Why do we work? So that we can earn enough to lead a contented and comfortable life. But we often forget the real objective in our lives and get bogged down by our daily struggles to sustain our increasingly materialistic lifestyles. What we get in return is a life filled with stress.
On the flip-side, there are some of us who wish to retire early and lead our lives in peace. For these free birds who wish to retire at an early age, it is vital to factor in these 5 points.
Figure out how much money you would need your family’s future. Also, plan how your wealth needs to grow in proportion to your existing income or faster than that. Account for inflation and changes in taxation laws.
It is important that you come to terms with the idea of retirement, which means you let go your primary income source. To sustain your lifestyle, you will need to depend on your investments. You need to your finances in a way that you only have to keep skimming a portion of the interest on the principal invested amount as a source of income. In simple words, the money you withdraw from your investments should be proportionate to your primary income. And it still doesn’t account for emergencies. Rental incomes from property investments can also help as added source of income. Also, invest in funds which can be liquidated quickly.
Retirement calls for a modest lifestyle. You need to prioritize your expenditure.You need to bear in mind that you can no longer constantly keep materialistic goals in mind. Having said that, retirement isn’t all that sad. You need to take a disciplined approach towards your expenditures. You can definitely plan your occasional treats.
The idea of retirement to many is about a peaceful, slow life with nothing to really worry about. Well, for someone who has worked for the better part of their life, settling in is easier said than done. Once the novelty period is over, the void kicks in. Be sure to plan an alternative mode of keeping yourself busy, which can also become a source of income. Be it farming, or becoming an investor, or a consultant with your previous employer. You can check if your workplace allows you to work part-time from home, albeit with a pay-cut.
No matter how much planning goes into your retirement, life will always throw a spanner in the works. Whether it is your children’s needs, or medical emergencies or any other sudden requirement of money, be prepared with contingency funds. These funds will never eat into your retirement income. Be wise to invest in strong cashless health & life insurance policies.
Whether you plan to retire earlier or a later point in your lives, you will always to consider these points whenever you plan to do so.