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  • Saturday, September, 2020| Today's Market | Current Time: 10:53:45
  • Gone are the days when people worked themselves up to 60 years of age. Today, many of you might have a lot of aspirations, which you might wish to achieve at an early period in your life. Therefore, you might choose to retire early from your 9-5 jobs and venture into something new. However, retirement should not be an impulsive decision; it should be well-planned in advance to ensure your maximum safety in the future.

    A well-thought plan can allow you to live a successful retirement period as well as meet your financial goals with ease. However, if you plan on retiring early at the age of 40-50, you should ensure you start your retirement planning from now. Therefore, let’s take a look below to understand how to retire early:

    1. Prepare a post-retirement plan

    Retirement planning can be a long process. Therefore, before you even begin planning your finances for retirement, you should draft a post-retirement plan. When you have a post-retirement plan in your hand, you would be able to find out what you can do after your retirement. Since you might have a lot of free during retirement, you should look for a way to utilize the 24 hours of your day productively.

    During your active working years, you might be exhausted from working consistently. However, you should not retire simply because you are stressed-out from your current job. If you plan on retiring, consider your post-retirement goals and start saving up for it accordingly. Many of you might want to explore new cities, or you might want to start a new business venture.

    1. Calculate your retirement corpus

    When you decide to retire early, you should have adequate funds in your hand to manage your expenses after retirement. For instance, if you retire at 40 years, you might have an additional 40-50 years to live your life after retirement. Therefore, evaluate the expenses that you might spend during that period.

    Typically, your retirement corpus can exceed Rs. 5 crore based on your monthly spending, and rising inflation. When you calculate your retirement corpus, you might be overwhelmed with the amount you need to generate for your retirement initially. However, if you break the amount down as your routine expenses on a monthly basis, you can find it easy to bear the expenses.

    1. Balance your retirement portfolio

    A successful retirement planning can be a combination of savings and investments. Although you might have saved a lot of money for your retirement, you might end up using it before that in the case of any medical emergency or any other financial crisis like the loss of your income. Therefore, you should put your money into a high-return investment product that allows the growth of your money.

    Since retirement might be a long-term goal, you should invest a major sum of your money into equity assets. When you invest in equity, you should not panic about the market volatility. As an investor, you should know to balance your assets based on market performance. When the market is down, you can opt for debt assets, and when the market is high, you can choose equity investments. That way, you can secure your invested capital as well as receive high returns on your investments.

    To sum up, retirement planning can allow you to gain financial independence when you have zero sources of professional income. When you invest in a pension plan, you can not only retire peacefully but also meet your financial requirements in the future. Retiring before 60 can turn into an excellent option if you have adequate funds to protect your future.