Tips for Retiring Before You’re 50

Retirement is freedom for many people. Freedom from getting chained in the small office cubicle. Freedom from the demands of managers and supervisors. Freedom from the despised term called “work”. But unless you were born with a couple of millions in your trust fund, you will have to wait—while working. The good news is you can retire earlier than the average retirement age of 65 as long as you start planning early.

Start from the home.

The cost of renting an apartment or paying the house mortgage takes out a huge portion of your income. If you’re renting, think about downsizing and looking for a cheaper place. Think of it this way: your rent is not even an investment on anything; it’s just money that goes into somebody else’s pocket and is gone for good. If you’re going to give away your hard-earned money, you might as well make it as little as possible.

If you own the house and can’t escape the mortgage, consider renting out a room or the upper floor if you live in a two-story house. If lack of privacy is your concern, think about the rent money you get that you can use to pay off utilities. You can also opt to switch from a 30-year to a 15-year mortgage, which can save you from paying more interest. It does mean that you’ll be paying higher monthly but in the long run, you still saved more.

Selling the house is a difficult decision to make but think about your long-term goals. You can put the equity into a bond fund and live off the interest.

Work towards your priorities.

As a couple or a family, decide on where you would like to spend your money. Is it for a vacation house in Cape Cod? Traveling around the world? A nice, classic car? Keep your eyes on the prize and don’t make unnecessary purchases—items that do not work towards your goal. No new cars, no shopping sprees, no latest phones.

But remember to strike a balance between today and tomorrow. You don’t want to deprive yourself too much for you are only young once. Saving is always the better choice but not to the point that you can’t enjoy the fruits of your labor every now and then.

Live below your means.

After you’ve retired and left the workforce, it doesn’t mean that you can rightfully splurge your savings. Stretch that bottom dollar and opt for something less luxurious but comfortable. If you’re traveling, visit countries that put more value to the dollar.

Get freelance work.

If you have the opportunity to work from home for certain periods of time, why not? After not working for so long, you might miss getting your hands on your field of expertise even if it’s only temporary. And never say no to money!

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