The Best Ways to Retire Early

Are you looking for ways to retire early?

If, like me, you are a member of the "Baby Boomer" generation, born sometime between 1946 and 1964, then its never too soon to be thinking and planning for your retirement.

Wouldn't it be nice to have the opportunity to retire while you are still young enough to enjoy it?

Here's a guide to help show you the best ways to retire early, and some simple steps that anyone can take, in order to exit the monotony of the 9-5, Monday to Friday routine.

Take a moment to jot down some numbers

Ask yourself this question, what level of income are you going to need to enjoy your Retirement?

Sounds simple enough, but getting this right is critical to your ways to retire early.

So grab a pen and paper, write down all your expenditure for the year, don't forget things like car, house and medical insurance.

Once you have everything written down, cross out any that are work related, or that you really could do without. Do you really need two cars now, for example, when neither of you needs one for work?

Don't forget to include enough in the budget for socialising a little - keep the gym or golf club membership, too. After all there is no point retiring if all you can afford to do is sit at home and watch TV!

Your Retirement Target Figure

The figure you end up with is your RTF (Retirement Target Figure). It really depends on your lifestyle, but as a rough guide you are probably looking at between $3000 and $6000 per month (£2000 to £4000), after accommodation costs.

Add another 50% to the above figures for a partner or spouse and probably the same again for any dependent children if necessary. (When do they become non-dependent we hear you cry!).

Once you have your RTF you can then set about trying to match, or better it! Easier said than done, we know.

First work out any pension income due, remember that most pensions won't pay you anything before age 50+ and your income will be seriously reduced the earlier you take it.

Always, always get professional advice. Look at income from stocks and shares, and from savings, it might be that your savings can supplement your income while you wait a few years for your pension to mature.

Don't include any income from the interest on savings set aside for a special purpose (e.g a son or daughter's wedding or that once in a lifetime cruise) because once that money is spent you won't have the income from it!

Your Retirement Income Level

Add all the bits of income together and this will give you a RIL (Retirement Income Level).

If at this stage your RTF and RIL are very similar, then congratulations, you are almost in a class of your own!. A recent survey showed that the vast majority of Americans had put nothing aside specifically for their retirement!.

So, if you are reading this, and are part of that MAJORITY with your RTF and RIL about as close as the North and South Poles, then it may be worth thinking about the following.

So far your RTF (Retirement Target Figure) and RIL (Retirement Income Level) have been calculated on you living in your current home, whereas with retirement comes a change of pace and maybe a change of location?

Want to retire overseas?

Perhaps you want to move overseas to enjoy your early retirement, then have a read of how to Retire to Chiang Mai, Thailand, it will give you real facts about the likely costs of moving, particularly to an Asian country. Fancy the other side of the world? How about Mexico?

If your current property is mortgage free (which many are by retirement age) it may be worth considering downsizing, to free up some capital to earn extra income from and lower your property costs. If selling frightens you at this stage then letting out your current property and renting somewhere else is another option.

This can be a great way to retire early, to see and live in a lot of places in your early retirement years. You may have close family members aboard or maybe you fancy a villa on that Caribbean island for six months. You may even find somewhere which has a much cheaper cost of living, reducing your RTF even further.

Supplementing your income

The next stage is to find ways of supplementing your RIL. Getting a little extra income could make all the difference in finding ways to retire early or not. Here are a few of our suggestions to help you make your dreams become a reality...

If you are going to retire, you don't want to have to work full-time to fund it, otherwise you may as well stay in the career job. However, spending 10-15 hours a week doing something you enjoy, will keep you active, give you a social life and help you meet new people. Even better you should make around a $1000/£600 a month which might help to pay for little luxuries, an extra holiday, or a new car every other year.

Sell your time and knowledge

Maybe you have a skill that could be turned into a way to make money at home. We cover a number of possibilities in our Sell your Skills section of this site.

Or maybe you enjoy doing things that other dislike or cannot find time for? In this case don't miss the Selling your Time pages which offer many ideas to consider.

Another simple idea is to turn a hobby into an income, by writing about it and creating a website. There are many opportunities and ways to earn money on the Internet.

A good established site can easily make between $1000 - $2000 per month, for less hours than a part-time job.

Set targets and deadlines

For your ways to retire early to be a success, you need to put your plans into action! Once you have RTF and an idea of how much you can expect to get income wise (your RIL), then make a plan.

Give it timelines and targets!

Retiring early is a big step, and the more planning and research you do beforehand, the easier it will be. Finally, don't be afraid to change your plans, if necessary.

After all, life is one long journey with lots of roads, you will not pick the right one every time. You may want to assess what you really what from life, which could be something as simple as a place by the ocean or something a little more challenging, like breeding rare breed cattle!

Ok, the plan is in place, the retirement date is agreed, your leaving party has been organised, all that is left is to give a retirement speech and let others know the ways to retire early!