How to plan for an early retirement

The retirement age is creeping up all of the time. While our grandmothers may have retired at 60, many people of our generation might still be working on their 70th birthday. The average age is rising too, but there’s no guarantee that you will still be in good health as you pass 80. None of us wants to slave away for 50+ years only to spend our retirement sat in a chair, old, tired and unable to enjoy ourselves. The best way to make the most of retirement is to do it earlier. Wouldn’t you love to retire in your 50s, when you are still relatively young, fit, healthy and able to have fun?

Unfortunately, it’s not that simple. Without a state pension until your late 60s, anything before then will need to be self-funded. If you are going to live without a salary or any state support for an extra decade or two, you need to start planning now.

Make a Realistic Plan

In the ideal world, you might retire in your early 40s. You might even be able to create a savings plan that will make this possible. But, ask yourself if it’s realistic. Be realistic about what you need to spend, how hard you are willing to work, and what you are willing to give up. Make sure your retirement plans are realistic and attainable, or it’ll always be a pipedream.

Start Saving into a Pension

If you want to retire early, you need to start saving right now. High-interest savings accounts and investments are great, but when it comes to building a retirement fund, nothing beats a pension. For more information on pensions, get in touch with an FCA Regulated adviser, such as Portafina or visit Pension Wise. FCA regulated advisers can help you make the right decisions to move towards your early retirement goals.

Avoid Debts

The enemy of early retirement is debt. Most of us spend our 20s getting into debt, and then our 30s, 40s and even 50s paying it off. Debts can mean that people approaching retirement still have mortgages to pay off, and debts can significantly limit your available cash and the amount that you can save. Debts are a waste of money that you can’t afford if you want to retire early. So, buy only what you can afford.

Be Savvy with Your Money

There are so many simple ways to save money. Get into good habits by comparing costs, switching to cheaper providers and cancelling contracts that you don’t use.

Be Prepared to Make Sacrifices

Your friends might be jetting off around the world, buying designer clothes and renting luxury apartments. If you want to retire early, you need to be prepared to miss out on some of this. You need to be ready to live modestly now to reap the rewards in the future.