The dream of many Americans is to retire early with a nest egg that allows them to live comfortably and still have the means to pursue their dreams. Early retirement is possible, but it requires formulating a financial strategy fairly early in your working career.
Retiring early can mean giving up the rat race at age 45, age 60, or some age between the two. You need to decide what early retirement means to you so that you can generate enough capital to provide for you until you die. Doing so means that you need to factor in your probable lifespan, an unpleasant task but one that needs to be done. You will also need to decide when you will begin drawing social security benefits. All of these factors need to be considered so that your retirement plan will be adequate for your needs.
Since you will not have forty years to generate money for your retirement, you will need to take more active steps to achieve your financial goals. Investing in real estate is one strategy that has worked for many early retirees. With the right guidance, you can turn investments in rental properties into a short-cut to financial security with returns that perform better than other investments like stock and retirement accounts.
If you can dedicate yourself to saving the maximum amount of money possible each year, it will definitely aid in meeting your early retirement goal. In the most drastic cases, people have been able to save around 70% of their income, allowing them to retire in seven to ten years. You may not want to live that frugally, but you can easily retire five to ten years early by committing to a no-frills existence.
Experts do advise that you pay off credit card debt and keep a financial cushion so that you can handle emergency expenses without dipping into your investments or selling your real estate. A good financial rule of thumb is to have enough cash to pay for three months of your monthly expenses on hand.
Although you need to set a retirement date goal, you will need to remain flexible. Life seldom runs according to plan, so if the unexpected happens, you might have to delay your retirement for a year or two. However, if you begin planning early and stick to a well-defined strategy, you can retire early enough to enjoy decades of being unfettered by a nine-to-five job.
Contact a professional, such as one from Benchmark Financial Advisors, for further assistance.