Financial experts advise that you should have at least 25 to 30 times your annual expenses in savings or investments if you plan to maintain your current lifestyle after retirement. There are free online retirement calculators that can help you determine how much you will need to save monthly to achieve your goals. Often, most of the calculators will factor in your current income after tax, debt, inflation, expenses, and more to generate the figures you need.
• Make Lifestyle Changes
Living below your means and spending less than you earn is one of the best ways to save aggressively if you are working towards early retirement. You may have to sacrifice living an expensive lifestyle and cutting the amount of money you spend on housing, clothing, utility, food, and transportation. You should also consider taking a second job or starting a side hustle to boost your earnings so you can save more money.
• Pay Off Your Debt
High-interest debt like mortgages can hit hard on your retirement savings and reduce your cash flow significantly. You should prioritize paying off all your debts, so you can have more money to push into your savings account. Furthermore, you must avoid falling into new debts while working hard to pay off the existing ones.
• Use Retirement Savings To Your Advantage
Some financial, banking and investment institutions offer high-yielding interest account on retirement savings; this means you will get more interest on your money than the regular savings account. You can check out several companies, compare their deals, and go with the one that offers the maximum return.
• Retiring Early Does Not Mean You Should Stop Earning
Research has shown that retirees who continue to earn passive income after retirement are happier than those who rely only on their savings. We suggest that you start making plans for investment that can generate a constant stream of passive income after you retire.
• Have a Back-Up Plan
What will happen if things didn’t go according to plan? You must envision the worst-case scenario and make plans for it in case the unexpected happens.
Sacrificing immediate gratification is necessary if you want to retire early. However, you should also not forget to live a fulfilling life and treat yourself with good things along the way.
Act Now and Enjoy a Happy Life