Tips for Retiring Early

Do you want to take charge of your finances and retire well before you’ve reached 65? If so, you should consider saving early, building wealth and eliminating as much debt as possible. There are many approaches you may take to help you gain financial freedom and ensure you are prepared for your retirement at the age you wish to retire. Below are a few methods that may help you achieve your retirement and investing goals.

What does financial independence mean to you?

You should consider your financial goals and what retirement means for you. For some, when they retire, they don’t want to work at all and want to spend their time travelling, starting new hobbies, or spending more time with family. For others, this could mean working a less-stressful part-time job, starting their own business, or becoming involved in more charitable work.

Understanding your goals, values, what motivates you to become financially independent, and what age you want to retire is the most important part of your plan. It will help you create your strategy and focus on what matters most for you. The Retirement Calculator may help you understand how much you will need to save based on when you wish to retire, and how much yearly income you think you’ll need to live the way you want. You can get an estimate of the annual income by putting together a budget.

Make saving and investing a priority

If your goal is to retire early, you need to consider saving early too. The earlier you can save and invest, the more growth potential you have. You won’t have to put so much back all at once if you start saving earlier, so it may not seem as overwhelming as it would if you waited.

One way to start is by participating in an employer offered tax-advantaged retirement savings plan and taking advantage of any matching program your employer may have in place. With a match program, your employer contributes a certain amount to your retirement savings plan based on the amount you contribute potentially providing you with more savings.

Use Multiple Savings Options

While employer-sponsored voluntary retirement plans are a great place to start, you should continue to educate yourself on different investment options to customize your plan. Learn more about retirement savings, Individual Retirement Accounts (IRAs), using a Health Savings Account (HSA), and buying life insurance plans that can grow a cash value.

This blog is up to date as of March 2022 and has not been updated for changes in the law, administration or current events.