Early retirement planning is the best way to get a jump start on your retirement dream. Retiring early means you get to do more of the things in life that you were unable to do while working a full time job.
However, an early retirement is not as easy as simply quitting your job and walking out of your workplace. When you retire early, you cut back on the money you might still be able to save and use during your retirement years. Furthermore, you do not get the full social security benefit you deserve. You will lose a part of the income that will sustain you during your retirement years.
The good news is, it does not necessarily follow that you won’t have enough money to sustain your lifestyle if you retire early. By doing retirement planning carefully, you can come up with various alternative income sources that would fill up the void that early retirement has left you with. Early retirement planning is not a difficult thing to do. The following steps will help you on your own planning:
Begin by imagining how you want to live your life during your retirement. Break it down in terms of their monetary cost. You can use a retirement expense calculator to help you arrive with an estimated cost of your retirement expenses. Think not only of the short-term expenses that you will incur but also long-term expenses such as those involved in maintaining your health.
Since you are beginning your early retirement planning, think of how much you will have to save from your present income in order to recover the retirement income that is lost by retiring early. By retiring early it does not mean that you lose all you chances of earning money. There are alternative income generating sources you can get into that still allows you to relax during your retirement years.
While you are still employed, reserve a part of your income for retirement. By doing this regularly every pay day, you will build quite a reserve over a period of time. However, you should practice to not touch your retirement account prematurely.
Over time, your retirement savings and alternative income sources should give you enough to retire early. Once you have gone into retirement, the work you did planning for retirement earlier should prepare you to manage your retirement income wisely. You can still enjoy your retirement living in modest lifestyle instead of a grand one.
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