When we first start out in the world of work, it would be fair to say that retirement is the last thing on our mind. In fact, a lot of us treat it as something of an inconvenience. We see that small pension percentage exit our wage slip each and every month, and we almost curse the concept.
It’s only when you start to reach the mid-age mark that you really start to understand the repercussions of retirement and exactly how it is going to impact the quality of your life. By this, we’re talking about the costs of looking after yourself as you get older, and even how you are going to pay for your own funeral. Trust us; these can be key issues as you start to age.
The purpose of today’s article is to look at early retirement in more detail. In other words, what can you do to make retiring early a reality? Let’s now jump into some of the best ways to help you along your way.
Make the most of your pension
Figuring out your retirement paycheck is no easy task. You need sound advice on where to put the pension savings so that you end up with the most returns in your old age. As we have already alluded to, in the early days your pension can feel something like a burden. However, as time progresses, you’ll soon find that this is one of the easiest possible ways to facilitate early retirement.
There are all sorts of tax advantages of pensions, but there is far more to the topic than this. Sure, make sure that you are contributing the maximum, but also remember to keep reviewing your fund. A lot of people fall into the bad habit of just leaving it to tick over – even if it is underperforming. Keep in mind that pensions are investments, and you can dictate just what markets yours is going towards to get the very most out of it.
It would be fair to say that downsizing has become a hot topic over recent times, although it tends to focus on ageing couples whose children have fled the nest.
Well, it doesn’t have to be like this. If you think you are living beyond your means, consider downsizing. This can be something that can save you significant sums on your mortgage and ultimately makes that early retirement more likely.
Understand your true expenditure
Next on the list is not just understanding your current expenditure, but also acting on it. How much do you currently spend? Do you really need those levels of expense for this time in your life? You might just shave off your TV subscription as an example, but over the years this might contribute to tens of thousands of pounds that can be used to fuel that early investment.
Understand your future finances
However, the big question is about your future expenses. Don’t fall into the trap of thinking that you will spend less as you retire. As it happens, you’ll probably spend more. You’ll have more free time on your hands, and this can mean that you’re more tempted to spend money.
Sure, a few debts might be paid off, but make sure you do the sums if you are serious about retiring from an earlier stage.