How to retire early
Although there’s no official “retirement age” in Australia, it’s only possible to withdraw your super after you’ve reached your ‘preservation age’ (55 to 60), depending on when you were born.
However, most people consider retirement age to be around the 65 mark – and indeed many people think that that’s when we have to retire.
But what if you can retire earlier than when you reach 65 years of age?
A dream? Maybe. But dreams are there to become a reality – especially if it’s something that you truly desire.
If you want to retire early, you will need a lot of discipline to earn, save, and invest as much as you possibly can.
You will also need to ensure you have another means of income if you’re not eligible to access your super.
Below is a list of what you need to achieve in order to retire early.
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Define what early retirement means to you
It could be not working at all or reducing hours to slowly start spending more time with the family or doing things you love.
Whatever it is, you have to define it clearly so you know the goal.
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Understand your living costs
Currently, living costs are soaring so it can be difficult to understand your expenses perfectly.
However, if you can map out what you spend money on or what you don’t need anymore as clearly as possible, it can help you in the future.
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Calculate your total retirement savings goal
Following up from the last step, you will need to figure out how much money you will be actually spending on these expenses.
You will need to remember that if you’re retiring earlier then you need your money from savings or super to last longer.
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Make a financial plan
Putting everything together in a financial plan is often the best way to figure out if you can retire early.
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Grow your super
Even if you can’t access your super just yet, did you know you could still make contributions to it?
So if you’ve decided to continue working fewer hours, you could contribute more of your income into your super.
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Stick to the plan
As mentioned above, it takes a lot of discipline to retire early and it’s important to stick to your plans.
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