If you’ve been dreaming of an early retirement for the past few years but have yet to do something about it, those dreams may quickly become unattainable. The most fundamental aspect of a successful early retirement is preparation. If you wish to retire at 50 but have left it until your 49th birthday before you take a look at putting all of your financial ducks in a row, you are going to be sorely disappointed. A successful early retirement takes years of planning. It’s time to start preparing right now.
Preparing For A Successful Early Retirement
Before you do anything, you need to assess where you are financially. Make a list of your incomings and outgoings using one of the templates available at huffingtonpost.com and make some ruthless financial decisions to streamline your expenditure. Do you really need that caramel latte every day on your way to work? Hone your budget and stick to it. This doesn’t mean you have to forego little luxuries like a meal out or trip to the cinema once in a while. You just need to use your financial sense.
Take a look at your debts. If you have a large amount of debt, consider heading over to best.creditcard and finding a bit of plastic fantastic that offers 0% on balance transfers. This way you can shift all of your debt onto one card without any fees and work towards paying it off. Getting rid of all of your debts is the most important thing that you can do in these early stages when planning for your retirement.
Think about where you currently live and whether you want to remain in your humble abode come retirement. If you live in a lovely five bedroomed house with your partner, but your three kids have flown the nest, do you really need all that space? It may be financially prudent to consider downsizing. This way, your property is more manageable come your advancing years and you’ll have considerably more money in the coffers come retirement day. If your knees aren’t what they used to be, or you can foresee mobility issues in the future, think about looking for a bungalow for your next home.
Once your finances are on an even keel, you’ll need to work out where you put your hard-earned cash. You could keep it in a savings account which is the traditional method of ensuring your money accrues safely. However, interest rates are currently low, and you could see better returns elsewhere. Measure up the risk you are willing to take and invest some of your money in stocks and bonds. Be sure to diversify your investments and spread your money across multiple investment avenues so not to place all of your eggs in one basket. Stock and Bond mutual funds and ETFs are an easy way to begin investing.
The key to making an early retirement feasible is ensuring that you are financially solvent for as long as possible before your projected retirement date. With plenty of assets, money in the bank and some cash spread across investments, you can make your dreams of early retirement a reality.