Early Retirement: It’s Never Too Soon to Start Planning Your Retirement

When will you be in the financial position to be able to give up work? Will you be able to stop working in time to be able to enjoy your freedom? Alternatively, will you carry on working until you die? Have you even thought about retirement yet?If you are still in your twenties or early thirties you may believe that you are too young to be thinking about retirement. That is quite understandable. Retirement must seem a long way off and you probably have other, more urgent priorities. However, the earlier you start, the easier it is to plan for an early retirement. Why is that? Well, the longer time you have in which to save up for something, the less you have to save regularly. Does that make sense?Early retirement means having the opportunity to stop work while you’re still young and fit enough to enjoy life. This could be at any age from 55 to 64 with 65 being considered a”‘normal” retirement age.Why is it important to plan for early retirement? Only careful planning will allow you the opportunity to stop working whilst you’re still young enough to enjoy your freedom to do all the things you never seem to have time for whilst working. However, without planning, you may find yourself in the unfortunate situation of having to work until you die. You wouldn’t want that, would you?Planning for early retirement is certainly not an easy process. As the word “planning” implies, there are a lot of things to be considered, including your savings, your assets, your family, and anything else that may be involved. Sound financial planning is vitally important.How do you plan properly for early retirement? Firstly you need to think about how much money you are going to need to fund your retirement. Remember that the capital you accumulate will have to last you for the rest of your life. How long will that be? Well, obviously, the younger you are when you retire, the longer your money will have to last. In other words, the younger you want to retire, the more money you will require. As a rule of thumb, we would normally recommend a fund of about twenty times the amount of annual income you are going to need – and you need to factor in inflation as well! Now do you see why you need to start planning when you are young? This is a vitally important part of financial planning.However, there is more to early retirement planning than simply focusing on the financial aspects. It is sad but true that there are many people who have retired with enough money on their pockets, who are in poor health and who find themselves incapable of doing all the things they would have liked to have had the time for when they were younger. Unfortunately that is mainly the result of failing to plan properly for early retirement. Please don’t let that happen to you!When planning retirement, therefore, it is important to consider how you want to spend your time after finishing your career. What are you goals? What do you enjoy doing now that you would like to have more time for? Would you like to travel the world, play golf, write a book, learn to play a musical instrument, or perhaps paint pictures? Would you like to do voluntary work to give back to the community? Or perhaps you see yourself winding down gradually by working part time.Finally, ask yourself this important question, if you were able to give up work today, how would you spend your free time? There’s a great big world out there with wealth of options for you. Make use of your choices and enjoy what life has to offer. Enlist the help of an Independent Financial Adviser and start planning NOW for a long and happy life after work.

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