Early Retirement Planning
What You Can Do Differently

Have you ever thought about early retirement planning as being more than just a dream

A recent survey revealed that the majority of people in their peak earning years want to be able to retire early and most of them have plans in place to do just that.

When asked what they were specifically doing to achieve an early retirement, they listed three primary steps they were taking.

  • 80% said that were cutting back on current expenses.
  • 75% plan to increase their savings rate substantially.
  • 50% said that they are scaling back their retirement lifestyle requirements, meaning they would live more frugally than they originally planned.

While these are certainly among the key steps anyone with early retirement aspirations should take, they don’t seem much different than the standard measures that most people are taking just to make it through this distressed economy.

In other words, most people today, regardless of their retirement timeline, are forced to cut back, save more, and rethink their retirement goal, so that they can retire at any point.

So, what kind of edge do the early retirement planners really have over everyone else?

Not much if this is their only plan. If this is what everybody else does when it comes to early retirement planning, what should you do differently?

What Everyone Ought To Know About
Early Retirement Planning

Phase in Your Early Retirement

Most people furiously scrimp and save, month to month and year to year, and hope that they wind up where they want.

When they approach their early retirement target date and find that they don’t have enough to retire, they simply move the goal line.

By taking a more measured approach, one that involves several stages of early retirement or de-employment, you can progress along a series of benchmarks that:

(a) give you a clear indication of your progress, and

(b) provide you with deliberate transitional steps that enable you to make real life adjustments as you move closer to decoupling from full-time employment.

In addition to the standard and essential steps of cutting back, saving more and redefining your retirement lifestyle, you can pave the way for your early retirement with distinct transitional stages over a period of five to eight years up until your early retirement date.

1. Start a part-time business. Most people harbor aspirations of running their own business in retirement, why not start yours now?

It can also help you bridge your income as you phase out of employment. Best way for most people is to find a way to monetize a hobby.

2. Convert your equity into income. Trade your big home for a smaller retirement home.

Take the equity and invest it in a combination of income producing securities and growth stock.

3. Reduce your employment hours. If your employment situation is such that you can stay on with a reduced schedule or on a contract basis, do so.

This is obviously more easily done if both spouses are working. Work on expanding your business with your extra time.

4. Go completely part-time. This could be an optional stage if needed and is useful if there is an opportunity to expand your business further.

5. Retire. You’ve made all of the necessary lifestyle adjustments.

You created an income stream that can bridge you to your pension. And your retirement assets are all in place.


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