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15 Financial Tips to Retire Early and Happily

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financial tips to retire early

Do you dream of traveling around some of your favorite countries after you retire early and happily? Do you too want to be free from the financial burdens retirement brings with itself? If so, you’ll have to take care of some important things before you catch up on your retirement plans.

Most of the people want to run away from the stress work-life throws at them. They daydream about moving to a beautiful place with their loved ones and just enjoy life. The truth is, it’s easier said than done. But if you follow the 15 tips mentioned below, you might just turn your dream into a reality. So, we are going to delve into these key financial tips to retire early and happy.

1. Reduce Your Cost of Living 

If you can manage to lower your everyday spending and overall cost of living, you will be able to save more. This will allow you to retire early without any financial worries for your life after retirement.

This might require you to cut down on some of your favorite things. For example, you might need to stop having lunch at your favorite restaurant and stop buying expensive clothes. But small sacrifices like these will make a big difference in the end.

Are you willing to give up on stuff like this? If yes, then Congratulations. You are a step closer to retiring early and happily.

2. Estimate the Money You Will Need after Retirement

It is essential to plan ahead. As someone rightly said, “Planning ahead will keep you ahead in life.”

Knowing all about your “numbers” is the key. This means you should have a pretty good estimate of how much money you will need to bear your retirement expenses.

This will allow you to plan everything beforehand and accordingly. You will know exactly how much you should save and at what pace.

3. Avoid Debts

Debts are something that will make your life very difficult. It will drown you in the waters of unnecessary troubles.

 They will vandalize your early retirement plans like nothing else. Hence, you should avoid them at any nonmonetary cost.

Debt is a habit hard to get rid of. You sometimes feel like it’s no big deal. But the truth is, it makes a huge difference. Debts block your cash flows and reduce the amount of money you are able to save. This, in return, disrupts your planned “numbers” for the future.

4. Avoid Buying Things That Will Own You

We sometimes are attracted to luxurious things that might turn into a liability. For example, owning an expensive car brings its own expenses with it. Luxurious cars are very costly to maintain: something you do not want while planning to retire early.

Once you are addicted to expensive stuff, it’s tough to downgrade yourself to less expensive things. But if early and happy retirement is something you are looking for, you have to take this hard step.

Don’t make the mistake of turning your assets into your liabilities!

5. Have Multiple Sources of Income

If you feel like you might not reach your set goal of money before you retire, you may need to find more income sources.

There are many ways to increase your income. One way could be to find a part-time job or start some online business. You can also work on some special skills that you might have and work as a freelancer.

These measures will not only help you save more but will make you financially secure. But you have to make sure that all the income from the side hustle goes to your savings and not somewhere else.

6. Find a Financial Advisor

Having someone who can advise you on your finances can be very useful. If finance is not one of your expertise, hire someone. It will make the process towards retiring early a lot easier for you.

With the help of your advisor, you can plan everything well in advance. You can then set small goals to financially reach where you intend to be before you retire.

This will not only help you keep track of your progress but also help you make any realistic changes to your plan during the journey.

7. Invest Strategically

Investing is essential if you want your money to grow. But most of us don’t want to go down that road because we want to keep our money under our beds. Don’t make that mistake.

Yes, you have worked hard for the money you have accumulated, but you can benefit a lot if you invest your money in the right place. That is where strategic investing comes in. You can always go to your financial advisor and discuss your options with them.

Remember that investing has some risks associated with it. Hence, it’s never a good idea to put all your eggs in a single basket. Diversify your investment to give your money the best chance to grow.

8. Learn Money Management

One of the most useful skills you can develop in life is money management. Knowing exactly what to do with your cash is an art not many people are familiar with.

Some people feel like they are owned by their money. They are too afraid to invest it or even spend it.

If this sounds like you, your first course of action should be to step out of your comfort zone and take charge. Put aside your fears and own your cash!

