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  • Writer's pictureFinancial Fortress

5 Tips to Retire Early

Updated: May 9, 2022

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Even if you love your job, most people would like to have the flexibility of not having to show up to work daily and even have the option to retire early. However, with the increasing costs of living and the inflation rates, early retirement may just seem like a pipe dream. Don’t despair though, it’s not as unattainable as you might think.

The FIRE movement, also known as “Financially Independent, Retire Early”, is known for helping people retire as early as their 30s to 50s.

Retirement planning is a multistep process that evolves over time. For one to have a comfortable, secure, and fun retirement, a financial cushion needs to be built to fund it all.

Below, we’ll list the top 5 tips to retire early.


1. Understand your time horizon

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This is the amount of time you have between your current age with your targeted retirement age. The longer the time you have, the higher the level of risk your portfolio can withstand. For example, if you still have 30 years until retirement, you can opt to put the majority of your assets in riskier investments.

You’ll also need returns that are able to outperform the inflation rate to be able to maintain your purchasing power during retirement. The older you are, the more your focus should be on the preservation of capital and lower-risk investments. Check from time to time and look to rebalance your portfolio as your time horizon changes.

2. Determine your retirement spending needs

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Have realistic expectations about your post-retirement spending. This will help you decide the size of your retirement nest egg. This is because many people unrealistically account for their retirement spending to be only 70-80% of their current spending patterns.

This may not be feasible if you still have debts such as mortgages or unforeseen medical expenses. Look at targeting for a 100% spending ratio instead. If you’re looking to still fund your child’s education post-retirement or purchasing a new retirement home, you also have to factor these into the overall retirement plan.

3. Pay off and avoid debt

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This one may seem obvious but it’s an important one to highlight. Each long-term loan that you take on will have an impact on your assets that could have been saved for retirement purposes. It also increases your costs by having to pay interest -- a completely unnecessary and avoidable expense.

4. Minimise your expenses

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Ask yourself what’s more important to you. As with many things in life, it’s necessary to make some sacrifices and compromise to be able to reach the goal of retiring early.

For example, if you enjoy travelling, instead of travelling multiple times in a year, why not reduce this to once a year. You may also want to cut your takeaway coffee or take your own lunch to work. Examine your current phone plan, too, and see if you’re able to maximise using it. If not, opt for a cheaper phone/data plan.

If you’re into shopping, try going through your wardrobe first. Doing this will allow you to see clothes you might still like (or ones that you haven’t even worn yet) which can prevent you from buying unnecessary items. Take a look at your grocery expenses as well. For this, you can start comparing prices and opt for more affordable/unbranded options.

5. Get advice and start early

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It’s universally recognised that seeking professional independent financial advice will help you achieve your goal not only quicker but with less pain of making financial mistakes along the way. The earlier you start retirement planning, the easier and more effective it will be.

Discover your path to retirement planning today

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Retiring early involves thinking ahead and being habitually smart and constantly aware of the way you handle your expenses. While discipline and sacrifices are necessary to retire early, don’t forget to enjoy the present too. It’s okay to treat and reward yourself once in a while!

We understand that to financially plan for your retirement can be quite difficult and overwhelming. Professional advice can help you overcome this and help you achieve your financial goals. If you’re wondering how to save for retirement with the help of professionals, we can connect you to people in the financial industry.


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