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Prepping for retirement: How can you get there faster?

posted by Chris Valentine

It might not be at the forefront of your mind during the early stages of your career, but after a few years it would be fair to say that everyone has at least one eye on a faster retirement.

Of course, with the media constantly reporting that the retirement age is actually going the other way, this seems like a tall order.

The way around the matter is to take things into your own hands. In other words, while the authorities will look after you in some regards, you’ve also got to do some “extras” in a bid to have enough money to get there earlier than everyone else. Here are some hard and fast ways to help you along.

Make sure you understand your future financial position

First and foremost, retiring early isn’t ALL about putting sufficient money in the bank. It’s also about understanding where you sit with your future financial position.

For example, for years you may have been paying your mortgage off. When it comes to retirement, this expense might not exist, which is of course great to hear.

Not everything works like that, though. For example, take the cost of a funeral. It’s not the nicest subject to talk about, but it’s something that needs budgeting for. Will your finances be in a position to cope with such events?

Stop your lifestyle spiraling with your earnings

If you’re lucky enough to get pay rises in your working life, then make sure you make the most of them. Quite often, what a lot of people do is start to increase their spending. It’s a natural reaction, but if you are serious about getting into the game of early retirement, this is something that needs to stop.

Instead of spending, turn to investments. Over the long-term, dedicating this additional money in this way could knock years off your final retirement age.

On the subject of investing…

There’s no doubt that we could write an entire book, and more, on the subject of investing. It’s something that needs to be at the forefront of your retirement plan. While just saving money in a bank account is admirable, over time you will lose out to the power of inflation and it’s going to be really difficult to make an impact on your retirement date.

Instead, invest as often as possible. Compound interest will kick in, meaning that the sooner you start investing, the more money you are going to make.

Eliminate your debt whenever you can (but in the right way)

Approaching retirement with a boatload of debt is asking for trouble. Instead, you should be aiming to be debt-free during this period or, failing that, you should at least be paying off the high-interest loans you have.

For example, the mortgage tends to be the first thing that most people target. However, this interest rate could be much lower than other loans you have taken out, so a bad move here could cost you more and hinder your retirement plans.

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