For the longest time, people lived with the notion of a rigid retirement age of 65. However, nowadays, retiring early has become a popular alternative for many.
But why should you retire early?
Well, there are multiple benefits involved. Not only does retiring early leave you with spare time to pursue your passions that are unrelated to your career, but it also allows you to eliminate workplace stress and spend more time with your family.
So if you are someone who has these on top of their priority list, read on to find out 5 ways to retire early.
Determine your retirement budget
Practically, the first and foremost step would be to set a retirement budget for yourself to see if you can afford to retire early. Following are a few simple steps that can alleviate future financial stress:
- Collect your financial records and list down your fixed and variable expenses. Take ample time doing this to make sure you don’t miss out on anything.
- Identify all possible sources of retirement income, including savings, social security payment, and other part-time ventures.
- Compare your expenses to your income.
- Keeping your desired post-retirement lifestyle in consideration, see if you need to make any adjustments.
Keep in mind that there are some factors you must consider while planning your retirement budget. These include inflation, pension distributions, and taxes. Doing so will ensure that you make a fair judgement about your retirement budget.
2. Have ample savings
In order to ensure a comfortable and stress-free life after retirement, you must have sufficient financial sources. There are multiple ways to maximise your savings so that you can sustain yourself in the future:
Downsize your home
Downsizing can be a smart way to save money. Not only does a smaller house demand a low initial cost while setting up, but it also has the added benefit of low maintenance costs. Here are some must-know downsizing tips you should be aware of.
Have a simplistic lifestyle
Retiring early is a luxury in itself. But in order to experience that luxury, you would need to sacrifice other luxuries in your life. So avoid unnecessary expenses by spending in a mindful way.
One easy way to do this is to set your monthly budget according to the 50-30-20 rule. This means that you should allocate 50% of your budget for the things you need, 30% for the things you want, and the remaining 20% for savings. This way, you will avoid the nasty habit of overspending.
You can multiply your bank balance by making smart investments. These, in turn, will give you a sense of financial security after retirement. To help you, here are the best investments for retirement in Australia.
3. Join a retirement community
Retiring can be an overwhelming process as it is a major life transition. Make it easier for yourself by joining a vibrant retirement community. Not only do these close-knit circles provide a sense of safety, but they also come with endless amenities. These commonly include tennis courts, swimming pools, business centers, and walking tracks.
If you have the financial means but are hesitant to retire, a retirement village (like this example of a Sydney retirement community) might just be the solution you need to make the transition.
4. Have multiple sources of income
Once you’ve a retirement budget in hand and have cut down your expenses, it’s time to diversify your sources of income. Here are three side hustles that you can easily start from the comfort of your home:
Rent out your vehicle
If you have an extra car catching dust in your garage, you can turn your junk into gold by making money through car rentals. In Australia, you can put your car up for rent using apps such as Turo, Drive My Car, and Carhood.
Start a YouTube channel
If you are someone with a creative personality, you can start your own YouTube channel and make a considerable sum through ad payments. The possibilities are endless and your channel can be about anything from educational videos to cooking classes to a lifestyle vlog. To make it easier for you, here are 17 YouTube tips to grow a new channel in 2023.
And in case you’re wondering, YouTube’s average payout rate is $36.21 for 1000 views in Australia.
Freelancing provides a great opportunity for retirees to stay productive while simultaneously adding to their income. The easiest way to launch a career in freelancing is to make a profile on platforms such as Upwork or PeoplePerHour. Then, you can take up projects as per your expertise and make money from the comfort of your home.
Some jobs you can take up include writing, social media management, and video editing. If you’re wondering how much a freelancer makes on average in Australia, the answer is $53.71 per hour.
So, if you haven’t already, you need to seriously consider freelancing as a stable source of income.
5. Consider retiring overseas
Do you want your retirement years to be marked by a peaceful retreat while saving up on living costs at the same time? Well, then you should definitely think about retiring overseas.
Depending on your choice of location, you can enjoy significant savings in terms of housing, medical bills, and other everyday expenses.
Some affordable places to retire overseas are Pattaya (Thailand), Chitré (Panama), Popoli (Italy), Da Lat (Vietnam), and Medellín (Colombia).
These places offer one of the world’s highest qualities of life at one of the lowest costs.
With the never-ending scope of opportunities in today’s fast-paced world, retiring early has been made simpler than ever.
Using our 5 effective ways to retire early, you can sit back and enjoy your time without the stress of having a 9-5 job consuming you.
To make this journey an experience to cherish, read about our 5 best tips to enjoy retirement. After all, retiring early gives you all the time in the world to finally put yourself first.