How Do I Retire Early?
Like most people, you have probably dreamed of spending more time on your hobbies or with family and friends, or even just sleeping in late. The freedom that retirement provides is what many folks are working towards. Now imagine instead of waiting until a ripe, old age to relax and attain that freedom, you could enjoy your time however you please while you are still young enough to be active and adventurous. The only way to have a chance at an early retirement is through strategic retirement planning, often under the guidance of retirement financial advisors like the experts at Firma Financial Planning. Here are some necessary steps towards financial freedom that anyone should prioritize.
Have a Plan
Decide what age you want to retire at and then set it as a solid goal is a powerful way to self-motivate and make sure all your actions are directed towards reaching your goal. Often, people do not think about when they want to retire and simply assume it will happen someday. When you set a deadline for your retirement, it will allow you and your team of retirement planners to determine milestones and actions you’ll need to take to hit your goal.
Reevaluate Your Budget
While increasing income would be nice, usually the quickest way to save more money for retirement is by reducing expenses. Eliminating services and subscriptions is a quick way to save potentially hundreds of dollars each month. If you do not have a household budget yet, now is the time to start. Retirement planning is a long game, requiring a lot of moving pieces to line up in order to ensure you are saving enough annually to reach your goal. Reducing expenses is also a good exercise to help determine how much money you will need in order to retire. Some lifestyles require a lot more savings in order to sustain it once you stop working full-time, but by reducing expenses now and long-term, you can have a lifestyle that will be easier to fund while you enjoy your freedom.
Pay Yourself First
The idea of “pay yourself first” can shift your thinking and allow for a lot more saving. Boiled down, paying yourself first involves putting money into your savings account or another retirement vehicle like a 401k or IRA first, before allotting money towards anything else. Instead of spending money and saving what is left, you save money and spend what’s left. This is even more powerful in conjunction with a budget, but even on its own can revolutionize your saving habits and lead to healthier wealth creation. Most people work to support themselves and their family, but by paying “others” first through bills or purchases, they end up forgetting that. Paying yourself first can also be very motivating since you will quickly see the investment in your future and how it is now your number one priority.
Work With an Expert and Start Today
Savings and debt are both compounded by time, so it is important to begin your journey towards early retirement as soon as possible. The same dollar you save now will be worth far less if you save it in 10 years due to all the interest it could earn in that time. Whether you are 25 or 55, the importance of saving more today is the key to your retirement.The landscape of personal finance and investment is constantly changing and can be overwhelming for many people, which is why partnering with an established team of retirement planners like Firma Financial Planning can set even people with no previous knowledge up for success. If you want to retire while you are still young enough to enjoy it, the time to take action is right now.