Everyone dreams of retiring early, but few people actually do. Why? Because it takes a lot of planning just for a traditional retirement, but even more planning for an early retirement. However, it is possible!
Here are some ways you can get started in making your early retirement dream a reality.
Change Your Mindset
If you plan on retiring early, then you will need your funds available sooner and you will need them to last longer. Changing your mindset is a great tip when learning how to retire early.
One way to do this is to contribute money to traditional retirement accounts, while also making smart investments. Investments such as:
- Real Estate
It is very important to educate yourself before making investments. Talk to a professional to receive advice and guidance on how you should invest your money for early retirement.
Very few companies offer this opportunity today, but if your employer does offer a defined benefit pension plan it can be beneficial to take advantage of this investment. Some state and government agencies such as the police, fire department or the military usually will offer this type of plan.
A pension plan begins payment as soon as you leave your employment, but some will even let you begin payments before age 59 ½. A great pension plan could be enough to fund your entire retirement.
Tax Exempt Bonds
Tax-exempt bonds such as state and municipal bonds offer a good return on your investment while also remaining exempt from federal income tax. Municipal bonds purchased in your state also allow these bonds to be exempt from state tax in addition to federal tax.
U.S. Treasuries Bonds
U.S. treasury bonds are a different kind of bond, and while they may give a lower yield, they are very secure investments that can benefit early retirees. These bonds offer a small rate of return, but are safe and very tax efficient.
If done properly, stocks can be a great investment to help you retire early. Some stocks are high risk, and others are lower risk. It is important to consult with a professional before investing if you are not yet experienced.
Investing in stocks can be a great way to build wealth over time to fund your retirement.
Real estate is a great way to build wealth because of the great income potential. If done properly real estate can be one of the best rates of return funding your retirement. There are so many different ways to invest in real estate.
From buying a home to renting out an apartment, your options of real estate investments are broad. If you’ve ever thought about investing your own money, investing into a house can be a great option if done at the right time. The investment in a home might not pay off for a few years, but when it does, it could mean the difference between an early retirement and working the full length of your career. This can be true if you’ve invested in multiple rental properties.
Whatever investments you choose to make, we advise meeting with a professional to help you with your retirement goals. They can help you make wise choices and avoid making mistakes!