Planning For Early Retirement
Oh, retirement. The one thing that almost everyone strives for. The end of the working life, and the beginning of a new, easier one full of traveling, family, and… not working. But even though retirement is a common goal, it’s certainly not an easy one.
Reaching that goal of retirement is harder now than it was in the past. More and more people are staying in the workforce, and many retirees go on to start their own businesses.
But for those who want to begin the retired life as soon as possible, what’s the best way to plan for early retirement? In summary, planning, creating goals, investing, commitment, and talking to a retirement financial advisor.
Just Like College
The first step is to start early.
Remember back when you were in high school and college? If you had a project due in a month, what would you (ideally) do? Would you wait to touch it until the night before, or would you start at the beginning of the month?
Ignoring the tendencies of students to procrastinate (we’ve all been there), I think we can safely say that the smarter option is probably the latter.
You start early with the basics, expand and get your research done, and put it all together. Then you edit and perfect it, so that the day before it’s due, you just look it over and you’re ready to go.
Now if you think of your retirement as that project, and that month as your working life, that should give you a pretty good perspective on how to prepare. Start early with some basics: a savings account, and maybe a CD.
Build some savings in there with your paychecks. Make some more aggressive investments for the long term. Use the benefits you qualify for at work to your advantage and work towards your goal. That way you’ll be ready when the time comes.
What’s The Goal?
You should decide early on exactly what retirement means to you and what you are shooting for.
- What are you going to spend your money on when you are retired?
- When are you hoping to retire?
- Will you move on to a second career or travel the world for a decade or two?
- What will your income be, and for how long?
- What investments and insurance will you have, and when will they start paying off?
- When will Social Security kick in?
These are all questions you should ask yourself to make sure you are on the right track.
We have a technique we like to use called SMART goals and you can easily start this process in 10 quick steps. Try it!
Set Some Benchmarks
Using the school example again, you probably had a planner or assignment book to keep every part of your project scheduled and spelled out.
When planning for early retirement, follow your mental assignment book (or create a physical one!). If you have the details planned ahead of time, you’ll have a higher chance of success.
Keep a Diverse Portfolio
We say this all the time. Don’t put all your eggs in one basket, because you’ll have a hard time recovering if it comes crashing down.
Keep some conservative options, some aggressive ones, and be sure to include ones that have historically had a low correlation with each other.
Stick to The Plan
No matter what the short-term cost, you have to stick to your plan if it’s going to work. This might mean buying a smaller house and a used car so you can save more money, or putting an extra portion of your paycheck into your retirement fund every month so that it can earn interest.
Living off of less can be intimidating and sometimes uncomfortable, but if you keep your end goal in mind it will all be worth it.
Finally, seek help from a retirement financial advisor you trust to get solid advice on creating and reaching your goals for retirement. Take advantage of all the resources available to you and make sure that meeting your savings goals is a top priority. Take the next step and schedule a free consultation with a Medallion Group advisor today!
At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice, and management they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client expectations – because we have high expectations of ourselves.