How to Retire Sooner Than You Thought Possible

Written by , March 11, 2011

How to Retire Sooner Than You Thought PossibleEarly retirement is a dream for many workers. Unfortunately, it becomes a reality for relatively few. Unless you start planning for early retirement at a young age, achieving it will be extremely difficult. And unless you win the lottery or create the next Facebook or Google, it won’t be easy under any circumstances.

If you really want to retire while you’ve still got plenty of time to enjoy it, it can be done. But it will take lots of hard work and dedication. Here are some steps that can help show you how to do it. There’s certainly no guarantee of an early retirement, but following one or more of these steps can increase your chances of getting there.

Here is advice on how to accelerate your retirement.

  • Live Well Below Your Means. Drive a used car, or don’t drive at all. Live in an apartment or purchase a modest home. Cook for yourself instead of dining out. Avoid expensive vices like smoking and drinking. Travel only when absolutely necessary. If you cut your expenses as much as possible, it will leave you with more money to put toward your retirement.
  • Put off Having a Family. Kids are expensive, and if you want to retire early, you’ll have to concentrate on putting away money for yourself. Even marriage may have to wait, unless you find a partner who is just as committed to retiring early as you are.
  • Find a High-Paying Job. Banking and sales are two potentially lucrative options. While such occupations may be far from your dream job, remember that the idea is to work hard for a decade or two and then enjoy the freedom to do as you please.
  • If You Have Credit Cards, Pay Them off as Quickly as Possible. Then charge no more than you can pay in full each month to avoid interest charges.
  • Contribute as Much as Possible to Retirement Funds. Most employers will match your 401K contributions up to a certain percentage of your pay, and that puts that much more toward your nest egg. But don’t stop there. Open your own retirement account and contribute as much as you can possibly afford to it as well.
  • Invest Wisely. The goal is to minimize your risk while maximizing your returns. That’s not always easy to do, so you’ll need to do your homework. While an investment professional can help, the money you’ll pay in fees and commissions is money that won’t be going toward your retirement. So if you can find the time, learn as much as possible about investing and put it to use.
  • If you want a family, a job you look forward to going to every day, and the freedom to splurge on the things you enjoy, you may be better off waiting on retirement. But for those who dream of a life with fewer responsibilities, planning well and working hard now can pay off big when you’re retiring decades before your peers.

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