How to Retire Sooner

Avoid Carrying High Interest Credit Card Debt

If you are carrying high interest credit card debt you are holding yourself back from an early retirement. Debt and most specifically credit card debt (let’s be real it’s basically the worst kind of debt you can have) will prevent you from investing more. Not only will it prevent you from investing more but since you are effectively wasting money on interest payments, it will also require your portfolio to outperform your peers. That’s just in order to help make up for the losses from interest payments and the opportunity cost of foregone capital gains you would have, had you invested that money in the first place. In other words, because you are carrying unsecured credit card debt, your investments have to be that much better than your peers in order for you to retire at the same age.

Every dollar you make towards interest payments could have gone towards investing for your retirement and every dollar you would’ve invested would have grown! This isn’t something that most hopeful retirees tend to think about because it’s not readily apparent but it is important and something everyone who is nearing the retirement age should consider. Your goal should be to have as much passive income and investments to lean on as possible. So, in the case you have an emergency or have some unexpected expenses arise you can handle whatever issues come your way.

Not Having a DIY Attitude

We are all different people with different interests and different levels of output. However, if you want to retire quicker a surefire way to do so is to do more things on your own. If you have skills and a willingness to learn and fix things around your home you should consider this before always hiring help. If your sink is leaky or you want to install new equipment, attempt to do it on your own before calling to pay someone to do it for you. Things need to be fixed and every dollar you save by fixing a problem yourself can go towards retirement! I know this might not be our first instinct but if we skills that can save us money, it can’t hurt to try using them! This is especially true if you don’t feel like you’re financial prepared for retirement.

Selective Investments

If you plan on retiring, following financial markets will help you understand your portfolio and ideally make the best judgement with regards to it. Knowledge is power and anytime you are informed about current events and how they might impact your portfolio and assets, you’ll be all the better for it. Be sure to stay informed about geopolitical happenings and how they could potentially impact your portfolio and therefore your retirement.

Tax Incentivized Accounts & Benefits

Allocating funds towards tax incentivized investment accounts can be extremely beneficial for your retirement planning process. Make sure you speak with a trusted tax advisor for the biggest and best tax incentivized retirement moves you can make. If you have a 401k prepare and plan for how you plan on withdrawing it in order to cost effectively reduce your tax burden and income during your planned retirement. You can also consider diversifying your tax incentive accounts with different accounts like a Roth IRA, 401k and traditional IRA (depending on what is best for you and how far away you are from retirement).

These are all considerations you should make if you want to retire early and in this day and age, retiring early might not be such an easy feat! Hopefully it gets easier for us all.