As we lean into our forties, retirement is more at the forefront of our thoughts than when we were in our twenties. In fact, polls show that people tend to predict a much younger retirement age when they’re in their thirties than they do in their forties. And although the average age most working Americans think they’ll retire is 66, they actually usually end up retiring around 61.
When you look at your savings now, retiring at even 61, much less any earlier, might seem unlikely. But with some creative financing and aggressive savings, your dream might be closer to reality than you think.
If you live on a salary that’s not likely to change, you need to get creative with your streams of income. Look into options trading for beginners where you can buy and sell contracts based on securities. Options trading is a lower risk investment than say, futures because you can pull your options at any time you wish. In other words, you are not limited to buying or selling options as you are in stocks or futures. You can choose to simply walk away from the investment and pull out your money if it doesn’t look promising. There are also many other things you can invest in, such as real estate, peer-to-peer lending, and mutual funds, just to name a few.
Shift your focus
In order to retire early, you will probably have to change your way of thinking. For example, instead of saving for a bigger house, you might want to consider downsizing as soon as possible. And instead of planning a big vacation every year, those funds could possibly go into your retirement fund instead. Basically, you and your spouse will have to decide what is most important and focus on the primary goals. If you can live and budget as if you are already retired, you’ll be able to shift into that lifestyle much earlier than you think.
Speak to your attorney
It’s important to speak to someone who can help you plan before any type of major life change. A financial advisor can help with investments and savings, but your lawyer can help you devise trusts or other documents that might be needed to plan for your family’s future. Your attorney can also help you discover any assets you’re entitled to that you may not know about, including social security or other retirement benefits through your place of employment.
Consider partial retirement
Not only does leaving your job usually leave you with a lower income, it can also have a profound effect on you psychologically. Transitioning into retirement can leave you feeling like a “nobody” or of little importance. It can also be a lot more boring than you imagined. So, instead of transitioning suddenly from a productive member of the workforce to someone who lays on the beach all day, it might be better to make the change gradually.
Start out with a shift to part-time or contract work or find a job you can do from home. For example, if you are a teacher, consider becoming a substitute and working a couple of days a week. Or teach online for one of the many online high schools or universities who need instructors. Working part-time can help you retire sooner since you won’t be giving up 100 percent of your income.
The most important thing to do when deciding to retire young is to save aggressively. This means paying yourself first and socking back investment earnings. The earlier you start, the sooner you can retire.