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Thinking about early retirement? What a treat that would be! Read this article to learn about some of the things you need to do to help you retire early.

Article by Akwasi Duodu

How do I retire early?

I think we all secretly dream of early retirement. I often ask people in their twenties when they’d like to retire, and “before I am 50” is quite a popular answer. In reality, retiring early takes planning, sacrifice, careful financial management and the will to start planning early, i.e. in your younger years.

Retiring early is not easy. It is a privilege reserved for those who have planned for it and made the necessary sacrifices.

Quick summary

Here’s a brief overview of what you’ll learn in today’s article:

  • The importance of long term planning
  • A list of considerations to help you retire early
  • The different investments that form a retirement savings plan
  • Reasons to work with a retirement planner

Related reading: How much money do I need to retire?

What age is considered early retirement?

Any age before the state pension age may be considered retiring early. As a result, people often seek guidance on how much money you need to retire at 55 or 60.

The state pension age in the UK currently ranges between 66 and 68.

However, many consider early retirement to start at age 55, when private and workplace pensions become more accessible. Legal and financial implications vary, so understanding these thresholds is crucial.

What do I need to do to retire early?

The first thing you need is enough money!

Start by working out how much you have. This would include personal and workplace pensions, savings and investments and any other assets that could give you an income in retirement.

The second step is determining how much you would need to live on if you retired, i.e., stopped working completely. This shouldn’t be too difficult, and you can do it by making a list of all your likely monthly costs in retirement.

Don’t just include essentials like council tax, utilities, and food. Include non-essentials like:

  • Going out
  • Holidays
  • Entertainment
  • Hobbies
  • Clothing

Whatever may apply to your retired life, and remember that with so much more time on your hands, you’re likely to spend more on non-essentials.

What sorts of assets should I have?

What you want are assets that can be liquidated or used to provide you with an income.

These could include pensions, savings and investments such as:

  • ISAs
  • Savings accounts
  • Stocks and shares
  • National savings
  • Buy to let properties

The more of these you have, the better diversified your portfolio will be; however, there’s nothing to say that having all your money in a pension is wrong.

Unless you are lucky enough to inherit a lot of money, you should have created a well-diversified portfolio of savings and investments in your younger years.

In addition to helping you retire early, the above investments will also help you increase your net worth.

Working with a retirement planner

Knowing how to convert savings and investments into a sustainable income is a complex affair that involves intricate calculations. This is where most people fail, and this is where engaging a financial adviser would pay for itself.

Retirement planners and financial advisers can help you create a plan tailored to your circumstances and goals. A gap analysis tool would identify gaps between where you were and where you wanted to be.

Can they help you achieve an early retirement?

Working with a retirement planner offers many advantages, including:

  • Expert, tailored retirement advice and guidance
  • Managing risk and recommending appropriate investments
  • Long term tax planning and financial protection
  • Reviewing and adjusting your investments where needed
  • Peace of mind knowing you are in the hands of an expert

Furthermore, working with a retirement planner can save you time, so you can attend to your busy life.

How to retire early – summary

If you are planning an early retirement, remember that careful financial management and early preparation are key to achieving this goal.

Additionally, assessing your monthly expenses, including non-essentials, helps you set a realistic budget. Furthermore, it’s wise to diversify your investments so that your golden retirement eggs aren’t in one basket!

Lastly, working with a retirement planner can simplify the process and provide expert guidance as you save for early retirement.

The benefits of early planning and the sacrifices you make pave the way for an achievable early retirement, filling you with hope and motivation.


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