5 tips to help secure an early retirement

November 3, 2015

5 important tips everyone needs to know in order to secure an early retirement

Some people worry about the idea of retirement, while others want to retire as early as possible. If you'd like to stop working early in your life, you have to plan.

With a little foresight and extra planning throughout your career, however, you can find ways to retire earlier than most people. Here are five financial tips to help you secure an early retirement.

5 tips to help secure an early retirement

Calculate what you'll need

This part can be a little tricky, but is the most important part of securing your financial future. You have to calculate exactly how much you and your family will need to fund your lifestyle for as long as you live.

The trouble is that no one knows how long they will live, but it's best to assume you have a good deal of time ahead of you . That way you'll be able to stretch the money as long as you need instead of running out as you get older.

The best way to do this is to multiply the amount of money you are currently spending each year to support your lifestyle by the number of years you have ahead of you.

Stop spending

The next step is to take a look at your daily habits and your lifestyle in general. What do you spend the most money on? How could you find ways to cut down your daily or monthly expenses?

Living frugally is one of the best ways to guarantee an early retirement. You don't have to cut out everything that you love, but you can find ways of enjoying your lifestyle in a more cost-efficient manner. It can be as simple as making coffee at home instead of buying it on the go, or biking to work instead of paying monthly car payments.

Start saving

Now that you've cut down on your spending, open a savings account for your extra cash. It's great to find a low-risk savings account that you can depend on.

Set up automatic deposits if you can, so that the money will automatically be deducted from your account without you having to think about it.

Find a job with great benefits

Working for a company that covers all of your medical expenses and also has a great Registered Retirement Savings Plan (RRSP) plan will be a great asset in your plan to retire early. Many big companies will match your contributions so that you get double the money. Some also offer options when it comes to your pension, giving you the choice between a lump-sum pension and a monthly pension.

Invest wisely

If you are planning to invest some of your savings, make sure you are well-educated on the different types of investments, so that you will make wise decisions. Talk with a financial adviser before making any big decisions about investments.

Remember that investing money over a long period can possibly bring about more financial risk than short term investments, so be sure to properly research your investment opportunities first. There are many helpful online resources to guide new investors so take your time to look into the different options.

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