Early Retirement Planning Recommendations

It takes a diverse strategy to be ready for early retirement. Before deciding on a retirement plan, an individual needs to be sure they have a steady source of income.

Some people may envision early retirement to be full of leisure and self-satisfaction. Others may imagine a series of whirlwind decades packed with travel and other life-enriching events. Either way, they’ll want a dependable source of income to continue living the way they want.

Private equity principal Mark Hauser advocates partnering with a licensed financial advisor to reach this aim. A financial expert will assess the individual’s living status, financial demands, and sources of income.

In addition, the advisor will go through the importance of making provisions for unanticipated life occurrences. For an individual’s early retirement client, the advisor will develop a specific investment plan based on the findings of the analysis.

Retirement Has Two Stages

The term “early retirement” often refers to retiring before age 65, the customary retirement age in the United States. The FIRE (or Financial Independence, Retire Early) investing plan is widely used to support this early retirement timetable.

The FIRE approach is built on a sound financial footing. The philosophy’s central tenet, however, is financial self-sufficiency. If you have a well-thought-out plan, you can work when and for whoever you choose.

This technique is a good idea to separate retirement plans into two discrete periods. An individual can have more peace of mind knowing that every aspect of retirement is taken care of if they have a well-defined strategy for each stage.

The Pre-retirement Stage

Everyone should have a personal vision in mind before beginning on the early retirement route. Once having a clear picture of what you want to accomplish, you can more accurately estimate the financial resources needed to make it happen.

Prioritizing Activities That Make You Happy

Financial advisors agree that anyone considering early retirement should know precisely how they plan to fill the time they used to spend working. Mostly, individuals don’t appreciate the long-term social and emotional rewards of having a successful profession.

These people should consider whatever part-time occupations or volunteer possibilities they enjoy to stay connected to the outside world. If they plan to go on a trip, they should describe it in detail.

Keeping a Steady Flow of Money Coming In

Many early retirees prefer to work part-time or in the gig economy to maintain their lifestyles after they have stopped working full-time. As a result, people don’t have to save as much money before leaving their occupations. In an ideal world, they’d put as much as possible of their present salary into a retirement savings account. As a bonus, several part-time jobs offer health insurance coverage.

However, early retirees should remember that many part-time occupations don’t provide scheduling flexibility. Employees who wish to take personal time off for vacation, socializing, or taking care of business may find their employers less accommodating.

Creating a Steady Flow of Passive Income

Early retirees can increase their financial security while having greater control over their quality of life by establishing one or more passive income sources. According to Mark Hauser, investments in real estate, such as house rentals, may provide a reliable income stream. Renting out unused vehicles and equipment might bring in additional revenue as well.

An in-demand service or personal interest may be turned into extra income for the creative early retiree. Creating an online course is one such example.

Increasing the Savings Rate

Many people plan to retire early while still employed and earning an income. Setting up an automatic savings plan is the most efficient strategy to increase your retirement fund. A savings plan enrollment process might be handled by the firm’s human resources or payroll departments.

Paying off large debts, such as vehicle loans or credit card bills, is a standard part of early retirement planning. Immediately after a person has paid their monthly bills in full, they should transfer any spare money into their retirement savings account. The money you get back from the IRS is something you should put into your retirement savings account as well.

Developing a Social Security Strategy

Social Security payments are part of preparing for early retirement. Many start taking their benefits as soon as they are eligible for them. However, they will only receive about a third of what they would have gotten if they waited to take advantage of the full advantages.

Retirees can use the Social Security website’s planning tools to figure out when to start receiving payments. In Mark Hauser’s opinion, it is best to talk with a financial counselor knowledgeable about the Social Security program. This experienced specialist can offer suggestions on postponing payments until a more convenient time to withdraw them.

Taking Charge of the Housing Crisis

Major house repairs should be taken care of while homeowners still make a consistent income. Mortgages should be paid as soon as possible if they can afford to do so.

In the long run, downsizing your house is an excellent investment. The monthly mortgage payment would be reduced to a large degree. There would also be a reduction in property taxes and home upkeep costs. If early retirees downsize, they may be able to use the proceeds from the sale of their property as a supplement to their retirement savings.

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Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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