How To Retire At 50
Are you planning on retiring by the age of 50? Follow our quick and easy how-to guide below!
Step 1. Decide To Retire Early
The first step is, perhaps, the most difficult one. If you want to retire early, it’s such an advantage if you decide on this at a young age. Make this a goal so you can start saving money to achieve your dream. You will give yourself a better chance to retire at 50 if you decide on this at age 30 instead of 40, of course.
This step seems like common sense, but it can be very tough while raising a young family and/or climbing the corporate ladder. Life will certainly get in the way at times, so focus is crucial when early retirement is the plan. The financial experts suggest picking up an additional part-time job or asking for a raise to maximize your potential retirement savings.
Step 2. Save Money Now
Saving money can actually be a lot easier than you may believe. Experts say you need to use the four-percent rule when saving. This rule says that your savings needs to last 30 years, as long as you withdraw four percent of said savings during year one of your retirement.
For example, if you plan on living on $250,000 for the next 30 years, then your goal should be to have $750,000 saved in the bank. First, determine how much you can live on during retirement to come up with a proper estimate.
Step 3. Smart Investments
The younger you are, the more room you have for risky investments. Financial experts believe that even if the market crashes while you’re in your 20s, you can still regain enough wealth to have a healthy and successful financial life.
Individuals aiming for early retirement are usually advised to stay away from risky investments. Instead, take a conservative approach to the market. Ensure that you diversify and factor in Social Security benefits when coming up with an early retirement budget.
Step 4. Lifestyle Adjustments
Lifestyle adjustments are necessary, yet they don’t have to be drastic when planning for an early retirement. Every individual trying to retire by 50 should re-evaluate all current spending habits, savings and investment options.
It’s important to rid yourself of any unnecessary expenses. Typically, this will consist of eating out often, taking multiple vacations and attending expensive events or shows. You should pay off any debts or loans as soon as possible.
Step 5. Have Contingency Plans
Early retirement offers a few questions, including:
- Should I pick up an additional part-time job?
- How many income streams will I have before and during retirement?
- Should I take any Social Security benefits early or wait until retirement age?
- Is my life insurance plan good enough?
- Can I afford long-term care, if needed?
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Canyon Winds Retirement is an assisted living facility in Mesa, Arizona. To schedule a tour of our assisted living facility, contact SLS Communities or for more information please call us today at 480-405-1129.
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