Just about anyone can retire early with disciplined and meticulous planning. While the road to retirement may be difficult, at least it isn’t impossible. Even if there doesn’t exist a foolproof solution to ensure it happens, there are ways to get you there faster. The following are some proven strategies to help you retire earlier than you think.
Decide what your ideal retirement lifestyle is
Think about what you want to spend your time on during retirement. Perhaps you want to live out your days in an independent senior living facility or maybe you want to travel the world. Your budget and saving habits should reflect what your ideal retirement lifestyle is. For bigger, bolder aspirations that require a large sum of money to carry out, you should have a strict saving habit and a generous budget to fulfill. Don’t forget to account for healthcare, taxes, and various miscellaneous expenses when determining your retirement spending.
Invest what you save
Let your money work for you by investing it in the stock market, rather than letting it sit and collect dust in your savings account. The sooner you start, the better. When you’re young, your investments should mostly be in areas of growth. The older you get, the more conservative your investments should become. If you aren’t well-versed in matters of investment, you’ll need to hire a financial planner to help you sort out your portfolio.
Hire a financial advisor
Investing has a steep learning curve, and you’ll need a reputable financial advisor to guide you through the process. These professionals can assist you in developing a financial strategy that works for our specific retirement goals. They’ll also be able to help maximize your investments and income streams to make sure you’re getting the most out of your financial choices. Make sure to shop around for an advisor who understands your needs and preferences, since you’ll most likely have to keep them around for years to come.
Live within your budget
After figuring out your ultimate retirement goal, you’ll need to create a budget that allows you to reach these goals and stick with it. This budget should force you to live below your means so that you can save money more aggressively. The first step to take is to make a list of your current expenditures and zero in on the most unnecessary expenses as well as the biggest ones. The biggest expenditures should be significantly reduced, while the unnecessary ones should be cut completely.
Max out your annual retirement contributions
When it comes to your 401(k) and IRA, the best thing to do with them would be to max them out as early as possible. Maxing out your 401(k) involves reaching the annual IRS limit for pre-tax contributions which is currently at $19,500 if you’re aged 49 or younger. Meanwhile, the maximum limit for individuals aged 50 years or older is $26,000. The reason that this is beneficial to your financial goals is that it allows you to maximize the amount you can potentially earn all while minimizing tax liabilities.
These practical tips will help you make the most of your financial retirement goals. With just a little discipline and forward-thinking, you can retire earlier than you think.