Retiring when you are young and healthy enough to enjoy life is a goal some people set for themselves. But a tumultuous stock market and uncertainty about the social security program can leave middle-aged adults fearful for their financial future. Many wonder if they’ll ever be able to retire, let alone take an early retirement.
Experts say having a solid strategy is the key to retiring early.
How to Retire Early
If the idea of retiring before the age of 65 is your goal, here are a few ideas to help make that dream a reality:
Start living below your means:
Since you can’t start collecting even a portion of your social security benefits until the age of 62, retiring early means relying on your savings. Financial advisors say people in their 20s and 30s should be saving ten to fifteen percent of their income. But if you are hoping to retire before sixty, it’s time to cut back on spending and increase savings. Pay yourself first by putting twenty percent of your income into a retirement savings account. Then find a way to adjust your budget to pay off your debt and not incur more.
Consider freelance work:
If you are someone who spent a lifetime punching a time clock, what you might be craving is freedom and flexibility. You may be able to find freelance work so you can stretch your retirement savings further while also creating your own schedule. For example, if you have a green thumb, you might contract with local nurseries regarding the care of their plants or help older adults tend to their gardens. Turning a hobby in to an income-generating activity can help you thrive during retirement.
Downsize your home:
Another retirement strategy might be to sell your home and move to something smaller, maybe even in a less expensive area of town. Often families buy a home in a suburb where schools are excellent when the kids are young. This usually comes with a high property tax rate. After the kids are grown and gone, however, you can save money by downsizing. A smaller home usually means lower utility expenses, less expensive homeowner’s insurance, and fewer maintenance costs. By downsizing before you retire, you’ll save yourself time and money down the road.
Create a mock-retirement budget:
While you might be on track to pay off your mortgage before you take an early retirement, you’ll still have other household bills to pay. You’ll need to pay for health care insurance, car payments, car insurance, groceries, personal care, and more. Sit down and put pen to paper to project how much your monthly expenses will be. Compare that to your savings, projected social security, and all other sources of income. It’s the best way to determine what age you can realistically hope to retire.
Many people are surprised to learn how affordable retirement communities can be. From meals to transportation, costs are usually bundled in one monthly fee. This helps make retirement budgeting a little easier. Call 888-514-6461 to speak with one of our local care advisors for free today!
Photo by Harli Marten on Unsplash