Early retirement is the epitome of living the dream. You’ve clocked endless hours sprinting toward the finish line, and retiring ahead of the pack is the payoff for all your blood, sweat, and tears in the office. It’s within your reach when you play your cards right. More than ever, people are easing into retirement long before the median age of 62 years; and with a little planning, you can, too.

8 Effective Ways You Could Achieve Early Retirement

1. Map Out Your Retirement Objectives

What does retirement mean to you? Do you see yourself living lavishly on an exotic beach somewhere never again to check an email? Do you want the freedom to do whatever you want? Do you have a side hustle that’s speaking to your soul? There are no wrong answers here, but your answer is crucial to your planning process.

This first step to achieve retirement early is essential and will take time to develop. Get clear on what you intend to do with your time and how much money you’ll need for debts you need to pay and planning for the unexpected. Once you have a good idea of what your day-to-day life will look like post-retirement, you are far better prepared to put those plans into action.

2. Do the Math

After establishing a roadmap for your financial future, it’s time to bring your visualizations into the real world with mathematical calculations. First, tally your net worth or total financial standing, including assets and investments minus debts.

Once you’ve found a solid figure, calculate and compare it to your annual spending. Most banks and credit card accounts offer a yearly spending breakdown that can help you get the most accurate numbers. Using a spending tracker app can provide further clarification on where your money goes.

Find out how much your net worth is and compare it to your spending to gain a clearer picture of the amount of wealth you need to accumulate for retirement. Most financial planners agree that having at around 70 to 80 percent of your yearly salary per year is necessary for retirement. Other experts live by the rule of 25 that urges you to have 25 times your planned annual salary at the onset of retirement.

3. Meet With an Expert

No matter your aptitudes, it’s easy not to see the forest for the trees when planning for retirement. We always recommend meeting with a professional financial advisor to get your ducks in a row. Retirement presents multi-faceted changes that often pose conditions that many people forget about in the initial planning phase.

A financial advisor helps illuminate all those murky corners where unexpected expenses lurk, like health insurance. Many aspiring retirees find that meeting with a professional in the industry helps them create manageable expectations and achievable goals. These meetings can also be quite comforting when you want external confirmation that you’re on the right track.

4. Ramp Up Retirement Accounts

Ask anyone who has retired early, and they will all tell you they couldn’t have gotten there without savings. Most employers offering a retirement plan do some level of contribution matching. If you don’t already see the value of this “free” money, it’s time to step up your game.

Retirement plans, 401K, or IRAs offered by your employer have significant growth potential. Any funds siphoned into these accounts are tax-deductible.

5. Scale Back

Getting serious about retirement is often a reality check on how you’ve been living, no matter your age. The abstract notion of retirement as a “possible” event in an unforeseeable future doesn’t provide an incentive for spending boundaries. When retirement becomes a practical, tangible aim in your life, you will naturally assess where your money’s going.

You’ll likely start taking the time to consider your needs versus wants. Resist the urge to skip this step because it’s paramount for budgeting. Spending more than you make won’t put you on a realistic retirement track. To get on the path to total financial freedom in retirement: live below your means.

The most successful FIRE early retirees spend 25 to 50 percent while saving the rest. The sooner you save, the less frugal you must be in your retirement days.

6. Level Up

Escaping the grind doesn’t mean never channeling cash back into your accounts. Even if you’re set from your primary source of income, it never hurts to have other lucrative irons in the fire.

One proven way toward your goal of retirement is to set up as many forms of income (passive and active) as possible. Investing in real estate, side hustles, and passion projects help keep your bank account swelling with potential.

Choosing additional, inspiring money-making opportunities has a two-fold reward. You’ll make money on the side while letting off steam caused by more tiring career pursuits.

7. Nix High-Interest Debt

Don’t fall into the trap of thinking you need to keep your debt steady to maintain a good credit score in retirement. Mortgages and other high-interest debt should be the first thing to pay off when considering your early escape from the 9 to 5.

Retirement is all about clearing mental space so you can do your thing. Having the weight of debt can drag you down and make you less likely to bask in the glow of your newfound freedom.

8. Invest Wisely

Smart investments are an early retiree’s golden goose. Investigate the best returns, long-term growth potential, and how to diversify your portfolio for maximum gain. Take a few risks while saving, because you’ll probably move your funds to more stable waters once retirement hits. Riskier investments can bring maximum returns; just make sure to reinvest your gains.

Always keep your funds in the highest interest account to accumulate money passively. Although it may seem like a burden to shift cash as needed, it’ll pay off in the long run.

Make It Happen

Early retirement isn’t something that will fall in your lap; it requires time, planning, and foresight. You’ve worked hard to get to where you are right now in your career. Applying that same drive and focus will serve you well in reaching retirement early. Each journey begins with one step, and you are now on the path to living life on your own time.

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