Does it seem like the likelihood of retiring early is a unattainable dream? Well, think again it’s not a completely unrealistic goals to retire by age 50. Of course, it won’t be an easy task and requires intentional planning and immediate action. Here are seven guidelines to set you up for an early retirement.
Save Whenever You Can
This guideline is a no brainer, but it needs to be mentioned because it’s a huge factor in determining your retirement age. You aren’t going to be able to have the latest and greatest toy throughout your life, so start having self-control now. Be frugal with your non-essential spending.
You should start saving as soon as your get your first job, but if you haven’t saved before age 25 you’ll need to put more money in savings. That entails only living on the bare minimum since you will probably need about 33 times more money then you’d expect to spend once your turn 50 and retire.
Have Your Prioritized Your Spending?
When your buying items keep their longevity your number one priority. You want your products to have a long lifespan. Cheap products are deceiving because they are initially cost saving, but will wear out faster causing you to spend more. First you should look at longevity, then reliability, and finally affordability.
When buying more expensive products like a house or car keep in mind the cost of owning that item. For example, more expensive cars cost more to insure and homes with swimming pools have a lot of maintenance fees.
Look Into Your Revenue Streams
Earning more money helps put more money into savings. Start with asking for a raise if you deserve it and if not then look for a better paying job. That’s not the only way to make money though, begin focusing on ways to make passive and portable income. Think about what you could offer as far as intellectual property that could be sold perhaps in the form of an eBook.
Stick To A Good Investment Plan
It’s imperative that you have a retirement plan in order to retire at an early age. IRA’s and 401(k)’s are a great place to start because they are tax-free. But, those plans may have penalties if you withdraw early from them or they won’t give you the same return on your investment if you withdraw early.
Keep in mind risky investments require a long investment period so you can recover if there is a big loose, so stick with conservative plans. That could be investment plans like dividend stocks, rental properties, or bonds.
The Retirement Gap
So if you have a plan that doesn’t let you take out money without a penalty and pensions and social security is not available at 50, what should you do? Prepare. A great option is to leverage the equity in your home by downsizing.
Now, Where To?
Choosing where you are going to retire will change the amount of money you need to save in order to live. Some of the most popular and cost-efficient places are Costa Rica, Vietnam, and Belize. If you want to stay in the country then consider a smaller city that evades high tax rates and demand for housing.