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Retire Early?

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Can retiring early be possible? Instead of slogging till you’re 70, you could well enjoy that vacation to the Maldives with nary a hint of worry at the age of 55.

Well you can. If you are determined enough, you can call it a day and ride into the sunset sooner than you expect. According to global figures, the average person retires at an age range of around 60 to 70, and based on that range, financial experts reckon one to be considered an early retiree at the age of 55 and below. Here’s some advice on how you can make it happen.

At What Cost?

Calling it a day earlier than your peers will mean financial independence. You’ll need to be debt free and prior to your decision to retire, have stockpiled enough money – savings that’s approximately 20 times the income you’ll wish to have as a retiree, factoring your retirement funds in. One rule you should follow when dipping into your reserves is the 1/25th of your savings rule. With say $100,000 in your bank, you should only take out $4,000 per year.

How Long Will It Take?

It all depends on how determined you are and how quickly you can pay off your outstanding debts if any. And when you have done so, how fast you can accumulate wealth. Seeking a financial planner’s advice at this point in time can help you chart out a timeline.

Start As Early As Possible.

Early retirement can be just a pipe dream if you don’t plan early, and the earlier it is the better. Have you heard of the term Compounded Interest? Money makes money, so start early. You might want to start with this.

Revise Your Lifestyle And Spending Habits

If you want to retire early, always tell yourself to spend less and save more. The less you spend now equates to more disposable income in the future. Do you really need that expensive cup of ice-blended coffee? A cool looking new bicycle? Or eating at a restaurant twice a week?

Pay Off Your Housing Loan

Calculate your monthly mortgage costs and seek to expedite it. The sooner you make the last payment on your property, the faster you can start saving for your retirement fund.

Sustainability

Remind yourself that retirement does not mean being unemployed. Try to start a small business or work part time. Supplemental income would be nice, and no one ever says no to more money. Even a modest amount of cash from working part time can help offset the mediocre returns we see in early retirement. Leisure can be boring, when it is all there is. All play and no work can make Jack a dull old man.

 

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