Retiring early is a goal for many people. However, according to findings from the Boston College Center for Retirement Research, the average age of retirement has risen to 65.7 years old for college-educated men, 62.8 years old for college-educated women and around 62 years old for people whose highest level of education is a high school diploma.
Retiring early requires that you plan ahead
The early retirement dream really centers on gaining control over your time. You may equate retirement with the idea of collecting Social Security benefits, but some Silicon Valley tech millionaires are retiring by 40 and younger. In order to make early retirement a reality, you may want to create a financial plan. Set a target savings value that is equal to the amount of money you'll need in order to retire early.
There are many online tools that can help you build a plan with what you have and show you the outcome of various scenarios. Taking into consideration your current and future income, in addition to analyzing your current and future expenses, can help you determine how much money you'll need to have in order to retire securely and comfortably.
Consider establishing additional streams of income
Look into expanding your income streams in addition to maintaining your current job. Invest in income-generating assets such as rental properties or a small business. Take on a part-time job or start a side hustle to create another income stream to help cover your current cost of living. That way, you can save more money and put it toward your retirement fund.
Plan now to better position yourself in the future. Think about money, but also think about time. You're trading your dependence on a job that provides you with money for the freedom to spend your time however you like. Remembering why you are taking measures to save money now can be very motivating.
Here are six tips to adhere to if you want to achieve an early retirement:
Retiring early requires that you pay attention to your current spending habits and align your behavior with your long-term goals for the future. There are many finance-tracking services online that can help you create your own spreadsheet, which can be used to track income versus expenses. Other income streams can create more flexibility and allow you to reach your early retirement goals faster or more easily.
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