How to Retire Early

How to Retire Early

Retiring early is a dream for many of us, but let’s be honest, it can sometimes feel like an unattainable goal. But the truth is, with careful planning and the right strategies in place, early retirement is within reach. It’s more than possible for you to swap the daily grind for a life of leisure and adventure way before your state pension age.

If you’re looking to retire early and enjoy more of life’s adventures, this blog post is for you. In this guide, we’ll cover some of the essential steps you need to take to retire early, from saving and investing to side hustles and living frugally.

Start Saving Early

While this one might sound obvious, it’s important to understand. The earlier you start saving, the more time your money has to grow. Start by setting a savings goal and determining how much you need to save to achieve this. You can also use retirement and pension calculators to estimate the amount of money you will need to save based on your desired retirement age, lifestyle, and other factors.

You should also look at automating your savings. For example, by setting up automatic transfers from your current account to a retirement or savings account. There’s no doubt that saving as a young adult takes discipline and dedication, but the benefits of early retirement are worth the effort!

Invest in a Retirement Account

Investing in a retirement account allows your money to grow tax-free. Take advantage of any employer matching programs, and make regular contributions. Diversification is key to managing risk and maximising returns. Invest in a mix of stocks, bonds, and other assets to spread your risk and minimise the impact of any individual investment. Your investments can both rise and fall in value. Your capital is at risk

Learn more about how to financially preparations for retirement >

Consider Picking Up a Side Hustle

Having a side hustle that brings in extra income is a creative way to help you reach your financial goal. More and more people are turning hobbies into a money-making proposition, and it’s proving to be very lucrative. According to Workplace Insight, one in five (19%) adults in the UK have started a side hustle since March 2020 and, almost one in six  (16%) claim to earn upwards of £1,000 a month from their new venture. That’s a lot of extra money to put towards your pension pot!

Explore passive income streams

Passive income refers to income that you can earn without actively working or trading time for money. Some popular examples include:

  1. Rental income: i.e rental properties, holiday homes, or even renting out a room on platforms like Airbnb.
  2. Dividend income: Dividend-paying stocks can provide a source of passive income. Dividends are payments made by companies to their shareholders, and some stocks pay regular dividends that can provide a steady stream of income.
  3. Creating digital products: i.e.creating e-books, courses, or stock photography can provide a source of passive income. Once created, you can continue to earn income from these products without additional effort.
  4. Affiliate marketing: Affiliate marketing involves promoting other people’s products and earning a commission on any sales. This can be done through a website, social media, or other channels.

Live frugally

Living frugally doesn’t have to be as bad as you might think. It just means simply being smart with your money and not wasting it on things that don’t align with your saving goals. A simple change in how you prioritise your spending can make a huge difference. Spend your money on the necessities first and cut back on other things that aren’t quite so important. Consider swapping eating out for homemade meals and replacing short Uber trips with a healthy walk. Avoid lifestyle inflation and unnecessary expenses, even as your income grows. Live below your means and save as much as possible.

Invest in high-yielding shares

This type of investment typically offers a higher dividend yield than the broader market, which means you can earn a higher income which can be reinvested to compound your returns over time. Though, it’s important to note that investing in high-yielding shares comes with risks, as with any investment. For instance, high-yielding shares may be more volatile than the broader market, and can sometimes be a warning sign of a company being in financial trouble. As with any investment strategy, it’s important to do your research and invest with a long-term perspective. Consider working with a financial advisor who can help you build a diversified portfolio that aligns with your investment goals and risk tolerance. Your investments can both rise and fall in value. Your capital is at risk

Seek advice from a financial life planner

Another great tip is to work with a financial life planner as soon as possible, getting expert advice on setting up a tailored plan that will help you to reach your retirement goals.

What is a financial life planner?

A financial life planner is a professional who helps individuals and families align their financial goals with their life goals. Financial life planning goes beyond traditional financial planning, which typically focuses on achieving specific financial objectives (such as saving for retirement or paying off debt. It takes a more holistic approach, considering a client’s overall lifestyle, values, and aspirations.

Financial life planners also help clients navigate life transitions, such as marriage, divorce, and career changes, providing ongoing support and guidance as needed to ensure their financial plan remains aligned with their changing needs and priorities over time. The end goal is to help clients meet their life goals, achieve a sense of financial security, and overall peace of mind.

Retiring early requires a long-term commitment and a willingness to make sacrifices in the short term. But with discipline and dedication, it is more than achievable and even more worthwhile.

Make your early retirement dreams a reality with Hansford Bell

Hansford Bell has helped clients in the South West and further afield plan for rewarding and fulfilling retirements. Whatever your ideal destination, our team can help you get there by working out the best way to receive and manage your provisions. Contact us today to find out more – let’s get planning for your future!

Your investments can both rise and fall in value. Your capital is at risk.

A Fresh Approach to Financial Planning and Advice.

Hansford Bell aren’t your average team of financial specialists. We take the time to get to know our clients and help them realise what they want from their life, whether that’s a personal ambition or a financial goal.

Our planners are highly experienced and know the industry inside-out. We combine simplified, straight-forward tips and guidance with cutting-edge technology and a comprehensive understanding of your situation. We focus on your finances, so you can focus on living your life.

Want to know more? Talk to us today and we can start making that dream future a reality!