One effective way could be to list down all the possible ways you could manage your money in. Then narrow them down and choose the best options after consulting your financial advisor or someone good with money.

9.  Don’t Get Eaten Up By Taxes

Most of the money we save for our retirement is not tax-free. This means that we will have to pay taxes upon withdrawals of cash from the funds of our retirement plans.

This scenario can be tackled through some strategic measures, especially in the early stages of your retirement life. If you continue to work part-time or earn money from another source, you won’t need to withdraw money from your retirement funds. Hence, you will be able to defer taxes on your retirement funds.

10. Have a Well-stocked Emergency Fund

You will face many essential unexpected emergencies in life that will appear completely out of the blue. It is thus necessary for you to have a separate fund to deal with situations like these.

Retirement won’t put a full stop to emergencies. You will still need to spend money on the things you didn’t plan to before retiring.

If you have an emergency fund, you won’t need to withdraw cash from your retirement funds.

11. Continue Learning

The worst mistake you can make is to stop learning. Retiring early can be helpful in so many different ways given that you use your time efficiently and effectively.

To be honest, we miss out on a lot during our working days. We could learn so much more but never get the time for it. With early retirement, you will have all the time in the world to catch up.

Wanted to learn tennis but never really had the time? What about that video editing software you have always wanted to master? Don’t worry! You can divert all your attention towards it when you happily retire.

12. Prepare a List

We all have one thing in common: we have some sort of plans in our lives. But the problem is, we are too soaked up in our work lives that we are unable to accomplish other things we have planned.

Make a list of all the things you couldn’t achieve due to your work. This will give you a sense of comfort because you could actually try achieving your other goals after you retire. Writing them down will also allow you to prioritize some of the most important stuff in your life.

13. Take Care of Health Insurance

Health is an important factor to plan for before you retire. What’s your plan of action to get health insurance?

The truth is, getting health insurance can be a major roadblock towards retiring early and happily. The reason is that most people aren’t eligible for free healthcare unless they are above 60.

Your only option then is to buy health care coverage with your own money. That is why it is integral to have a rough idea of how much healthcare could possibly cost you.

14. Invest Some of Your Cash in Annuities

A lot of us have some kind of doubts when investing our hard-earned cash. We feel insecure when our options to invest aren’t safe and secure with high returns.

One way to deal with this problem could be to invest your money in annuities. This will have two benefits for you:

  1. Your initial investment will be secure.
  2. You will get a return on your investment.

But make sure the value of your investment doesn’t fall drastically when the stock market is disturbed.

15. Have an Active Social Life

We make most of our friends in our 20’s at our workplace. After you retire, you might not get the chance to meet your workplace friends more often. This may hinder your social life.

You will be happy after you retire if you know you have people you can rely upon. It’s always a good feeling when you have someone who cares about you.

It is thus necessary to have a group of true friends that can support you at your worst and celebrate with you at your best. Strive to make long-term friendships. After you retire, you’ll have plenty of time to work on your social life that will ultimately bring you happiness. 

Final Say on These Tips to Retire Early

And there you have it, 15 powerful financial tips to help you retire early and happily. If you follow these tips, there is no doubt that you’ll be in a secure position to retire early and happily, especially if you plan everything beforehand and methodically progress forward from there. Remember, all your problems are a separate discrete concerns. The real bear is to take care of each them so you can actually achieve your goal of early retirement.

So, don’t give up! Plan out everything, take one step at a time, and before you know it, you’ll be kicking your feet up, happily retired in a lawn chair.

Till next time,

STRIVE


Achieving financial freedom doesn’t just magically happen. Achieving it requires a plan. So, if you truly want to retire early some day, create your plan and strive until you arrive.

Jason Zhang is the founder of Emoovio. He loves to write his experiences and insights on topics related to motivation, business, lifestyle, and travel. His mission is to inspire as many people as possible and help readers to improve their own lives. His collection of motivation quotes will help you to see failure and success in a different perspective.

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