By Julia K. Pham, CFP®, AIF®, CDFA®, Wealth Advisor at Halbert Hargrove.
Are you thinking of retiring early? Here are the top 5 tips to do now.
- Assess your current financial situation
How much do you earn, and what are your current expenses? How much are you saving each month? You can’t get to where you want to go without knowing where you are.
- Consider your future retirement budget needs
Do this carefully and keep in mind that what you spend now might not be what you need later. Healthcare will likely be a large expense down the road, so be prepared. A popular rule of thumb to get to an idea of how much you’ll need saved by the time you retire is to multiply how much you’ll want to spend each year in retirement by 25. Everyone is different though and it’s usually better to get a plan tailored to your situation. Enlist the help of a financial advisor to help you determine that plan and get to your retirement date faster.
- Cut back on the frivolous and amp up your savings
Those $13 salads and weekly avocado toast won’t taste as good knowing you’re working extra time to fund those habits. The key to getting to a financial goal faster is staying disciplined and stashing as much away as possible, even if it means skipping a dinner out with friends.
Compounding. What Einstein once called the eighth wonder of the world. Take advantage by investing early and often, and don’t freak out when the market drops. Market volatility is normal, so the key is to stay invested.
- Decide what you’ll do when you’re retired
While it’s true that a large part of retiring early is figuring out how much money you’ll need to save, another big consideration is what you’ll do with all your free time when you get there. True wealth isn’t just about how much money you have tucked away, but the meaning and purpose you’ll derive from doing the things that matter to you, or with the time you’ll spend with the people you cherish the most.
For more information or questions, please contact Halbert Hargrove at firstname.lastname@example.org