For most people, retirement is a milestone for their 60s or 70s. Obviously, the longer they stay in the workforce, the better it is for them. And most financial planners will advise you the same: stay in the workforce for as long as you can.
But, what about those who don’t want to work for that long? Surely there must be people who retire in their 40s and 50s, too.
So, this one goes out to such people. We’ve gathered tips from financial experts on how to plan and save smartly to retire earlier. Let’s get into it.
1. Take Advantage of Employee Benefits
Most people enter their 30s regretting not benefiting from company-offered benefits. If your employer offers contributions to financial accounts such as the student loan pay-down assistance, 401(k), or HSA, you’d best hurry to cash in those offers.
2. Be Ruthless With Expense Management
This needs to be your primary financial goal. That means it dictates every aspect of your spending. One of the things about retiring early is keeping close tabs on household expenses, both pre and post-retirement. Now, this doesn’t mean you’re all up in your bank app all day every day. But, you need to inspect every new fee that comes your way. Besides that, you need to maintain a strict budget and make sure that you stay on track.
3. Save Your Pay Raises
Your raises and bonuses need to be part of your retirement growth strategy, says SoFi senior manager of financial planning Brian Walsh. The financial planner stressed that younger workers especially should commit to saving as many of their bonuses and raises as possible. Your lifestyle expenses are bound to change over time, which will definitely affect your retirement savings too. By saving most of your raise, you’ll achieve two key benefits: the first is obviously saving money, which can be invested and left to swell over time. The second benefit is that you slow down the growth of your expenses.
Wrapping It Up
Maintaining financial discipline can be very difficult – but, with your goal in mind to guide you throughout your journey, and the prospects of getting to retire early will surely help you get by successfully. Good luck!