Retiring early at age 45 may seem like a longshot, but with proper planning it is certainly possible. Early retirement sounds like a dream, so what does it take to actually achieve this goal? Here are a few steps one can take to ensure calling it quits when middle aged.
Follow these four simple steps if you are planning on retiring by age 45.
- Decide on early retirement
- Adjust lifestyle
- Start saving now
- Invest wisely
Decide On Early Retirement
The biggest key for retiring by the age of 45 is deciding on that number far in advance. For instance, you have a much better chance to start a successful early retirement if you set your goal at age 25 rather than 35. It’s common sense, but it’s hard to know when you’d like to retire when you have basically just begun your years in the workforce. That being said, if you do plan on early retirement, you’ll likely have to accelerate your income. There are several ways to do this. You can pick up a part-time job or start a side business. Or, you can ask for a raise or more hours/extra work at your full-time position. Contribute money towards your retirement and certainly resist the urge to live above your means.
When one sees ‘adjust lifestyle’ it may be met with resistance at first. This does not mean you have to drastically change your lifestyle in order to retire early, though. If you’re planning on retiring earlier than most, then the normal retirement savings plans don’t apply. This simply means re-evaluating how you spend, save and invest currently. Try to rid yourself of any unnecessary expenses. Next, paying off any car loans, student loans or any debt would be extremely helpful. Some luxuries may have to go, such as paying for events or fancy meals, but the amount of money saved will make it worthwhile in the long run.
Start Saving Now
The four percent rule is a common rule of thumb for those trying to figure out just how much money they need to save towards retirement. This belief states that your savings should last at least 30 years as long as you withdraw 4% of your savings during your first year of retirement. If you’re planning to live on $25,000 per year for the next 30 years, then you’ll need to have at least $750,000 in the bank. Figure out how much you’ll need to live on each year and start saving accordingly as soon as possible.
Experts believe the younger you are, the more room you have for risk. They say even if the market collapses in your 20s, you can still have enough money to recover and succeed later on in life. But, if you really want to go for an early retirement, perhaps investing wisely rather than recklessly is the way to go. A more conservative approach to the market could help you reach your goal on time. Make sure to always diversify and factor in Social Security benefits into your retirement budget as well.
Independent, Assisted Living And Memory Care
Luckily for residents of Arizona, there are many facilities that offer all three services. Canyon Winds Retirement Community is one such place that features independent, assisted living and memory care services. Most dementia patients should opt toward either the assisted living or memory care options. If the case of dementia is advanced, memory care offers 24/7 staff, which is the best case scenario for patients with more needs than most assisted living residents.