People are living longer. That means you need more money to live on once you retire. If you want to retire early, count on thirty, forty or more years yet to live after you stop working. Here is some advice that can help you plan for that event.
Retirement is supposed to be the play time after all of your hard work. You get to enjoy the fruits of your labors, spending time traveling, being with friends and family, and doing generally whatever you want. But, that kind of existence doesn’t just fall from the sky. There are many things to consider to take advantage of your new found freedom. Here are some ideas for you to consider.
Planning – Plan well and plan early. Retiring early means you won’t be able to tap into your social security for some time. You will need to live in the meantime. Decide how much money you will need to pay monthly expenses, medical insurance and bills, and to do whatever it is you have dreamed of for your retirement. That ballpark figure is what you are aiming for as regards savings and investments to get you through.
Investment portfolio – For you, the name of the game will be diversification. Having numerous investments of many different types will provide you with both short-term and long-term income. With a goal in mind, you are more likely to be disciplined with investing and saving. Before you invest, read up on how to do it wisely. Talk to a financial advisor to get started.
Invest in your retirement fund at work – Most companies offer their employees an employee 401(k) plan. Here, you invest a certain percentage of your earnings, pre-tax, and your employer will match this up to a certain percentage. You do get your money but you only get the employer match when you are fully vested – usually after five years of employment. With that money, you get to decide how you want to invest by changing the percentage of funds in high risk and low risk investment options.
Other retirement funds – You can also invest in an IRA to build up more income for your retirement. If you are not planning on using your income tax refund, start an IRA account. This was money that you didn’t count in regular monthly pay, so it won’t be missed necessarily.
Take care of health insurance – As we age, things start to break down in the body. You’ll want adequate medical coverage going into your senior years so most of your money doesn’t go to medical bills. Assess your health care needs now so that you can apply for the coverage you need while you are well to be used later if you need it.
Are you thinking about retiring early? It is a dream come true, but one that requires some work on your part to make it happen. Use the above tips to begin planning.
Tags: early retirement, retirement advice, retirement planning