Decide how old you want to be when you retire?
Defining what early retirement means to you is the first step in planning for early retirement. The additional years until retirement can have a significant impact on the amount of income required. For some people, early retirement might mean being 45 years old, while for others it may mean 60 years old. You should then consider how much you need to save and what your expenses might be. A rough rule of thumb suggests that you can withdraw about $4,000 annually for every $100,000 saved. If you think you’ll spend $40,000 a year, you’ll need to save a million dollars. This simple rule is not precise and does not take into account actual figures for taxes, inflation, and other income sources like Social Security, but it serves as a starting point.
“Will you work” after retirement?
Early retirement is, on one hand, a time when you no longer have to work at your current job. But you may still want to earn income through a new job, hobby, or passion. For some, this means they’ve reached a point where they will no longer work in life for money. There are many reasons that drive some people to continue working after retirement. You should consider the reality that many people who planned to work after retirement do not succeed in doing so in the end.
Invest with income ideas in mind
Once you’ve arrived at the amount of savings and future income you will need, the next step is to invest with that goal in mind. Spend some time researching ways you can invest and organize your savings to generate steady income. Now that you have a specific amount and timeframe in mind, you should be able to create a portfolio that best suits your needs.
Source: https://www.thebalancemoney.com/plan-for-an-early-retirement-2388827
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