Achieving early retirement often requires sacrifices throughout your life. In your working years, you’ll need to avoid the temptation of keeping up with the Joneses to ensure more of your money is saved for retirement than squandered on shopping sprees. And to avoid running out of money after you retire, visions of champagne and caviar on the beach of St. Tropez may need to be experienced from the comfort of your living room through a virtual reality headset and the metaverse we’re promised is just a few years away.
First, you need to define what “early” is for you. Is it age 55 or 65? Then you need to consider what retirement will cost for you. For example, will you really spend less in retirement as many financial advisors would lead you to believe? Will you have income from Social Security or a pension? And what savings and investments have you accumulated to supplement your retirement lifestyle?
Redefine your idea of retirement, and get clear on what you are retiring to, not what you are retiring from. Be as specific as possible, for example, “I want to travel to XYZ country to do…”
An important part of picking a date for early retirement is to know if you have enough money saved. Unfortunately, there is no guaranteed way of knowing exactly how much money you need.