Whether you love your current work or not, it would be nice to at least have the option to retire earlier, go part time, or do something different. And there are definite steps you can take to speed up your retirement by years, or even decades, in some cases.
But, let’s be frank, “retirement” is the biggest expense most of us will ever face. It’s not going to be achieved quickly, even in the most favorable circumstances. Patience is required. And wisdom is essential, to make the right tradeoffs. Often you will be sacrificing today, to enjoy retirement tomorrow. Push that equation too far, and you may be sacrificing quality of life, opportunities with loved ones that will never return, for a distant future that won’t materialize in the way you envision. My advice, when in doubt: make today count, and put off retirement a little longer.
When looking at techniques to accelerate your retirement, the options generally fall into three categories: (1) increasing income, (2) decreasing expenses, or (3) optimizing how you manage your money. Of these, increasing income is generally the most powerful option; decreasing expenses the most common and plentiful option; and optimizing money management the easiest and least painful option. To reach retirement quicker, you will want to leverage all three.
So here are some fundamental steps and financial behaviors you can put in place now that will lead to building wealth faster, and the ability to retire sooner….
- Invest in your career skills: start with an in-demand degree, if possible, and never stop learning. Own the best tools.
- Consider whether you or your spouse can pursue a career that provides retirement health benefits. (Generally public service jobs.)
- Make an ongoing commitment to educating yourself about all personal finance matters, and becoming a confident investor.
- Scrutinize your living situation, and look ahead: do everything possible to stay in one home for an extended period. (This might mean buying a little larger at first, and living more modestly later.)
- Cut recurring (monthly) expenses mercilessly: utilities, insurance, subscriptions, memberships. (The math of financial independence is such that you must save 300x for each monthly expense.)
- Emphasize self sufficiency throughout your life including especially food, health, home maintenance, and recreation.
- Don’t make permanent changes to your lifestyle when raises, bonuses, or good fortune come your way. Enjoy a small splurge, then invest the balance.
- If you have kids, don’t follow the crowd and borrow to send them to pricey private universities, unless that is unquestionably what your child needs to succeed in life.
- Be willing to be different. Don’t get attached to the appearance of your house or vehicles. Cultivate small luxuries to feel pampered.
- Think long term: for every financial decision, ask yourself: “What is most economical in the long run?” Often that means saving longer, and buying quality.