If you are looking for two words to instantly put you in a good mood, try ‘early retirement’.
The simple thought of being able to leave your job earlier than expected in order to spend more time on the things you love is exciting, to say the least.
Sadly, for most people, early retirement is nothing more than a far off dream which will never come true. However, if you are willing to put in some planning and plenty of hard work, you just might be able to make this a reality.
So, how can you set yourself up for an early retirement? The following tips are a good place to start.
Start Saving Now!
Not tomorrow, not next year – now. As is right now. Find a way to start saving money immediately and you will be in a much better position as the years go by. It might not seem like a big deal in the big picture of retirement to save a few dollars here and there, but those dollars really do add up.
Even if you can only push $50 a month from your checking account over to your savings account, do it and don’t look back. Hopefully, you will be able to increase that amount over time and you will soon be sitting on a meaningful pile of money.
Open Retirement Accounts
This is another one of those points that you need to take action on right away. The sooner you can open up and fund retirement accounts, the sooner those accounts will begin to accrue value.
Time is your friend when it comes to retirement investments – the more time you can allow these accounts to grow, the more valuable they will be to you in the long run. This is especially important if you want to retire in your 50s rather than your 60s. Get started with some retirement accounts as soon as possible.
Maximize Contribution Matching
You have probably heard this tip before, but it is important nonetheless. If your employer offers 401(k) matching up to a certain dollar amount or percentage of your income, be sure to maximize that contribution. This is essentially free money, as it is an add-on to your salary which you would not receive otherwise. Don’t take this benefit for granted – take advantage of it to the fullest for as long as you can.
Make Smart Decisions
As the saying goes, a journey of a million miles starts with a single step (or something like that). In other words, if you have a lofty goal such as retiring early, the best thing you can do to reach that goal is put one foot in front of the other. Make small, smart decisions which will add up to financial savings.
Do you really need to order an appetizer and dessert in addition to your main course? Are you using that gym membership enough to justify the cost? Saving little amounts of money along the way can leave you with large amounts of money when the times comes to retire.
Are you hoping to retire early? How are you preparing for early retirement?
Photo courtesy of: Counselling