On average, the retirement age in the U.S. is 63, according to data from the U.S. Census Bureau. But many people have the desire to ditch their working days well before then.
While there are several pros to retiring early — including the chance to travel or launch a new business, according to Investopedia — it’s not always easy to do. A recent survey found that many Americans are unprepared for retirement.
Still, if you want to put your full-time working days behind you sooner rather than later, there are some simple steps you can take to get there. Here are a few from experts who spoke to Cheapism.
Live below your means
This one may seem like the most basic of financial advice, but if you want to retire before your 60s, it’s a good step to take. Instead of upgrading your lifestyle when you get your next raise, keep things simple.
“While some minor upgrades can be okay, the goal is to live below your means,” said Invested Wallet founder Todd Kunsman. “This allows you to save money, have a nice cushion, and not get trapped in the overspending on material things. Many millionaires don’t look or act rich. That’s because they have the right mindset to protect their money and not go into debt.”
Move to a less expensive area
In addition to living below your means, you may want to reevaluate where you live.
For starters, check to see if your home is listed among the most expensive places to buy a house in Atlanta. If it is, consider living somewhere that’s been deemed more affordable and put the savings toward your early retirement.
Begin a side hustle and invest your income
There’s a lot of chatter about side hustles, particularly amid the coronavirus pandemic. Taking on another gig outside of your full-time job can provide extra income that can be used to invest so you can have more money to retire sooner.
“By harnessing compound interest, where interest is applied to accumulated growth in addition to the original investment, Amy’s money grew much more than Jackie’s by simply starting 10 years earlier,” John Deglow, a fiduciary investment advisor at Unified Trust Co. told U.S. News in an example of two investors.
Enroll in an employee-sponsored 401(k) plan
If your employer offers a 401(k) plan, check to see if they match your contributions. If they do, make sure you invest at least as much as they match.
“The percentage they match your investment is like free money from your employer,” financial coach Karen Ford told Cheapism. She suggests you ought to eventually invest 15% of your income in a 401(k) or Roth IRA.
Exercise and eat well
Perhaps a surprising way you can head toward early retirement is also a method that could help you live better.
A study from the American Heart Association found that spending 30 minutes or more engaging in some moderate-vigorous physical activity about five days a week was linked to less health care costs and a favorable quality of life.
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