Planning Early Retirement? Steps to Plan Your Finances

Gone are the days when people waited until the age of 60 years to retire from their professional lives. People no longer want to spend their years in an office and are opting for early retirement in their 40s and 50s. The current generation prefers working smart over working hard and are able to live their life to the fullest due to smarter financial planning. Disciplined savings and investments in retirement pension plans have helped many people retire early and live their days without financial worries.

If you too are interested in retiring early, here is how you can plan your finances:

1. Start saving from the first paycheck: The sooner you start saving, the sooner you can retire. A lot of people waste their 20s spending money on inconsequential purchases. However, if you follow a disciplined approach and start saving in retirement pension plans from your first paycheck, you will be able to amass a significant pool of money sooner to help you out in the future. The power of compounding will help you multiply your money’s worth, and you will be able to get returns that beat inflation. So, look for the best retirement plans and save as much as you can.

2. Increase your sources of income: Since you have a shorter timeframe to save for your non-working years, try to seize every opportunity to earn more money. You can work part-time along with your primary job to earn extra. You can also consider freelancing every now and then if you have a flexible work schedule and can take out time for some additional work. A lot of people work as consultants, assistants, tutors, etc., to make some extra cash. The internet is also full of money-making opportunities like making websites, vlogs, etc. You can pick a niche as per your area of interest.

3. Keep your expenses in check: Unnecessary expenditure can put you behind your goal of early retirement. Not only do you lose money in the present, but you also lose the possibility of doubling this money in the future by not investing it. While it can be hard to ignore essential expenses like rent, fuel, electricity, etc., you can cut back on discretionary expenses like travel, shopping, dining out, etc. Try to curb your spending as much as possible and use the savings to invest in the future.

4. Plan for future contingencies with insurance: Life can throw a curveball at you when you least expect it. Hence, it is very important to stay prepared for any unexpected situation that can disrupt your goals. Insurance plans can offer you security at affordable premiums. Investing in a life insurance policy can ensure that your loved ones are always protected. Similarly, a health insurance plan can cover your expenses in case of an illness.

5. Do not be afraid to take on some risk: With a shorter time horizon, you must keep a blend of high risk and low-risk investments on your investment portfolio to earn remarkable returns. Unit-Linked Insurance Plans can be one of the best retirement plans for early retirement as they offer high, moderate, and low-risk options that can offer you high returns. You can start by investing in equity funds and then slowly move to debt funds as you move closer to your preferred age for early retirement.

To sum it up

Retiring early can seem a little tricky and overwhelming at first, but it is not impossible. In fact, a lot of people are opting for it today as compared to the previous generations. All you need is prior planning, and you can retire at an early age and enjoy a long and comfortable retirement. However, in order to do so, you need to start saving in a high yielding retirement pension plan from a young age. PNB MetLife offers some of the best retirement plans for early retirement. So, go ahead and start saving now!

Know more about term plan and term insurance at PNB MetLife.

Doesn’t the thought of retirement sound blissful? No work, no deadlines, and all your hours spent doing the things you love, like travel, painting, and even napping in the afternoon! If you want your retirement to be what you have always dreamed of, start retirement planning now and save a considerable retirement corpus in time. The online Retirement Calculator can help you plan your future financial goals and ensure you achieve them within the stipulated time.