Although a 10% savings rate is commonly recommended, remember that this savings percentage is only a starting point. It’s a savings rate geared for those who will retire at a traditional age. Stick to that savings rate or less and you won’t retire early.

To reach early retirement you will have to raise your savings rate to at least 20% to 25%. Don’t just take my word for it, it’s also what http://money.cnn.com/retirement/guide/investing_basics.moneymag/ recommends. Direct debits are handy as the money disappears on a routine schedule which means it limits any spending temptation. The same goes for automatic payroll deductions. As the saying goes, you won’t miss something you never had.

If early retirement is your goal then the first step is ramping up your savings rate. Any increase in income through promotion, raises, bonuses, side hustles, and other financial windfall should be directed to retirement savings.  

You’re Living The Good Life

No one resents the fact that they have a nice house and fancy car. One thing that needs to be pointed out is that it’s hard to save and spend money at the same time. But there’s no need to pick one or the other because with financial discipline and a mindset change you can do both. However, you have to live within your means. If at the moment, a high percentage of your wage may leave the household without a second thought, then it will certainly harm your retirement options.

Sometimes it’s a simple matter of redefining what living the good life really is. Setting a realistic budget, paying off all debt, and focusing on happiness instead of stuff is the common advice for early retirement. But there may be some little things that you are doing that’s harming your chances. For instance, if you have a vice that is expensive, think about slowing down or finding an alternative. Do you smoke or like to go out to bars for drinks? Do you routinely engage in expensive activities? If so then also look at scaling things back a bit. Do you go to every concert that comes to town? Maybe you’re into blowing off steam traveling to places like Las Vegas to gamble and catch some shows every 3 months. Many people blindly engage in expensive vices and activities. It costs them thousands of dollars. Backing off of expensive habits or activities and other extravagant spending will ultimately guide more of your income toward your early retirement savings goals.

You’re Losing Earnings

The title “Losing Earnings” can mean lots of things, but let’s concentrate on the inability to make money. Sometimes, a freak accident can leave you unable to work and maximize both your earnings and savings. Remember, you must take responsibility for your earning capabilities and potential like you are a business. Legal options to protect a business is a common practice.

In the case of your being income-sidelined due to an accident or other wrongdoing by someone else, everyone should consider legal advice. For a good example of the kinds of services a lawyer might cover, head to https://www.craigswapp.com/salt-lake-city-personal-injury-lawyer/ or find an attorney who practices law where you live and specializes in what caused your decreased income earning potential.

Many people hesitate to go the legal route to find remedy. They wait and think “do I deserve compensation?” The answer is yes, of course, when the incident wasn’t your fault and you’re suffering as a result. Suing is never nice, but it’s a part of life when there’s cause and the money is tight.

You’re Not Committed

Retirement creeps up on people, especially the early kind. You have to be ready to start the early retirement process as soon as possible and stick to it. Otherwise, it will push back and back until the actual date hits, you are in old age, and you’re struggling for money. People say you should begin saving in your twenties, and it’s true if you plan on quitting in your 50s or earlier. If you’re not committed to your early retirement savings and lifestyle plan then you certainly won’t retire early.

Set a realistic and sustainable budget that you can commit to. Find your lifestyle and budget sweet-spot. Stay committed to a plan where you can live your life below your means without feeling deprived and save a higher percentage of your income.

 

Is any of the above familiar? Are you ready to change your ways to get back on track?