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Want to Retire Early? Here Are 14 Signs It Will Probably Happen to You

Are you itching to retire early? If you are, there are a few factors that might indicate whether you’re well on your way to leaving the workforce for good. There are also some indicators that you’re definitely not going to retire early. The most obvious sign is if you’re not saving at all. Surprisingly, a good amount of employees aren’t giving retirement a second thought. Roughly 80% of Americans are employed at a company that offers a retirement plan; however, only 32% of employees are actually participating, according to Census Bureau research.

There are some good, bad, and unusual reasons why you might make an early exit from the workforce. Here are 14 signs you’re going to retire early. How many apply to you?

1. You start contributing early

man working on computer

man working on computer Contribute to your retirement as soon as you start working | iStock.com/warrengoldswain

The earlier you start saving for your retirement, the better. As discussed earlier, you can take advantage of catch-up contributions if you’re age 50 or older. But it’s a lot harder to make up for lost time because you’ll have to save a lot more in a shorter amount of time. You’ll also lose out somewhat on the power of compound interest (when your interest begins to earn interest). The experts at Investopedia put it this way:

The rate at which compound interest accrues depends on the frequency of compounding; the higher the number of compounding periods, the greater the compound interest. Thus, the amount of compound interest accrued on $100 compounded at 10% annually will be lower than that on $100 compounded at 5% semi-annually over the same time period.

A person who invests $5,000 annually between the ages of 25 and 35 will have an estimated $563,000 at age 65, assuming a 7% annual return. By comparison, a person who invests $5,000 between the ages of 35 and 65 will have about $58,000 less. It literally pays to start early.

Next: How does your job affects your retirement date?

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