Most workers in the United States look forward to when they would be out of work and retired for good, going on holiday trips, spending time with family, and doing things they never had the time to do when they were working full time. But the real challenge, which turns out to be a scary question to a lot of workers is, “Do you have the financial capability and right structural plan to stay afloat for so many years after early retirement?”.
Your lifetime savings from work may turn out not to be enough, there may be a high rate of inflation, etc. These are factors to consider when planning for early retirement, and therefore, below are some key tips to ensure you stay properly financially covered once you retire:
Ensure you make adequate plans 10 years before you retire: As your retirement date draws closer, there’s always a possible scenario where the money you deemed enough wouldn’t seem like it anymore due to factors such as increased cost of living, receiving lower than projected expectations from investments, etc. Therefore, it is very important you start making all the necessary plans to ensure your financial security during retirement, about 10 years before actually retiring. This might require you seeing insurance experts and seeking advice from professional and experienced heads.
Cut down on your fixed expenses: When you are out of your job and without a regular income anymore, you need to keep hold of every single penny that you can, so reducing your spending rates on inevitable expenses such as food, transportation, housing etc., is paramount. Some people even go the extra mile of vacating their homes to move to places, towns or houses with significantly lower housing cost. This can help in saving a lot of money which could come in very handy.
Get the best out of your Social Security and Pension Packages: Maximizing the financial benefits you could get off insurance policies put in place, social security packages from the government, and pension coverage from your company amongst others, could go a really long way in determining how stable you end up being during your retirement years.
Secure a side hustle or another source of steady income: There are a couple of ways to go about this, as you can decide to start a private mini-business for yourself to ensure a stable source of income, or you can even pick up a part-time gig which should not be too demanding, just to reduce the financial burden on you. You should also look for some other projects which could be money-yielding, preferably within your line of profession. Keeping in touch with your former colleagues and just following changes in your industry could be tools in keeping you financially afloat, one way or the other.
Invest your assets safely to get assured returns: Early retirement means you might need to go from high-risk investments to other safe investments with an assured return rate. Alternatively, early retirement could also mean aggressive investing of your assets to get quick and fast returns. But ultimately, you would still need to invest, and this has to be done smartly as it could play a key role in guaranteeing financial freedom for you during retirement.
Make healthier choices: Chronic ailments such as diabetes, arthritis, high blood pressure, and so on are very expensive to deal with, while also being relatively easy to avoid, therefore regular health checkups and good healthy diets to help prevent these from occurring is advisable. Your retirement stage is the worst time to be hit with the financial burden of treating an ailment, and it would be wiser to spend money on healthier choices such as visiting the gym, keeping fit, eating healthy and making efforts to stay healthy in general.
Get Homeowners or Auto insurance to stay covered: It is very important to have some solid insurance policies in your name, as these keep you safe and ‘insured’ from unforeseen disasters. Homeowners insurance insures against loss of property and possesions and also provides liability coverage. At the lowest possible rate, this is definitely a must-have for every one who plans on retiring early.