How to retire when you're young enough to enjoy it

Lindsey Grant — Most of us have plans for the lives we'll lead once we retire. Would you rather travel the world when you're 65 or 45? If you're honest with yourself, you probably answered "45". There are very few people that wouldn't want to have 40 years to enjoy retirement instead of 20, if they figure on living for about 85 years. If you want to retire while you're still young enough to enjoy it, here's what you should be doing:

1. Get a second job

Wait a second! Isn't the point of this whole retiring early thing to enjoy yourself? Why would you want to get a second job if your first is covering the bills? Because that second job will give you a paycheck that you can invest. You don't have to go out and get another job that keeps you away from home for 40 more hours a week. What you can do, however, is look for something that you can do from home. Work as a freelancer, offer your services, or sell your goods. Do what it takes to generate extra income.

2. Find a financial advisor

Unless you went to school for finance or your favorite great uncle is a stockbroker, you'll need to meet with a financial adviser if you plan on making wise investments. Forget investing online if you don't know what you're doing. The goal is to make money, not lose it. A professional financial advisor can help you make sound investments that will make passive money. That means that your money will make money while you do absolutely nothing.

3. De-Clutter

If you're serious about investing, go through your basement, your attic, and all of your junk drawers, and start selling what you don't use. Set up an eBay account and purge your home of all the things that you don't need. How will this get you ready to retire? Because selling your stuff will give you a lump sum of money that you can use to start building your savings. The more money that you have and the earlier that you start saving, the more interest you'll earn.

4. Pay off debt (and don’t accrue more)

If you spent recent years living off of your credit cards, it's time to pay down your debt and cut up your plastic. Start a cash-only life. There's no sense in paying off your credit cards if you're only going to run up your balance again. If you don't have the cash to purchase something, you don't get it; it's plain and simple. Save one credit card for an emergency and dump the rest.

5.  What do you need?

When you start investing and saving, it's wise to sit down with a calculator and figure out how much you really need. Can you live comfortably on $25,000 a year? If so, you'll need about $250,000 worth of investments in ten years; $500,000 in twenty years. You can use this number to decide how much you should be saving each month. Don't forget to figure in interest that you'll earn on your investments or from your savings account. If you need help with these calculations, this is where a financial advisor will come in handy.

You don't have to wait until you're ready to move into the nursing home to retire. If you start investing wisely now, you can easily retire while you're still young enough to have a healthy, active lifestyle. Follow the tips above and you'll be retiring before any of your co-workers.



About the Author

Lindsey Grant is a financial advisor and blogger. Retirement should be a stress-free time of your life.