If you’re like most workers, you want to retire early and enjoy life after work. You can see visions of yourself relaxing on the beach with a drink in your hand and not a care in the world. However, the only way you’ll be able to reach your retirement goals is if you start making preparations as soon as possible. Although retiring early might seem out of reach, it is possible if you prepare.
What’s one of the best ways to ensure a healthy, happy, early retirement? Personal finance expert Lynnette Khalfani Cox (also known as The Money Coach), told The Cheat Sheet it’s imperative to have a solid back-up plan. Even if you have it all figured out and you’re on track for an early retirement, life happens. So make sure to have a backup plan.
It’s important to have a Plan B and to prepare yourself for a host of unexpected challenges. For example, what would you do if you got laid off from a job — well before you were ready to retire? Likewise, how would you handle it if you had to become a caretaker, perhaps to an aging parent, and that took you out of the workforce prematurely? Also, what about your investments? Could you tolerate a major drop in the stock market? If not, perhaps you should have a more modest investment portfolio and not one that’s overly aggressive or with too much exposure to stocks. Overall, don’t just think everything will go 100% smoothly and according to plan.
Are you itching to retire early? It could happen. Here are nine secrets to an early retirement.
1. Move to a low-cost city
It will be harder to save for an early retirement if you live in a city where the cost of living is high. And once you do finally retire, you’ll likely blow through your money in no time and have to return to work. When daily living costs are through the roof it can quickly eat up your money.
One of the best things you can do for your nest egg is move to a city where you can enjoy a low cost of living, advises John Barnes, certified financial planner and founder of Annuity Assistant. This way, your hard-earned cash will go a lot further, and you’ll be able to build your retirement fund with less financial strain.
“That move can have a major, positive impact to your ability to retire early. Of course, you will want to make sure there are adequate health care facilities and other resources in your new area,” Barnes told The Cheat Sheet.
Next: How waiting five years could cost you $56,066