Early retirement is always a hot subject.
But especially post-Covid, many people are considering it rather than return to the office.
Here are some steps to start taking if you’re looking to head down the early retirement path.
- Develop a life plan.
Many people retire early only to find out they are unfulfilled, then find themselves regretting the decision. Once you cut ties with daily work or business, you will find that there is a void in your life that needs to be filled with new interests and new ways to meet people. Before you retire, start to consider how you will spend your days. Preparing for it will make the transition far easier.
- Commit to constant financial planning.
When you retire early, you need certainty that you’ll have enough to live the way you want. That means extensive financial planning to map out your income sources. You’ll want to stress test your model to make sure your income and assets stay sufficient to weather any economic storm. Then once your plan is in place, check in monthly to stay on track.
- Remove emotions from all of your financial decisions.
With investments, that means you must manage them with discipline, since you won’t likely be able to absorb big losses. And in your daily life, that means no emotional spending. You should keep to your budget, knowing that can help you stay on track so you don’t experience financial stress.
- Be smart with taxes.
Finally, you’ll want to make sure you’re paying your fair share, but no more. Look for ways to cut your taxes. Any strategy that saves you money now and in the future means less stress for you in retirement.