How to retire earlier and richer?


Change is the only constant and it has remained so for many decades now. One thing, however, seems to defy this saying to a great extent. It is the mindset of the current generation towards their profession. Gone are those olden days when people stuck to their job for 3 to 4 decades continuously. The trend that prevailed during those days was to retire from the job they drew their first salary from.


The job scenario today is totally different. The current generation neither likes to stick on to a single job for years nor wants to put in long years of service before retiring. In fact, they want to retire earlier than the stipulated 58 years and enjoy life to the fullest. Their educated prudence makes them understand that retiring early with fullest financial freedom is a tough combination. This gives raise to the question – How to retire earlier and richer. Let us look at some real time strategies to retire earlier and richer.


Life expectancy

When you start on a journey, the first thing you decide is about the destination you want to reach. In the same way, the process of retiring earlier and richer starts with calculating your life expectancy. Any sort of Financial Planning towards your early retirement can be done only when you know how long you are going to live.


Calculating your life expectancy is possible through assessing the health history of your family. You can calculate the life expectancy based on your current health condition also.


Risks attached to retirement

You now know your probable life expectancy. The next logical step is to assess the different kinds of risks you may have to face post retirement. Two issues that can make your life unmanageable are Inflation and Medical expenses.


Take Inflation and Medical Expenses into consideration while calculating the amount you may require post retirement. Any financial planning done without taking these two factors into consideration may land you in chaos post retirement.


Get in touch with a capable Financial Advisor who will guide you completely throughout your Financial Planning for retirement.


Assess the rate of inflation in the past and observe the current inflation trend. A thorough analysis of these two will give you a fair idea about the probable inflation rate at the time of your retirement. Seek the help of a competent Financial Planner who will help you ascertain the same in the perfect manner.


Saving for Medical expenses must be done in an exclusive manner right from an early stage in life. Bifurcate a reasonable amount every month and invest in Systematic Investment Plans and other type of Mutual Fund products. This will help you build good amount of money which will take care of your Medical Expenses post retirement.


Break up your retirement plan

When you want to retire early as well as in a rich manner, you have two goals in hand. One is retiring with enough money in hand at the normal age of 58 to 60 defined for retirement. The other goal is to retire earlier with enough financial freedom.


Now that you know that you have two goals towards your retirement, invest separately so you can meet both the goals at the right timing.


For instance, set up an investment plan separately for accumulating the target amount by the usual retirement age of 58. Ensure you have arrived at the target amount taking into consideration the inflation and medical expenses into account.


Invest in Mutual Funds and Systematic Investment Plans which help accumulate huge wealth in a disciplined manner. This will help you to meet your goals to retire early as well as rich.


Don’t fall a prey to enticing schemes

Never ever go in for financial products that are said to be yielding high profits on your investments within unbelievably short periods of time. Many such scams are happening around. When you fall a prey to such schemes, you may lose your hard earned money before you understand what happened.


Consult your Financial Advisor to understand about Mutual Fund products that are safe to invest in. This will help you to retire with peace of mind and confidence.


Avoid generalization

Many among us avoid investing in stocks for the fear of losing our money. Investing in stocks is generally considered as an unwise risky activity since we are born and brought up in a conservative society.


Talk with your Financial Advisor. He will be able to provide guidance to you about Diversified Equity Mutual Fund Schemes that tend to be long term in nature. As the very name suggests, the diversification of your funds in different products spreads your risk levels across. The averaging out of risks safeguards your interest in a huge manner.


Target products offering better returns and Tax deferment

Before making any investment, look at the choice available and invest in financial products that offer you the best returns on a comparative scale. Your Financial Advisor is the best person to enlighten you about the choice of financial products. He will also identify the suitable venue for your investment based on your plans about future.


From a performance angle and the continuing trend, Mutual Funds and Systematic Investment Plans yield the maximum returns.


Understand from your Financial Planner how tax deferred products exactly work. Include these products in your Financial Planning and avail the maximum benefit out of the same.


Look out for extra income

Retirement is just another stage of life. Retirement does not mean you have to be inactive all the time. Understand your strengths and leverage the same for earning during retirement.


Cut down your spending

Money saved is money earned. Cutting down on unnecessary expenses will help you save enough for early retirement.


Retirement is not a sudden condition. You know you will retire at some point of time on the first day of your employment. Initiate saving for your retirement right from the beginning of your career which will help you retire earlier and richer. Happy retiring.


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