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Tag: early retirement

  • Retirement Planning: 3 Reasons To Start As Soon As Possible

    Retirement Planning: 3 Reasons To Start As Soon As Possible

    Retirement planning is typically something that individuals and couples engage in once they hit their late forties and early fifties. The conventional wisdom has been that once you hit a certain age, you should be looking to prepare to retire.

    In actuality, every American needs to start working on their “nest age” immediately. Putting it off while failing to consider drastic changes to the economy will likely result in disappointment later on.

    There IS no certain age to begin retirement planning. These three reasons to start preparations as soon as possible should hopefully help you take steps towards a happy retirement.

    More And More Americans Are Not Able To Retire…Period.

    Senior citizens were polled in 2012 and a surprising number—as many as 30 percent—said they didn’t intend to stop working until they hit 80.

    Compare that to the once held belief that 65 was the ideal retirement age.

    And 80 is being optimistic; for too many senior citizens there will simply be no retirement. Or they may have planned to retire in their 80s, but will not live to see that age.

    The recent recession and housing bust can be blamed for this grim outlook which encourages retirement-age Americans to delay or forego retiring.

    If you do not wish to be working hard into your seventies, then you shouldn’t delay retirement planning.

    The Volatile Stock Markets Aren’t Big On Reassurance

    Putting all your nest eggs in one basket? You may be setting yourself up for disaster.

    We already know that the stock markets can crash at any time, and are likely to do so at least once in our lifetimes.

    A number of aging Americans have put most of their savings into the stock markets in the hopes that what they most of their savings will still be there when they retire.

    While buying some shares isn’t a terrible idea, putting everything into something so unpredictable is never wise. Consider alternatives for investment such as CDs, real estate, and even gold.

    The Longer You Wait, The Less Money You’ll Have

    In the U.S. News article “5 Reasons to Start Investing for Retirement Today”, the writer brings up an outstanding point as to why you should begin saving for retirement as soon as possible:

    The longer you have your money invested, the more powerful compounding interest is. For example, $5,000 invested by a 20-year-old with an average 8 percent annual return will yield $160,000 by the time he retires. That same amount invested by a 39-year-old will yield only $40,000 upon retirement.

    While his example specifically addresses compounding interest, the same logic can be applied no matter how you choose to invest or save for retirement.

    The longer you wait, the fewer retirement resources you will have at your disposal!

    What other NEED TO KNOW advice can you offer persons planning to retire?

  • Early Retirement: Three Tips To Make It Happen

    Many people dream of early retirement, but few are able to make it happen.

    While it may sound pretty easy in theory, it can take a lot of planning and hard work and if you don’t get a jump on your early retirement plan early, you might not have enough time to make it happen.

    If you want to retire early and devote your time to traveling, a favorite hobby, spending time with family or just relaxing, you might need some help with your early retirement.

    Here are a few tips that will make early retirement more realistic for you and help you get the ball rolling on your retirement plan.

    Invest
    Money spent is gone forever but if you invest your money instead of spending it, your investment will grow and you will have money when you need it. Many people think that you have to have a lot of money before you can invest any. This isn’t true, even small investments can pay off and if you start small, you can move up to bigger investments with higher payoffs.

    Save
    If you are lucky enough to be able to save money, make sure you are putting it in a savings account that is earning high interest. Most banks offer special long-term savings accounts that add more interest than regular ones. You have to leave your money in the account for the specified amount of time before you can take it out and if you remove the money from the savings, you will be penalized.

    Stop Spending
    Everyone wants a big house and a fast sports car, but which is more important, having those things or retiring with money? The easiest way to retire is to stop buying unnecessary things and save or invest the money you would have spent on them. That doesn’t mean you have to give up everything, but avoid overspending when possible.

    These three tips will help you budget and prepare for retirement. If you get started on your retirement plan early in life, you may be lucky enough to retire early.

    Image via Wikimedia Commons

  • Early Retirement: What Would Mr. Mustache Do?

    Early retirement is more of a reality than many of us know. Even if you are in your late 40s and have pretty much missed that “early” part of the deal, there are still ways to speed up that process.

