Even if you do enjoy your career, you’ve most likely day-dreamed about retiring early. And although starting your golden years ahead of schedule might seem like a dream, there are some ways to turn this into a reality through savvy investing.
If you’ve ever wondered how to retire early, check out our focal points to get started:
Save more using the 20-30-50 plan
One of the best ways to stash away more for retirement (and reach it earlier) is to follow a strategic budget. Although it might not seem to make a difference initially, stashing away a few extra dollars to invest monthly can make an enormous difference over time.
I suggest the 20-30-50 plan if you aren’t already contributing 20% of your income towards investing. The 20 is twenty percent of your budget, and in this scenario, it goes towards investing for retirement. Then, you’ll want to reserve 50 percent for essentials, and keep 30 percent for all the non-essential fun spending in your life. The 20 percent is non-negotiable, so you may have to cut back on the other sections if you start to fall short with this.
Contribute early (and often)
Quite simply, if you want to retire early, you’re going to have to contribute early. Consider this powerful example from Business Insider: with a 25-year old with $10,000 invested $320 a month at a 7% annual compound rate of return until they turned 65, they would wind up with $1 million.
By contributing early, your money has a longer time-frame to benefit from the power of investing and compound interest, which can put you on track to an early retirement. The lesson here is to start early, whether you’re aiming to retire early or just want to reach your retirement goals.
Create a realistic game plan
Our average lifespan is longer than ever, and especially if you plan to retire early, you’ll want a conservative investment plan that can last your entire retirement. Don’t make the mistake of retiring early (or even later) without having realistically accounted for your spending needs and goals.
Although everyone’s financial situation is different, I often recommend a plan that allows your finances to stretch to 100 years of age, and that can comfortably withstand a variety of stock market scenarios.
Find out more tips on how to retire early
At LexION Capital, we can help you turn your financial dreams into realities. Whether you want to find out how to retire early, or simply create a better financial future, we can craft a unique investment solution to get you on course. If you’d like to learn more, don’t hesitate to start a conversation with us.