Many of us, while going through our daily grind, wonder about the possibility of having an early retirement. While in most cultures retiring early may be considered to be a trait of the lazy, they’re actually ambitious people who want to cross an ocean on a cruise ship or sunbathe on a Miami Beach, while they are still physically able to enjoy what life has to offer.
But how many of those who harbour similar fantasies are actually able to retire early? With smart planning you will not have to put up with the disappointment you may experience upon turning 50 that you simply cannot afford to retire, let alone retire in luxury.
Following are certain tips that can help you to plan an early retirement:
Ease Yourself into Retirement
If you ask any Briton how they wish to glide into their retirement, you will find that many of them find the idea of working part-time even after retirement to be appealing. Some of them may even be interested in a new career altogether.
Due to the tax benefits that are offered by the government to those in retirement, working part-time or full-time can supply them with a steady source of good income. If the mortgage on the house has been paid off, you may be able to earn sufficiently enough so as to not have to dip into your retirement savings.
You can even negotiate with your employer to allow you to go on sabbaticals from time to time. With time in your hands and your retirement pot untouched you should be able to treat yourself to little adventures.
Save Enough and Start Early
Retiring early may seem impossible if you do not save enough. Merely, saving enough may not be enough either and you may have to inculcate this practice at a young age. The amount you contribute throughout your working life will determine how much luxury and comfort your retirement will have in store for you.
You should target to contribute a sum of at least £8,000 to £9,000 towards your retirement fund from the age of 25 which includes contributions that you make, your employer makes and also the tax relief involved. If you are able to continue this practice till the time you turn 55 you should be able to lead an enviable retirement life.
When any person retires they usually have three stages of activity. At the first stage they are enthusiastic about moving around and going to places. This is the retirement stage where people usually spend a lot of money.
In the second stage, they move around and travel but quite slowly as their physical health won’t allow them to be much excited.
The third stage involves a lot of television watching on the couch. The third stage is when you need to have enough money saved so as to look after your health properly. It is also the time when you shouldn’t have to worry about borrowing money from others.
You should keep these three stages in mind and spend money accordingly. Spending your whole retirement fund during the active years can lead to a severe financial crunch in your years of little activity, when you will possibly need them the most.
Don’t forget to Write a Will
Irrespective of how you lead your life and how you pass your days in retirement, you shouldn’t be negligent about your legacy. Not making sufficient provisions for your inheritance can cause a lot of inconvenience to your loved ones after you’re gone.
It is possible that the ones who you wish should inherit your legacy are left empty handed while those whom you never intended to gift anything walk away with all your wealth. To ensure that such things do not happen to your hard earned money you should write a Will. There are many convenient and inexpensive options which are available these days to write a Will such as using a Will writing kit or hiring the services of a lawyer if your estate is complicated.
With the right planning, you can not only lead a life of luxury in retirement but also ensure that your loved ones are taken proper care of long after you’re gone.