Retiring at 50 is a rare accomplishment today, but it’s not completely impossible. If you start early and seriously dedicate yourself to the task at hand, you could be out of the rat race and on to more exciting pursuits early on. These tips will show you how.
Live as Frugally as Possible
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One of the easiest ways to maximize your income is simply to cut your expenses. Think carefully about each buy and decide whether that item is more important to you than your early retirement goal. You may have to live a radically different lifestyle now, but this will allow you to retire radically early later on. Every bit helps. If you grab fast food for dinner once a week at the cost of $20 per meal for the family, this adds up to $1,040 a year. Cut back anywhere you can to maximize your potential retirement savings.
Put Down Roots
Moving is an expensive prospect any way you look at it. Aside from the cost of the home itself, you also need to set up utilities, rent a moving truck, and potentially make improvements like painting the walls and landscaping the lawn. Get settled in a home you can steadily pay off and you’ll free up lots of money for your retirement. If you pay off your home, you’ll also lower your living expenses when you reach retirement.
Decide How Much You Need to Retire
Most retirement calculators recommend having $50,000 a year through retirement. If you’re accustomed to living on much less, you can retire sooner. Be honest with yourself about the type of lifestyle you want to have, though. Don’t force yourself into a miserable meager retirement when a few more years on the job could help you earn a more satisfying retirement.
Invest as Much as You Can
Invest up to the maximum allowable amount in retirement funds like your IRA or 401(K). After you’ve funded these, put as much as you can into a diverse portfolio of stocks and bonds. Follow experts like Forbes Contributor Fisher Investments for advice on the best strategies. Make the most of your liquid assets as well by keeping them in accounts that earn interest. You can’t invest every penny or you’ll have nothing left for emergencies or regular expenses. Keep this money in high-interest savings accounts or CDs where it’s accessible but still working for you.
Consider Additional Sources of Income
Maximize your earnings during your working life by seeking out as many revenue streams as possible. If you’re an expert in your industry, you can often earn a little extra money on the side by blogging. If you unwind in the evening by doing some woodworking in your shop, consider selling your handmade pieces at craft fairs or on the Internet. You may even find a lucrative hobby that you want to continue during your retirement for an extra stream of fun money.
Early retirement is a challenge, but it’s not impossible when you’re dedicated to your goal and willing to do what you have to do in order to get there.