If you’re in your 30s or younger, consider it the perfect time to plan your retirement.
Sure, it’s probably hard to envision that far-off future, especially since most of us are more focused on how we’re going to make it happen career-wise and life-wise for the next five, maybe ten years.
Nevertheless, socking some cash away in an IRA and investing some expendable income in a secure fund that will earn interest over the long haul is just the thing economists and financial advisors have been telling us to do for for-ev-er.
Even if you don’t make a lot of money right now, with the ease of being able to work super-flexible side gigs like driving for Lyft, zipping around town on your bike via Postmates, or getting into selling on Amazon, Etsy, or eBay, building reserves of money has never been more schedule-friendly and flexible not to mention invigorating.
The act of working hard to do something that will contribute to our later years now can be a very powerful experience indeed – one that helps us think about money in a more goal-oriented way.
Get Informed and Stay Informed
Did you know the Federal Reserve recently raised the interest rate by .25%. This uptick could lead to a higher return on investments in coming years. Since knowledge is power, stay abreast of economic trends. If you already know a few things about investing, learn more! Get proactive and learn how to manage your money well.
How Can I Prepare for Early Retirement?
Though it may be easier said than done, one of the smartest things you can do right now is to live a little bit more leanly. That “little bit” is different for everyone, but if you can live on say 60% of your income instead of 75%, then that’s 15% more of your income that you can put into savings for retirement.
If this just isn’t an option for you right now, don’t beat yourself up about it. Instead, consider just a few areas in which you could cut back. Maybe you could cancel that HBO channel, eat one less lavish dinner a month, or cut out those lattes every morning. Those nickels and dimes really do add up (money saving apps).
For those who are closer to middle age, another consideration you should have is related to the property you may have acquired. One great way to free up cash is to downsize to a smaller home. Or, perhaps it’s time to refinance your mortgage (rates are relatively low these days).
Another option for either you or your significant other that can bring in cash after the kids have left the nest is a side gig (check out the tips above). Not only could this bring more joy and color to your life, but it could also enable you to retire earlier and go, see, and do the stuff you want to do sooner rather than later.
Even if your life is your job and you’re on the fast-track to success, hoping to land that CFO position, isn’t it to at least have the option to retire early if you later decide that’s what you want? Saving early is just logical. The earlier you start, the more you can accumulate, especially if you invest wisely.
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