The thought of early retirement is appealing. Regardless of how you feel about your job, just knowing you have the freedom to walk away is empowering. However, saving enough money for retirement can feel impossible. You want to make sure you have enough saved before walking away from your career. Many different formulas let you calculate how much you need to save before walking away from your job. While it is important to know how much you need to save, that is only one part of the puzzle. Your lifestyle will be very different, and it can be hard to know how to adjust for that as well. Planning this stage of your life looks different for everyone, but there are some things you should consider.
Plug the Holes in Your Budget
Knowing how much you should be saving each month is helpful, but you may have no idea how to come up with that money. If you feel that you are saving as much as possible, and it still will not meet your needs, it is normal to feel frustrated. Tightening up your budget allows you to find areas where you are spending more than necessary. Saving for retirement shouldn’t come at the expense of having enjoyable experiences today. By looking closely at your spending, you are almost certain to find areas to save. If you own your own home, look at refinancing your mortgage. If interest rates have dropped since you purchased your home you may be able to save a significant amount. You have the choice of lowering your monthly payment or shortening the term of your loan. If you are still paying on your student loans, refinancing them is a great way way to free up extra money every month. You can redirect this savings towards building your nest egg.
Work Towards a Paid Off Home
Paying off your home allows you to have significantly lower monthly expenses than if you still carried a mortgage. Having that untapped equity can also be beneficial if you find yourself facing major expenses, such as the need for assisted living or in-home care. Refinancing allows you to shorten the length of your loan. Another option is making extra payments toward the principal whenever possible. This can be a good choice if your pay is such that some months of the year you get an extra paycheck or you receive a bonus at your job.
Consider a Second Career
You may find that you enjoy your retirement less than you expected. After a lifetime of routine, some people struggle with a very open schedule. Taking a part-time job doing something you find interesting provides a little income and helps keep you involved in your community.
Take Care of Your Health
Taking care of your health is the most important thing you can do to have a successful early retirement. If you plan to retire early, it is probably so that you can enjoy activities and experiences you don’t have time for while you are working. Having your health fail will prevent this. Maintain a healthy weight, get some physical activity most days of the week, and visit your healthcare provider for annual check-ups. When your doctor recommends preventative testing or other work, follow-up. By taking care of your health you can be sure to get the most out of your retirement.