October 1, 2020
Clear debt

Surprising Facts About Early Retirement

Clear debt

Besides planning for an early retirement, you need to plan for a meaningful retirement.

What’s the secret to longevity? It’s having a sense of meaning and purpose. When you’re working and raising a family, you have a sense of direction.

Unfortunately, most people who retire lose all sense of drive. They feel aimless. They spend their days on chores and reflecting on how things could have gone better for them if they had made better decisions in the past.

Set Goals and Make Plans

You need to have all sorts of goals to create a meaningful life. Goals for your health, your wealth, and your relationships. Make these goals before retirement and continue them after your retirement.

When you set goals, then you’ll figure out the best plans to achieve them. While not all your plans will pan out, you’ll be able to revise them until they you find the critical few that will work.

Goals and plans are the building blocks to creating the life you really want to live. Without them, you’ll drift aimlessly.

Take Care of Your Insurance Needs

You’ll need to find out about Medicare, health insurance, and life insurance. One useful resource to get a free quote and more information on how to get the insurance you need is PolicyZip.

Are You Contributing to Your 401(k)?

Find out if your employer has a traditional 401(k) plan? If your company offers this plan, you can use it to contribute money before taxes. This will give you a huge advantage.

Let’s suppose you’re in the 15% tax bracket. After you figure out your family’s budget, you find that you can contribute $100 every pay period. Since this money will come out of your salary before taxes are assessed, your take home income will drop by a mere $85. Now multiply the effects of doing this every paycheck. You’ll hardly notice the difference in your monthly budget, but it will make a huge difference to your retirement savings.

Clear Your Debts

All of us spend much of our lives in one kind of debt or another, but you should aspire to be debt-free by the time you stop working. If you make a concerted effort to clear all debts before you retire, you won’t have to skimp on all the things you want when you retire.

Here is a simple 3-step process to clear your debts:

  • Make an inventory of your debts.
  • Calculate how many months or years you have on your debts.
  • Adjust your monthly payments to take care of your debts to clear them before their deadlines.

When you have no debts in retirement, you will have fewer transactions to worry about each month. This will assure you peace of mind.

Consolidate Your Financial Accounts

While there are many reasons to feel financially overwhelmed, one reason to feel a little scatterbrained when it comes to money is that you just have too many bank and investment accounts.

Simplify your financial life by liquidating most of them and moving the money to a few primary accounts. For instance, you may just need a savings account, a checking account, a brokerage account, and a single credit card account. When you consolidate your money, you will have fewer statements to read, fewer balances to manage, and fewer places to log-in.

In summary, don’t simply aspire to retire early but also aim to enjoy a meaningful retirement. Some things to take care of to assure an early retirement include setting goals, getting insurance, contributing to your 401 (k), clearing your debts, and consolidating your financial accounts.

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