How to retire early at 40 – 45 years of age? Retiring early is pretty awesome. It is very easy to see early retirement as a natural solution to a number of problems in your life. There is a general notion that retirement is all about enjoying every day of your life just the way you wanted to. However, the path is not as easy as you might have thought of. It is not meant for everyone and is a windy road. No matter what your age and what stage you plan to retire at, there are some things you must keep in mind before making the big decision.
Retirement planning is crucial for every individual. Whether you retire early or at the retirement age, you will have to make certain financial decisions in order to ensure that you have a secure and comfortable retirement. The journey can be made wonderful if you plan well and plan right. In order to retire early and to retire well, here are some points you need to keep in mind.
How to Retire Early? Don’t Miss These Points:
Below are some of the points which can give you the answer for your question “How to Retire Early”. You should consider these important point as a task for your early retirement planning. This will assist you in achieving your financial goals.
1. Estimate Your Past Savings:
If you have had financial discipline in life and started saving early, it will help you now. Before you retire, you need to consider all your investments and assets in order to estimate the amount you own today. Evaluate your portfolio and determine the amount you have accumulated till date. Now, calculate the amount of savings and investment you will have to make in order to retire early and to be able to maintain the same lifestyle. You will also have to keep inflation and the increase in the cost of living in mind.
2. Invest for Your Retirement:
There are several investment products available in the market which allow you to plan and invest for your retirement. Look at investment products that give a high return and are less risky. Avoid investing in the stock market because the market risk might be on the higher side. Unit Linked Insurance Plan is a widely preferred option for many.
ULIPs is an ideal mix of insurance and investment. Reputed insurers like Max Life Insurance offer many benefits with ULIPs like multiple fund options, switching facility, top-ups, riders and so forth. You just need to pay a monthly or an annual premium out of which a small amount goes towards insurance, and the balance is invested like any other mutual fund. However, make sure to invest in a long-term plan for better returns.
3. Buy Health and Term Insurance:
Nothing is as significant as your health and life. Whatever your age, you need to invest in health insurance and term insurance. If you have not purchased insurance yet, now is the time to do so. Term insurance will cover your life and will provide financial security to your family in case of your untimely death. It provides a life cover at low premiums. You can also check the best term insurance plans in India for your detail analysis.
Health insurance, on the other hand, will provide for your health and will help you get the best healthcare and medical facilities in case of an illness. The cost of healthcare is rising, and if you have a cover, you will be able to get quality healthcare facilities. In simple words, it’s crucial that you invest in a quality insurance plan for a comfortable retirement.
4. Pay Off Debt and Say No to New Loans:
This is one of the most significant steps to take before you retire. You do not want to retire with a pile of debt on you. Plan your monthly outflows and pay off any outstanding debt that you might have.
Make it a point not to take new loans anymore. If you retire with a burden of debt, your retirement period will become stressful, and most of your money will be spent into paying off the amount you owe. Retiring early means paying off the debt and retiring with no burden of the same. You will have to plan well in advance in order to manage the repayments of the outstanding loans from your current salary income.
5. Start A Second Source of Income:
Your salary income will stop from the day you retire; this means you will need an alternative source of income. To ensure that you receive consistent monthly income, you should consider setting up a second source of revenue. You could become a landlord and rent out your property if you have an additional property in the country. The rent income will become your monthly source of income, and you will be able to manage your household expenses from the same.
If retiring before time is on your mind and you have started early retirement planning for the same, keep these five tips in mind. Make a well-informed decision to enjoy the golden phase of your life.