How to Plan for Early Retirement
If working a corporate job for the rest of your life sounds like your worst nightmare, you may want to consider arranging your finances in a way that can give you some freedom at a younger age. Many people love the idea of working until they’re over the age of 60, but if that thought fills you with anxiety it might be time to make a plan to be able to retire young.
Here are four tips that can help you retire faster.
1. Don’t spend all you make. It is really easy to get caught up in our consumer culture and buy all the latest gadgets and a new car every couple of years. If you want to retire early, it is important that you step out of this mindset. Do what you can to avoid living paycheck to paycheck, and if that means driving a used car or not upgrading your phone, then do those things.
2. Max out your 401(k). From the time you start your first professional job, max out your 401(k) contributions. This is especially important if your company offers a match. But even if it doesn’t, keep up this habit. You won’t miss that money each week because you never had it to begin with. That 401(k) will be your lifeline in the future.
3. Keep debt and expenses low. Student loans are one of the biggest problems for young people and their financial future. Do what you can to keep your debt low and pay it off as soon as possible. You want to maintain good credit. And keeping your expenses low will help you save more money for the future. Avoid financing anything other than a mortgage.
4. Find fulfilling, part-time work. While it sounds great to golf every day or sit on your porch and read, early retirement isn’t usually about the lack of activity in your life. You may want to do something riskier, like turn your hobby into a job. If you have the security of a good retirement plan, your second career could be a real life-changing experience.
Do you want to plan your finances now to retire early?
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