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That's true in
some ways, but what if you had more control over your own retirement than you realized?
What if there were some practical things that you could do that would enable you to retire
closer to 60 instead of 70? While we can't control the economy around us, there are some
practical financial things we can do to round down our retirement age. (See
also: Retirement Planning if You're Under 30)
2. Start Early
Starting to plan and save for retirement in any capacity is far easier in your mid-20s than
your 40s or 50s. The earlier you start, the more time your money will have to accumulate
and grow.
In the retirement calculator above, the starting age was set to 27. Knock that number down
to 24, and you can get away with saving 19% instead of 21%.
Our habit is to increase our income and upgrade, always hovering at the ceiling of what we
can afford. If you get to a certain point where you're content with your lifestyle and living
situation, stop upgrading when your salary increases, and instead, save that increased
amount every year as a lump sum for your retirement accounts.
If you've been saving 21% of $35,000 (or even 15%), it's okay to loosen up a little. But
keep your eyes on the prize. (See also: Lifestyle Inflation: The Ultimate Money Trap)
Keeping your living expenses capped will allow you to put more money aside for retirement
and contribute more to investment accounts or a 401(k).
Stay practical for this one.
Start with a simple budget plan and then carve out unnecessary expenses. You also can
work to lower your utility bill, which can save anywhere from $30 to $100 per month. (See
also: Save $1,500 a Year in 15 Minutes)
If you have a 401(k) and can afford to contribute more, try to contribute as much as your
employer will match.
If you're able to contribute an extra $1,500 a year total (starting when you're 25) that will
give you roughly an extra $15,000 a year to live on if you want to retire at age 60.
A Roth IRA is a retirement account that allows you to contribute after-tax money. The
appeal over a traditional IRA is that withdrawals won't be taxed in retirement, and that your
contributions can be withdrawn anytime without penalty (with some caveats), for
emergencies.
Planning Ahead
The most important thing you can do when it comes to securing your retirement is to do as
much advanced planning as you can. While certain things can't be predicted, like exact
living expenses or the cost of insurance, you don't have to wait until your 50s to start
putting money away.
Be prudent (Judicious Farsighted Practical) when you're still young, and you'll make an
early retirement far easier.
Do you have other ideas on how to retire early? Let me know in the comments below.