Let me ask you a very significant question related to your life. What’s your take on Early Retirement?
Well it is a dream come true for most of us and I sincerely hope that you too are one of those who wish to retire (much) early than age 60. But is taking early retirement so easy? Quite certainly the answer is an emphatic “no”.
Early retirement is possible only when you have enough money with you which would last till you survive. And here the question is not only for survival as you would certainly want to maintain the standard of living that you are leading at present.
So how would you make it possible?
How can you achieve an early retirement for yourself?
Well you have to start planning for your early retirement. You have to prepare yourself to actually qualify for taking an early retirement. It is easy to dream of an early retirement but it takes real efforts to achieve an early retirement for yourself. Here under we enumerate the steps you need to take to take to have early retirement for yourself. So Planning for your early retirement is a must for you.
As a first and foremost step you need to undertake Financial Planning. You need to figure out how much money you actually have and also how much money you need to have when you take early retirement. So to calculate your present net worth you need to add up all your assets which include cash, investments in stuff like stocks, commodities, real estate, value of your home, retirement accounts, etc.
Then you need to subtract all your outstanding debts from the value of your total assets. This way you can find out your net worth. After this you need to figure out how much money you would need once you retire. This figure is dependent on lot many factors such as when you plan to retire, what standard of living you wish to follow after retirement, and of course what all you want to do when you get retired.
Hence Finance Planning enables you to figure out how much more you need to earn before you can actually retire. So you need to get this figure first.
Once you have done your Finance Planning, the next step important step you have to take is to start Budgeting. Usually you can do Budgeting on a monthly basis. Preparing a well drawn out Budget would eventually enable you to know your total earnings and the expenditures you are incurring on a monthly basis. You get to know how you are spending your money, in what categories do you spend and are also able to figure out the areas where you are over spending. This way you can control your expenses and more positively save for your future goal of retirement. You can then figure out your short comings and can then improve upon your financial planning for an early retirement.
The next big step that you have to take for an early retirement is to start saving. This is very essential. Though you may have done financial planning and even started budgeting but without saving money you would reach nowhere. Saving would give you the much needed financial power so that you may retire rich. Initially you may begin with saving small amount every month and then gradually increase your saving. You should set out a definite saving target for each month depending upon the fund you want to build for your post retirement life.
Health Care is a major concern for post retirement life. Moreover Health Care costs are rising day by day. So you need to make adequate arrangements in order to meet any eventuality related to your health or even your family members. One way out is to have Health Insurance Cover not only for yourself but also for your entire family.
Also taking Health Insurance Cover in an early age is beneficial financially too. Health Insurance costs less if you take it at a younger age as compared to taking it at higher age say more than 50 years of age. Plus you are assured that all your health related expenses would be met if in case you or your family member falls ill and needs medication or even hospitalization.
Once you have started saving and met your Health Care needs, the time is right for you to start investing. Doing Investments lets you build financial wealth for your post retirement life. Well there are various investment options you can choose from such as stocks, mutual funds, real estates, commodities, fixed deposits, and many others. But you should follow proper financial strategy so that you stand to gain and accumulate wealth rather than face losses. You must be aware of the risks involved while investing and should do thorough research and analysis before making investment decisions.
So you see that planning for your early retirement is very much possible and achievable. We have described some of the keys steps that you should take if you wish for taking an early retirement. Early retirement is a dream for many of us which can certainly be transformed into reality. You just need to believe on yourself and take appropriate course of action so that you can too retire early and happily.