Most people foresee working till they are 60 or older and then retiring. For some, however, developing a strategy to retire early is viable.
The idea of early retirement has not only become more attractive in recent years, but also more possible. Much of the reason has to do with changing lifestyles and even the changing work environment. The image of retirement in the past was usually the gold watch after a lifetime of hard work for a single employer, and then spending the declining years in a rocker on the front porch watching the grandchildren play. Put simply, this is not happening that much anymore.
Retirement is beginning to be a true Golden Years experience for many people. Such financial instruments as Roth IRAs and Tax Deferred Annuities have made it possible to arrange substantial retirement income. The growth of full service active retirement communities have made more people desire a bid more reward than the gold watch and a pat on the back at the end of their work careers. As retirement becomes more and more attractive, the urge to begin it even sooner becomes attractive as well.
The key to early retirement planning is usually going to be planning early. The sooner in your work career you begin an aggressive retirement planning process, the sooner you will realize an accumulated income that will allow you to retire. More and more people are beginning to view retirement as something that is possible in their forties and fifties. People willing to semi-retire and continue working on a part time or reduced hours basis are finding this option more and more available.
One of the elements of early retirement planning is the willingness to sacrifice a little now in return for later. This principle can be applied to almost every aspect of your life. It can be reflected in more contributions into long term investments. It might mean a willingness to live in a smaller home and use the money that is saved on mortgage payments to fund an annuity. It might even involve moving to an area where the tax structure is less restrictive and once again investing the savings in long term investments.
It is not necessary to live like a monk in order to pull this off. This is especially true when the idea takes hold at a younger age. If you take a look at some calculations on how investments can potentially grow over a twenty year period, you will see how just a little bit extra now going into investment and savings will result in much more later. It is important to make sure your risk management elements are covered. It is not wise to find your extra investment capital by scrimping on Life Insurance, Health Insurance, and even Long Term Care Insurance. A desire and a plan for early retirement do not negate any of life?s uncertainties.
