Retiring early takes time and incredible discipline.
If you’re planning to retire early, you should aim to have at least 25 to 30 times your estimated annual expenses saved or invested, though that number may be lower or higher depending on the lifestyle you envision.
To achieve your target number, live below your means, increase your income, and max out your retirement accounts.
You should also aim to pay off all debt before retiring early, which may include your mortgage. And don’t forget to make a backup plan.
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The road to retiring early isn’t easy. It takes time and incredible discipline to earn, save, and invest as much as you possibly can.
That said, early retirement comes in various shapes and sizes and what it looks like to you will determine exactly what you need to do to get there. In general, here are the steps you can take:
How to retire early
1. Define early retirement
Retiring early doesn’t have to mean never earning a paycheck again — unless you want it to. Many early retirees define it as not having to work to live — i.e. financial independence — but maybe you want to leave your corporate job for something more creative where you can make your own hours. Or perhaps you’d like to focus only on non-income producing hobbies, or work in spurts and travel in between.
The first step on the path to early retirement is figuring out exactly what that phrase means to you. Establishing your ideal day-to-day will make it easier to plan for — but just so you know, it will probably evolve over time.
2. Establish your target number
After outlining your version of early retirement, it’s time to establish how much money you need to make it a …read more
Source:: Business Insider