Do you have big dreams to retire early? Do you have what it takes to get out of the rat race before you have arthritis? I was talking to a lady at a wedding reception and she was telling me her goals of retiring early (in her mid 50′s instead of mid 60′s). She was serious about quitting her day job before she was unable to get around. She wants to enjoy life before you body quits on her.
Many people get in the habit of the 9-to-5 grind and forget that it is possible to retire early. For those who think about retiring early, it may seem like just a dream and it will never happen, but it is possible. Not very many people are able to retire early, but those who do have been able to do it because of one or several of the reasons included in this post. While performing one of these steps won’t guarantee early retirement, it will help you get there.
Steps to Retire Early
Live a Frugal Lifestyle – One of the best ways to retire early is to minimize your expenses. This will not only increase the amount of money you can save for retirement, but it will mean that you require less money in retirement. If you are trying to replace your day-job income with passive income, it will be much easier to come up with less money than more. There have been a few people who have retired in their 20′s and 30′s with under a million dollars because they have committed to an extremely frugal lifestyle. The less money you can survive on, the earlier you can retire. In fact, the major reason why people do not retire early is not because they don’t make enough money, but because they are too connected to a high-cost of living.
Save Early – While I have talked about this already, saving money when your young will go a long way because of compound interest and time working hard to build up your nest egg. Ever year you delay in saving aggressively means a longer time until you can pull the plug. If you start while you are young, you will be ahead of the game and live a life without regret. No one ever regrets saving too much money in their 20′s.
Make Extra Money – Find ways to bring in a little extra cash can be a great way to save more aggressively for retirement. While it may be difficult at times to climb the corporate ladder and get promotion after promotion, there are many ways that people can earn a little more from side ventures. Even a few hundred dollars a month can equate to thousands of dollars each year in your retirement fund.
Work a Part-time Job – Many people hesitate to retire because they can’t afford it fully or they are not confident that they can afford it. By choosing to retire and work a part-time job for a couple years, you can enjoy a little more freedom while not giving up a major source of income completely. Sometimes it only takes a few baby steps to give yourself the confidence that you can survive financially.
While these ideas may seem really basic, there is no secret to retiring early. It takes the vision to understand what it takes to accomplish your goal and the discipline to carry it out. If you work on cutting your expenses, increasing your income, and aggressively saving for retirement, you will be surprised at how early you can retire. Early retirement doesn’t have to be just a dream.
What are you doing to retire early?
Personally I am trying to save 20% or more of my after tax income.
I do not really believe in side income, unless it is aligned with a joy. The trouble I see that yes I can work hard and make more money. But there will be no chance for second life.
I know many people who do not retire and keep working 12 hrs a day – just because it is the only thing they do know.
They are not relevant in any other place outside their day-to day job. However this is a way too, as they live very frugal – no interests, no expenses, only work : -)
I am working on the first three of the four. Starting my blog could be considered a part time job though so maybe I’m doing four of four. I don’t know if I want to retire early or not but having the option would be nice
I’m there! Both of us were retired by 60 (which is earlier than we thought!).
Here’s another tip, pick a job that has a pension (lol)!
Many people just seem to ignore the fact that it really is possible to retire early. Maybe they do it because they don’t think it’s possible or they don’t want to put in the extra effort to make it happen.
If we inherent money from our family we can retire early. I think starting a business also can support our lives after retire.