With the average age of retirement currently up to 62 and younger Americans expecting to retire before 55, there’s both the reality of an increased number of working years and also the optimistic expectation for a shorter working life. To retire by 40, it takes years of careful planning and sacrifice to accomplish. Even with careful planning and sacrifice, the condition may not be ripe for retirement. So how can you make it happen for you?
Below are the Tips to Retire by 40
Tips to Retire by 40 – Start saving early
Tips to Retire by 40 start with taking of advantage of compounding, which means that you have to start saving early and saving aggressively. Most people know that compound interest can kill them when it comes to credit card debt. What they don’t know is that compound yielding is what makes all the difference when it comes to retirement savings. Put simply, your money will start making money and that money will make money and so on.
Tips to Retire by 40 – Save as much as you can
Tips to Retire by 40 – Control your spending
In your 40s you can readjust your life in several ways. You can reduce your expenses to really minimal amounts to just have the basic necessities to take care of. In a sense, everyone has to do this when retiring. It’s a general rule of thumb that you have to reduce your expenses by around 30% going into retirement. However, there are ways to reduce your expenses even more drastically without making major changes in your overall quality of life.
You need to have health care and a place to live that doesn’t cost too much. If you’re not traveling, not indulging in luxuries and just paying for the basics, you can get really inexpensive. Southern California is nice, but it’s much more expensive than Tuscon. If you live somewhere that you can ride your bike all year long, you can lower expenses that way. You don’t need a giant cache of money to do that.