How to Enhance Your Savings Strategy for Early Retirement

November 3, 2018
Posted in Insights
November 3, 2018 DCT Capital Fund

Many people have dreams to swing a home run on their 9 to 5 jobs right out of the stadium and live a life full of relaxation, travel and spending time with family and friends. According to data collected by the LIMRA Secure Retirement Institute, there is an immense number of working Americans that are retiring early. Being able to retire early does sound great, but there is a special strategy to do it. Here are some helpful tips to enhance your retirement plan, so you can live the dream life as soon as possible.

Work Hard and Practice Discipline

This is a reliable tip in order to make your goals happen. Your best bet is to take a job with a higher pay than average and save as much as you can. Or, you can have multiple ways to receive income such as owning a rental property, starting a business or freelancing in a particular hobby that you are good at. You may also have to cut out some leisure activities and extra expenses that you don’t need. If you are seeking financial freedom in order to achieve your goals, consider real estate investing. Working hard and having the discipline for yourself will help you reach this long-term goal.

Treat Yourself to Healthy Living

Maybe this won’t be the most satisfying treat now, but you won’t regret it in the future. The lifestyle you live now affects your financial needs once you reach retirement. In 2016, the U.S. Bureau of Labor Statistics reported that an elderly person’s spending habits do not change until the age of 75. At this point, expenditures drop significantly in entertainment, clothing and transportation while spending on health increases. The healthier your lifestyle is now, the fewer health expenses you will have to worry about in the future.

Start Today and Make It Heavy

Retiring early means saving early. This is easier to say than do, but it is very essential. When you invest earlier, the compound interest is going to benefit you later. Compound interest happens when your assets produce an income, which is then reinvested to produce their own earnings.

Try to maximize your savings percentage and have a long-term game plan.

Plan Accordingly

Ask yourself why you believe retirement is important and what are you going to need to live happily and pleasantly. Make a list of specific future goals, so that you can generate a plan that is smart and effective. Sometimes there are changes in your job or in the economy, so don’t forget to anticipate these unexpected circumstances.

Utilize Tax-centered Investments

For retirement, there are three types of investments, which include the following: tax-deferred, tax-free, and taxable. A tax-deferred investment is in effect at the age of 59 1/2 while a tax-free investment has more flexibility before this age. A taxable investment, like real estate investment, has the ability to create income without restrictions in distribution. These types of investments will enable you to be more flexible.

 

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