Retirement planning is a process to determine retirement income goals and the actions necessary to achieve these goals. Retirement planning is a life-long process that is highly encouraged by financial advisors and any successful man. Although this planning could easily take 20 to 40 years, it grants you the power to fulfill your wishes while celebrating your financial independence. Every plan for retirement is unique since every person has different ideas and goals on how they wish to spend their retirement life.
Early retirement can be an ambitious financial goal, but with the right plan in place, you can reach it. Increasingly, employers are not offering traditional pensions to their employees, which in the past allowed them to supplement their guaranteed income and potentially retire early.
If you have a pension with your employer you are in a lucky minority, but it may not cover all of your expenses if you plan to live large in retirement. With or without a traditional pension, it’s important to have a plan in place if you wish to make your dream to retire early a reality.
Here are a few tips to work towards achieving early retirement.
Refinance your mortgage
According to statistics, nearly 15 million people save approximately $250 per month by refinancing their mortgages. At this rate, you can save over $45,000 by refinancing their 30-year mortgage and be clearer of their debts sooner than planned.
Automate your retirement money
Stocking money in IRA or 401(k) plan provides you with the opportunity to invest a small sum of your money and grow it into more considerable sums over time. You can also automate your retirement money by signing up to have money automatically deducted from your paycheck and be transferred into your retirement account.
Get rid of credit card debts
The longer you keep your credit card debts pending, you have to pay more interest. Pending your bills can cost you your entire savings for your children’s education and goals; instead, all your money would be monopolized by debts. Hence financial advisors suggest clearing off debts and paying bills as soon as possible.
Maintaining a regular credit report is equally vital since these reports determine how much you will pay to borrow money for significant expenses such as mortgages. To keep a good credit report, you should review these reports at least once a year and check for any errors or misprints before paying off your credit card balance.
Create a plan
To retire early it is crucial not only to develop goals and a course of action, but also to stick to the plan. You can make this easier by making your savings and investment plans automatic, for example, if you and your financial planner determine that you should save $500 per month in your brokerage account, set up an automatic transfer to make sure it happens every month without having to transfer manually.
Early retirement is certainly an ambitious financial goal, but it can be far easier with the proper planning. These steps can get you well on your way toward financial freedom years before the average American leaves the workforce.