Extreme Early Retirement?
Early Retirement Extreme
Given an opportunity, many would like to retire early in life to fulfill their dreams of having a relaxed time on the beach or a leisurely walk through the woods. But very few are able to retire before fifty mainly for their inability to amass funds enough to lead a comfortable retired life without sacrificing much of their present living style. However, if one plans for early retirement there are quite a few ways to generate enough funds for the purpose. Here are some of those:
1. At the outset you need to assess how much money per year you would need to maintain your present style of living. However, don’t overlook the fact that the cost of living keeps going up with every passing year. Also note that you’ll be spending more for taking care of your health with the passing years.
2. You should start investing your savings smartly so that it grows and earns dividends for you. Look for low risk investments like pension funds or individual retirement accounts, social security benefits and long term deposits in bank.
3. Invest a part of your present income in mutual funds that offer tax-free income. Look for funds that charge no or low commissions and custodial fees.
4. Invest the maximum possible part of your current income in 401(k) and IRA accounts. These investments offer tax benefits. Let your money remain there for as long as you are working. Don’t be troubled of losing part of your money because of early retirement, as withdrawal fee of ten percent often gets waived off as you become 56 years old.
5. Put aside some money in money market accounts offering reasonably good rate of interest. It’s desirable to invest funds regularly in money market and investment funds. There are options that enable you to automatically transfer a pre-defined part of your income (10% recommended) to such funds.
6. Look for ways of increasing your income while still capable of putting in extra efforts. One option is to look for part-time jobs apart from your normal job. Try getting some extra work or a temporary job in your field of specialization. You may even look for some online jobs that allow you to work from within the comforts of your home.
7. You need to find ways of cutting down on your present lifestyle expenses. Prepare your monthly expenditure plan, including a list of all your monthly expenses. Keep a track of all expenses. This helps you to realize and cut down the not-so- necessary expenses. You can save substantial money by restricting the number of family outings, reducing your shopping trips and curtailing your entertainment budget. Find ways that help reducing energy and fuel bills. Wash the car yourself. All this can add up to a lot of money that can be suitably invested.
8. One really effective way that prepares you for early retirement is to shift your residence that is not as expensive as the present one. This helps deciding the most appropriate size for you and your family and the type of locality you can live in with the estimated budget.