Are your retirement plans set? Are you going to call it quits when you turn 65 and spend your goldenyears traveling the world, lavishing your grandkids with gifts and good times, and spending your down time relaxing in the sun by a crystal-clearpool? It sounds great, doesn’t it? Of course, retirement is different for everyone, and it is becoming more difficult to live the same lifestyle in retirement as one enjoyed while in the workforce. In fact, many people are forced to put off retirement for several years past their 65th birthday. That being said, how do some people call it quits at an even younger age?
It Takes Sacrifice
While many people find it difficult to retire when they reach 65, there are others who walk away at a much younger age – some even by the time they reach 40. How do they do it? It takes a lot of hard work, discipline, and of course great sacrifice, but it can be done. Just take it from some of the people who have pulled it off. The key is giving up certain lifestyle habits that enable you to invest more money into your future. What kinds of things must you give up?
• Pointless Spending – Even if you have money to burn, mind lessor reckless spending can catch up to you. This is a habit that you must break if you want to retire early. You must set a budget, stick to it, and always track your spending.
• Living It Up – It’s hard not to spend, especially when you get an increase in your income. Most people like to live a fancy lifestyle to the degree their income will allow, but if you want to retire early, you have to think differently. Get a raise? That doesn’t mean it’s time to boost your spending. Instead, it’s time to increase your savings.
• Big House – Bigger is not always better. While living in a large home with a lot of space can be very enjoyable, it’s important to consider carefully how much space you really need. If you want to save more money for retirement and hang ‘em up early, then downsizing is a great way to do it. By living in a smaller, more affordable home, you can increase your savings significantly.
• Being a Showoff – We all like our toys, and we especially like to show them off to our friends and neighbors, but that’s no way to retire early. Don’t allow what your friends and neighbors think of you determine your happiness. Money doesn’t equal happiness; so don’t spend to impress others.
• Expensive vehicles – if you don’t need to own a vehicle, then give it up. Even if you do have to own one, you can keep it simple and avoid extra debt and spending by steering clear of fancier models.
It may not be easy to retire by the time you turn 40, but if you apply yourself and you’re willing to sacrifice, then the possibility exists. So how soon do you want to retire? It’s up to you to make it happen.
The post Top Habits to Ditch to Retire by Your 40th Birthday first appeared on Advisors to the Ultra-Affluent – Groco.
