"I wish I had worked more and spent less time with my family," said no one ever. Time with family is precious and irreplaceable. If you want to spend more quality time with your loved ones, early retirement might be right for you. Here are five steps to help you achieve early retirement.

Step 1: Eliminate Debt

The first step to early retirement is eliminating all forms of debt. With recent changes to tax laws, even your home mortgage should be on the chopping block. The standard deduction now exceeds the amount most people pay in mortgage interest, making the conventional wisdom of holding onto a mortgage for tax benefits obsolete.

To reach your goal, you need to pay off all your debts, including your mortgage. The fewer financial obligations you have, the more flexibility you gain to retire early.

Step 2: Downsize Your Lifestyle

Do you indulge in frequent vacations or own multiple new cars? Is your home a sprawling "McMansion"? If so, early retirement may not be in your future. Downsizing your lifestyle is essential.

Here’s how:

• Opt for used cars instead of new ones.
• Move to a smaller, more affordable home.
• Limit vacations to one simple, budget-conscious trip per year.

Remember, simplicity is key. By reducing your expenses, you’ll be able to save more aggressively and build that huge nest egg needed to retire early.

EGGSTACK RETIREMENT PLANNER

Step 3: Encourage Financial Independence in Your Children

To achieve early retirement, you need to ensure your adult children are financially independent. Supporting grown children long-term can drain your finances and delay or even eliminate your retirement goals.

• If your adult child is still in college by age 25, encourage them to take responsibility for their own education costs.
• For those who lack ambition or financial independence, have a candid conversation about their plans and establish a timeline for them to move toward self-sufficiency.

By guiding your children toward independence, you free up your resources and encourage your children to grow into responsible adults.

Step 4: Boost Your Income with a Side Hustle

Earning extra income can accelerate your path to early retirement. My father retired at 55 by starting a concrete business with a friend in addition to his fulltime job. He invested all the extra income and discovered a love for playing the stock market.

Consider:

• Starting a small business or freelance gig.
• Having your partner or spouse contribute to household income if they are not already employed.

The strategy is simple: Everyone works as much as possible to maximize income, savings, and investments during the years leading up to early retirement.

Step 5: Avoid Get-Rich-Quick Schemes

Social media is rife with get-rich-quick schemes. Many of these schemes involve influencers flaunting lavish lifestyles while selling courses that promise similar wealth. Don’t fall for it.

Did you know:

• You can rent a Lamborghini for about $1,000 a day.
• Companies rent private jets for photo shoots.

These displays are often staged to lure you into the scam. The real wealth builders? Hard work, disciplined saving, and sound investments. Stick to what works: consistent income and prudent financial management.

Conclusion

Early retirement isn’t for everyone. If you try it and it doesn’t suit you, there’s no harm in reverting to a traditional retirement plan. It’s not like jumping off a cliff, there is an “undo" button. Life is a journey and we all make course corrections along the way.

Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.