    While there are investment plans and careers that give one a better chance of retiring early, you can also retire early with your lifestyle choices.

    The art of Planned Frugalness is a bit different from Just Getting By. Planned Frugalness with the goal of early retirement are incorporating set plans of actions that revolve around spending much less than what you make–and anyone can do it.

    There’s a guy named Mr. Money Mustache, and he is about that lifestyle. Mr. Money Mustache calls himself a “financial magician” and retired at 30. His motivational website gives us encouraging tough love anecdotes such as “Get Your S*** Together” and more to guide us on the early retirement track. While the site is full of great information as well as a forum to vent, he narrows early retirement steps down into five succinct and sweet tips for MarketWatch of The Wall Street Journal:

    1. Ride a Bike
    The most awesome advice ever– you cut back on car and insurance payments as well as gym fees. While it might be more easier to do so in urban communities and with no children, it is still possible with the current surge of varied car services available.

    2. Treat Your Dollar Like An Employee
    When it comes to your dollar bills, you don’t want a high turnover rate. Invest the dollars, and keep them on your roster instead of letting them fly out of the door.

    3. Output is More Important Than Input
    Pay cuts and pay increases can happen any day, but regulating how much you spend is always up to you. Mr. Money Mustache considers your spending rate as the “single biggest factor” that determines when you’ll be able to retire.

    4. Toss the Television
    Mr. Money Mustache asserts that television wastes your time,and saps the quality time away that you could be using to instead of you using to figure out ways to hone your life. Mr. Mustache also asserts that television darkens your perception on life and increases your urge to participate in high spending to keep up with what media portrays.

    5. Be Happy
    Instead of looking for external and material things to make you happy, find joy in the free things such as family and friends. Mr. Mustache advises you to make happiness your life goal instead of having money, and with a few key adjustments it should all work out.

    There you have it. Hippie Hoo-rah or Great Financial Advice? Mr. Money Mustache retired at the age of 30 starting with no more money than the Average Joe. Try reading his website for more thorough advice before you make a final decision– it might work for you too.


    Image via Wikimedia Commons

  • Retirement Planning: Not Just For Seniors

    Retirement Planning: Not Just For Seniors

    When many Americans hear the words, “retirement planning”, they immediately think of silver-haired oldsters plotting life after they are finally able to stop working. This isn’t so unusual since traditionally, it’s been expected that individuals begin planning on an exit from the workforce at about the age of 60 (if they’re lucky)

    However, retirement planning isn’t just for seniors. It’s actually a bad idea to wait until decades have gone by to plan ahead for how you intend to spend the latter part of your life. Even more encouraging, with careful planning and a bit of frugality, your future retirement may not be as far off as you think

    Reasons To Plan Ahead

    It’s always a good idea to plan for the future rather than wait and see what happens. We often take for granted how quickly time flies by. Also taken for granted is a hard reality: You never know what events in the world could severely impact your income during the latter part of your life.

    Think of the millions of Americans who were blindsided by the recession. A number of homes and jobs were lost and people who had their perfect future retirement all planned are now scrambling for employment.

    The most ideal time to begin retirement planning? I would say right this minute. As in, the next step after finishing this article would be to get to work. There is no such thing as too soon to take care of yourself and your significant other.

    Why Not Get Out Of The Workforce Early?

    Another reason to get to work immediately on retirement planning is that it’s very possible that you could find yourself retired far ahead of schedule. This is the belief of “early retirement” individuals, those who are planning to no longer have to work by the time they hit their late fifties, forties, or even thirties.

    Can you imagine being on a fishing trip at thirty-six because you don’t have to work anymore? It may sound too good to be true, but there are suggestions for how to make this happen. One major bit of advice that is constantly repeated is for persons seeking to retire early to save, save, save, and save some more. If you invest, invest smartly. There are scam artists about looking to make off with your hard earned money while selling you a pipe dream.

    It also helps to look into ways to create multiple streams of income.

    Whether you are looking to retire in ten years or fifty years, be smart about your money and focused on your retirement goal. Start planning now, doing all the necessary research, and begin saving. The more seriously you approach your retirement planning, the more likely you are to avoid the pitfalls of other individuals.

    Image via Wikimedia Commons