The Young Professional’s Guide to Retiring Early
It would be a dream to retire before you’re 40 and spend the rest of your life traveling or relaxing at home. But for most people, retiring this early is impossible because they have plenty of debt and not enough savings yet. What’s more, a lot of them only realize how bad their financial health when years have passed and they can’t do anything else but work.
Of course, achieving financial independence isn’t impossible even when you’re already in your 40s or 50s. It’s just easier to start your journey there at a younger age. Below, we’ll show you a step-by-step guide on how you can retire in 10 years or less.
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Visualize your dream retirement
For many, retirement means never having to work again. It’s all just traveling and spoiling your family. For some, though, retirement means never having to work to live. They may still want to work, but they don’t need it, so they focus on non-income producing hobbies. Whichever retirement lifestyle you wish you had, envisioning it will help you in our next step.
Your retirement vision may include living in a retirement community for seniors, so it is wise to begin researching ones in your area of interest. If you live or want to retire in Utah for example, Starhaven Villas offers a community of luxury single-family homes starting in the low $600s. You can select an available lot, and choose from a variety of home designs. This community contains many amenities and leisure facilities, and is located within close proximity to the state’s lake and mountains, making it a perfect choice for those who want to relax and retire surrounded by beautiful nature with opportunities to explore.
Estimate your retirement expenses
You can’t start saving for your retirement without knowing your target amount. You need to estimate the cost of your needs when you retire. It can be a monthly budget, which includes your basic needs and insurance premiums, as well as miscellaneous expenses. Then you can adjust the budget as you grow older and need to spend on other needs. Also, if you estimate that you’ll still be paying debts by the time you retire, make sure to include these payments into your budget.
Work to grow your career
Your career is your largest asset and it’s probably the biggest source of your savings. But your paycheck when you’re 25 shouldn’t be the same when you’re 30, otherwise, your savings are going to go stagnant. If you want to retire early, hustling for a few years- and educating yourself- to drive career growth is the way to go.
Invest immediately
If you want to retire early, it’s not enough to just save your money; it’s better to invest it so it grows. And when it comes to investment, time is your biggest asset. So invest as early as possible and invest smartly. Fortunately, there are easy ways to invest, such as getting VUL or variable universal life insurance, which is life insurance with investment opportunities. You might need the help of a financial advisor, though, to make the best investment decisions.
Commit to making lifestyle changes
No matter how much you make, if you’re not committed to making some changes in your life, you might not reach your financial goals by the time you planned to retire. However, several actions can close the gap between where you are now financially and where you want to be. This includes getting out of debt completely, limiting or eliminating unnecessary expenses, and being consistent with saving.
Keep in mind that the road to retirement isn’t an easy one. It requires incredible discipline so you could save and invest as much as you can. But once you’re not beholden to a 9 to 5 job anymore and you’re free to live your life as you see fit, you’ll realize it’s all worth it.
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Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/
(Image) Pier by Hernan Pinera (CC by 2.0)