How to Retire Early with Zero Regrets and Extra Cash for Life

Depending on who you ask, early retirement has different definitions. Generally, any time before your 62nd birthday when you are eligible to draw Social Security benefits. Recent years have seen…

Depending on who you ask, early retirement has different definitions. Generally, any time before your 62nd birthday when you are eligible to draw Social Security benefits. Recent years have seen the growth of the “Financial Independence, Retire Early” or FIRE movement , which encourages people to retire even in their 30s and 40s. Many Americans do not know how much they will need to save for retiremen t, which poses a challenge. However, many people can achieve early retirement with dedication and planning. To find out if you can retire early, here’s an overview on how you can make that dream a reality. What is Early Retirement?

Traditionally, early retirement was defined as retiring at age 60 as opposed to 65. Even though this is technically true, the notion of early retirement has evolved.

Taking early retirement doesn’t mean you’re completely done working. Instead, you work because you want to. In other words, you have the financial freedom to do whatever you please.

Early retirement is possible for people as early as their 30s or 40s. The majority of these people, however, also work in some way, often on their passion projects or some other activity.

To put that more succinctly, those who work this way work purely for their own sake, not as a necessity.

Remember that work can provide us with meaning, purpose, and fulfillment. Moreover, some studies suggest that people who retire early and do not work at all may die earlier than people who continue to work.

On the flipside, retiring early allows you to pursue hobbies or spend more time with friends and family. You can also launch your own business. Or, maybe you’re just fed up with the rat race.

It is therefore not the goal for many to stop working altogether. The goal is to be free to choose whatever you want to do. How to Retire Early

If you want to retire early, there are a lot of factors to consider. But, here’s a blueprint you can refer to to get started. Get the foundation in place.

Want to retire early? You first need to posses the right mindset. And, you’ll also need a financial plan in place — ideally as soon as you’re kicking off your career. Take your savings strategy to the next level.

It’s crucial to change your attitude towards money if you’re serious about retiring early. And, to get started, a conscious tradeoff must be made whenever money is spent.

More specifically, a little belt-tightening won’t do the trick — despite popular opinion. Rather than swearing off your daily latte, the key is cutting back on high-cost expenditures. So, while making your coffee at home can help you stick to a budget, it’s also not going to make early retirement possible.

To put it simply, you should live well below your means . As result, you’ll be able to stash away a large part of your earnings.

How much should you be saving? Financial planners advise aiming for 30% of one’s earnings over a typical 40-year career instead of 10% to 15%.

That may sound like an unachievable goal. But, it’s possible if you automating your savings so that you don’t spend it. Also, whenever you come across a windfall of cash, think bonuses or tax refunds, contribute these funds to your nest egg. Do not succumb to lifestyle creep.

If you get a huge raise or promotion, you know you should treat yourself. But as you earn more, there’s a natural tendency to spend more. Financial advisors call this “lifestyle creep.” Again, setting up an automatic deduction from your paycheck or a bank transfer can ensure that you save half of those additional dollars.

At the same time, it’s important to spend your dollars carefully without feeling restricted. For example, you can still travel after researching the best deals or finding ways to reduce your spending. Maybe you could visit a friend or family member and stay with them for a couple of days instead of booking a hotel room.

Again, just because you “retire” doesn’t mean that you’re no longer working. You could work part-time or maybe start a side hustle. This way you’ll have more free time while still having an income stream . Spend less on housing. Your greatest expense, and therefore greatest opportunity for saving, is probably your house. In fact, the average American’s housing […]

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