When we start our working life, the thought of retirement never crosses our minds. It’s something that “might” happen in decades, and for the interim, we are just concerned about our current pay packet.
Of course, as things start to progress, more of us do start to think about retirement and the financial implications. We start to realize that the average retirement age isn’t getting lower – it’s only on the rise. Suffice to say, many of us don’t want to be working into our 70s, we want to enjoy our final years away from the workplace.
This is the reason we have written today’s article. We are now going to take a look at four habits that you simply must tap into if you are serious about retiring early.
Tip #1 – Always have one eye on the future
Admittedly, this first point is going to be difficult to follow during your early working life. However, as time progresses, try to always have one eye on the future. For example, you may have your sights set on a brand-new car, but in reality, you need to be questioning yourself if your finances allow this. Let’s not forget that luxuries like cars only depreciate in value, and aren’t going to benefit your early retirement plan in the slightest.
Tip #2 – Understand your future costs
Similarly, make sure you understand what costs you will have to factor into your early retirement. You may have paid off your mortgage, which is fantastic, but what about everything else? Unfortunately, now might be the time to think about elderly care, pre-paying for a funeral and some of the other topics that many of us wish to avoid.
You may also have to think about just how much your children may cost you in the future and build this into your retirement plan. After all, more and more parents need to help their children out in relation to the housing ladder, and this is something that could set your retirement plan back years if you don’t consider it early enough.
Tip #3 – Live within your means
In some ways, this next tip links very closely to the first one we looked at. Let’s return to the car example again; it might be your ultimate dream to buy a brand-new car, but is it really within your means?
Particularly with finance offers now being so prominent, more and more people are turning to luxuries that their income really can’t justify. Even if you are managing to just about clear your debts, remember that you still need to account for savings if you are serious about funding an early retirement.
Tip #4 – Make your money work for you
We’ve just touched upon savings, and in some ways, this is what this final tip will look at. Many of us will go to work, pick up our pay packet, spend, and repeat the process for the rest of our life.
Wealthy people, on the other hand, will make their money work for them – rather than the other way around. They will learn to invest some of their pay packets so that their savings are increasing without them putting in any more hours. Learn about low-risk investments, and you may see your retirement age plummet.